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2016 Corporate Crisis Outlook: Much More of the Same

2015 at a glance: Explosive airbags and scandalous accounting. High-visibility data breaches. Terrorism. Climate risk. Drug pricing. Food quality. A 300 percent increase in media attention on brand reputation risk since 2010. Scrutiny is indeed rising.
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2015 at a glance: Explosive airbags and scandalous accounting. High-visibility data breaches. Terrorism. Climate risk. Drug pricing. Food quality. A 300 percent increase in media attention on brand reputation risk since 2010. Scrutiny is indeed rising.

As for 2016, expect more of the same -- as well as growing alarms about other emerging crisis fields, including what I call the erupting demonization of dissent.

As a whole, the crises experienced in 2015 demonstrate that much work remains in developing solid crisis-preparation and communications plans and in managing such calamities. The scandals at Takata over air bags and Toshiba over accounting underscore that vividly.

And in the New Year, the crises that will persist or develop will, undoubtedly, further illuminate the need for private-sector, academic and government leaders to better prepare for and handle crises before they emerge. Regrettably, if the past is any indication, not enough will happen on that front.

Here's my crystal ball-gazing expectations for 2016:

No. 1: More corporate scandals will dramatize further abysmal crisis leadership.

Who knows where they will crop up, but expect them. For some reason, and it involves senior leadership, many companies resist simply telling the truth quickly when a crisis erupts and explaining what they're doing about it. Often, it reflects lousy legal advice as well as batten-down-the-hatches CEOs who simply don't grasp the consequences of managing a crisis poorly.

No. 2: Cybercrime will worsen as criminals get more sophisticated.

Cyber Crime and data breaches coverage is dominated by cybercrime - occupying 63 percent share of voice among reputational risk issues even though attacks decreased thirty-six percent from 2013 to 2014.

And despite the use of security-encrypted credit cards, the number of data breaches and the cost of those disruptions (averaging $3.79 million in the 2015 IBM/Ponemon Institute survey) are likely to continue to increase. More worrisome, anticipate more ransom demands from cyber crooks who threaten to release highly sensitive information if companies don't pay up. This explosive use of ransomware in a computer system is the "privatization" of the Snowden effect -- as copycats to the government "whistleblower" Edward Snowden target the private sector -- and it will impact how organizations and their employees use email, in particular.

As cyber criminals become even more sophisticated, security experts warn of increased attacks against Web frameworks, such as WordPress, and Web-performance and analytics networks, such as Optimizely, as well as against virtualization technology used more frequently at home and in small offices.

Expect more companies and organizations that spend huge amounts on computer security to not forget the trees for the forest. In other words, IT organizations will spend much more time looking for the simple entry points to their networks that may interest cyber crooks. It was the failure of JPMorgan Chase to install a simple security fix to an overlooked server in its vast network that triggered the largest intrusion of an American bank to date in mid-2014.

No. 3: The business community will grasp it must play a role in securing our physical safety.

No surprise that there has been a 275 percent increase in coverage of physical security issues since 2011, indicating greater emphasis on security and businesses protecting their employees.

The terrorist attacks in Paris, San Bernardino, Calif., and elsewhere are awakening the business community to the realization they must participate actively in helping ensure the physical safety of their employees and others. Terrorism has struck America and it has put corporate America on notice particularly in the tech sector. This is a crisis.

Consequently, companies and organizations will focus increasingly on "hometown security," joining local and state law enforcement to train employees and residents to recognize behaviors and indicators related to terrorism, crime and other threats. They will play a role in stepped-up strengthening of transportation, supply chain, biological and infrastructure security, as the federal government moves to coordinate such proactive initiatives.

Already, there are moves to require technology and security companies to help the government fight extremists online. And the issue already has entered the 2016 presidential contest as Hillary Clinton has called for a "Manhattan-like project" that would bring the government and tech communities together as partners in fighting terrorism as they did in the World War II era to develop nuclear capabilities. GOP presidential candidate Carly Fiorina also has urged tech companies to help with antiterrorism efforts.

No. 4: Culture Crimes will trigger crises on more campuses, radicalization elsewhere.

This disturbing trend, which includes the demonization of dissent, showed up increasingly in 2015 on campuses coast to coast and on the presidential campaign trail as college students sought to prevent what they consider offensive speech and at least one presidential candidate - Donald Trump - employed profane disparagement at anyone who differed with him.

And it doesn't show signs of dissipating as social media and the open-forum Internet trigger these demons that serve only to widen a gaping civility divide. Responsible voices have begun to condemn such behavior on campus, in politics and on social networks. But until many more join in - including ministers of all denominations and respected community and national leaders - this crisis won't subside soon. The result: a tear in the very essence of our democratic society.

No. 5: Trust in authority on all fronts will continue to evaporate.

In many ways, the presidential campaign is spotlighting the further nosedive in Americans' trust in their institutions - whether it's business, media, political leaders, the police or once-immune NGOs. The sudden and surprise rise of Donald Trump as the GOP frontrunner exemplifies the trend, at least among Republicans, who distrust Washington politicians. Plus, the respected Edelman Global Trust Barometer for 2015 also captured the implosion of trust among the general public, not only in U.S. institutions but globally.

Geopolitical, economic and social issues in the U.S. and elsewhere explain much of this distrust. And 2016 conditions don't suggest any improvement in trust levels will occur soon. It will take a national dialogue of some sort and concerted efforts by those few institutions and leaders that are trusted before this crisis of authority subsides. And don't count on the presidential election, whoever wins, to help much.

While this is a bleak outlook, collective resolve should never be underestimated.

Our doubts are traitors, and make us lose the good we oft might win, by fearing to attempt.