What Wendy’s Tweets Teach Us About Risk Management

Instead of viewing Risk only as a scenario where something bad happens or nothing happens (e.g. workplace injuries, fires), we should remember that risk can have both a potential loss or a potential gain. ERM is a framework that allows you to assess how a risk impacts the entire organization, so you don’t turn into a Risk Management department who is known as The Department of “No”.

I’ll give you my hands down, FAVORITE example of great Risk Management in practice:

The Wendy’s Twitter Account

In 2017, most businesses were using Twitter for marketing and promotions.

But Wendy’s took a different direction.

Their social media team started posting snarky Tweets, roasting competitors and clapping back at anyone who dared criticize their burgers.

Now, I want you to imagine how this conversation went with their legal department (where risk management responsibilities often sit in large, global corporations). Probably something like this:

Wendy’s social media team: We wanna go ham on our competitors and customers!

Legal: What?

Wendy’s social media team: We wanna roast them! Like third degree burns!

Legal: What?

This was a HUGE risk to take, especially as a well-known organization. Would they alienate their customers? Would they damage the relationships they built with their competitors? Would this make them more relatable? Would this increase engagement with their customer base?

Remember, Risk Management involves looking at the potential for gain when taking on new risks as well as the potential for loss. Good Risk Management is more than just avoidance. Growth and innovation are impossible without some risk.

The social media team had the green light, and the account was a hit. So much so that in 2020, Wendy’s made their Twitter account private, so customers would have to follow them to see their tweets. Imagine the impact you’ve made when customers actively WANT to see your marketing! Wendy’s net income jumped from $129M in 2016 to $194M in 2017.

The lesson here is that Risk Management isn’t just about saying “No” to things that sound risky. It’s about evaluating risks for both the potential for loss and gain before making your decisions.