In the age of social media, where information spreads fast, companies need to rethink their risk management strategies by focusing more on the masses, said an American crisis management expert during a forum held by The Korea Herald on Friday.

“We are living in a revolutionary period. We always talk about hardware and software, but this is not a technology revolution. This is an information revolution,” said Richard Levick of the Washington-based crisis management firm LEVICK during The Korea Herald’s Biz Forum “Korea in crisis: How to survive in an era of trade wars and industrial risks.”

“What makes a difference is not how we receive the information. It is how we share it,” he said.

Levick works with companies and countries in dealing with high-profile crises -- from the Catholic Church and the global financial crisis to Guantanamo Bay and the World Cup. He and his firm have represented over 30 countries, particularly in relation to matters impacting the United States.

“We have always chosen the people we want to communicate. They are the journalists we have a relationship with, financial analysts and key politicians,” Levick said.

As many people now live in a hyperdemocracy, there is a need to “focus more on the masses” for communication, he said. Hyperdemocracy is a phenomenon in which the masses act directly, outside the law, imposing their aspirations and desires.

He cited well-known incidents, such as sinkhole fears related to Lotte World Tower and United Flight’s violent removal of a passenger.

Lotte had struggled before its 123-story tower was completed in Seoul in 2017, as unexplained sinkholes near the construction site ignited fears, which spread like wildfire online. In 2017, United Flight suffered a drop in its stock price when a video of the airline violently removing a passenger went viral on social media.

“All of the crises came from grassroots (in a social media era). So companies should be proactive in dealing with fast information sharing. And they should be transparent and build trust among all stakeholders,” he said.

Crisis are no longer defined by facts, such as gross domestic product or unemployment figures, he said.

“The crisis is when our shareholders, customers and citizens think we have a crisis. We have the lowest unemployment in my lifetime in America right now. Still, people are nervous. The facts don’t matter.” 

By Shin Ji-hye (shinjh@heraldcorp.com)