crisis preparedness web
TRANSCRIPT
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Who Is that Vietnamese guy?
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Nguyen Thanh Son, GD of T&A Ogilvy and
Ogilvy PR•
Part of Ogilvy Group including Ogilvy & Mather,
Ogilvy One and Ogilvy Action
• Used to work at Vietnamese News Agency,Vietnam Chamber of Commerce and Industry
and Oklahoma Department of Commerce
• Started T&A Communications in 1995, now
has 67 communications consultants workingfor 30 international and leading Vietnamesebrands
• Client portfolio including Amway, APC, Boeing,Canon, Cartier, GE, Kimberly Clark, Masan
Group, Nestle, Standard Chartered Bank,TanHiep Phat, TD Group, Temasek Holdings, Visa..
•
Lecturer at Hanoi National University andguest lecturer at Kyoto University, SophiaUniversity and Yonsei University
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Media
Your boss
NGOs
Trade
Victims & theirfamilies
Government
Opinion
leaders
Staff
Consumers
Sales force
Crisis = Pressure
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You cannot always control what might happento you, but you can control how you deal with
it…. and, in the end, that’s what matters”
Kurt P. Stocker
Northwe
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Where does a Crisis Begin?
INTERNAL
• Environmental Issue/Accident
• Investigation/Lawsuit/Fine/Settlement
• Poor Financials/Stock Performance
• Structure/Ownership Issue (M&A, etc.)
• Management Change/Dismissal
• Incident/Allegation of Mismanagement
• Incident/Allegation of Wrongdoing
• Consumer Complaint/Issue
• Product Defect/Recall
•
Employee Complaint/Issue
• Labor Dispute
• Workplace Injury/Fatality
EXTERNAL
• Natural Catastrophe
• Terrorist/Criminal Threat/Incident
• Activist Issue/Protest
Of the 15 major crisiscategories, only 3 havepredominantly externaltriggers.
More than 75% of allcorporate crises aretriggered from within.
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How does a Crisis Begin?
“On average, 69-percentof all crises are the typethat start out small andmay take days, weeks oreven months before theyget out of control anddraw public attention...”
--Institute for Crisis Management
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Sanlu milk scandal first broke out in September 2008, it over-turned
China’s dairy industry.
Milk powder products produced by many leading manufacturers were
found to contain different levels of melamine.
According to reported figures, about 54,000 infants and toddlers suffered
from kidney stones, with six confirmed death.
The Melamine Crisis: Sanlu Milk Scandal
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Early March The first suspected case appeared in Nanjing.
Mid-March Sanlu received consumer complaints, but the company claimed
their products have no quality problems.
June The official website of AQSIQ put out consumer complaints
about toxic milk powder issue, but these were later deleted.
June to Sept. More cases appeared nationwide. Sanlu products were tested
by a local regulatory agency. In August, Sanlu began unofficially
recalling their products.
Sanlu Milk Scandal
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Sept 11 The Sanlu milk powder incident was exposed by Xinhua net, but
the company responded that their products had no quality problems.
T h a t n i g h t , t h e M i n i s t r y o f H e a l t h a n n o u n c
Sanlu milk powder was contaminated with melamine which could cause kidney
stones. Sanlu issued a statement, officially recalling its products.
Sept 12 The Dairy Association of China said that melamine may come from
t h e p a c k a g i n g m a t e r i a l . A l s o , i n f a n t s w h o d i d
drink enough water could also suffer from kidney stones.
T h e I n s p e c t i o n t e a m h e a d e d b y t h e M i n i s t r y
Health started an investigation into baby milk powder.
T h e l o c a l g o v e r n m e n t o f S h i J i a Z h u a n g a d m i t t
that they knew about the toxic milk powder issue in early August.
Sept 13 The State Council issued 6 decisions, activating the nationwide food
safety emergency response system.
Sanlu Milk Scandal
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Sanlu Milk Scandal
Jan, 2009 Relevant government agencies issued an united notice, confirmingcompensation and medical treatment for the victims.
Two people were sentenced to death. Former board chairwoman of Sanlu
Group was sentenced to life imprisonment and was also fined rmb24.7m.
Feb Sanlu Group was ordered bankrupt by the local court.
March Beijing-based dairy producer Sanyuan won the bid of Sanlu with the
price of rmb 616.5m.
June New food safety law went effective.
August According to media coverage, the local government of Shi Jia Zhuang
submitted a post-crisis report of the Sanlu incident to theprovincial government, but didn’t release it to general public.
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Care
! Sanlu: From the beginning through to the end, Sanlu never put consumers first, showing noconcern. They were forced to make a formal apology, which was not accepted by the general p
! Local Gov: Held the same attitude as Sanlu towards the victims.
! Central Gov: Ordered special measures, in terms of medical treatment, compensation and subsidies or dairy
farmers be taken immediately after the incident.
! Sanlu Before exposure of the incident, the company tried to hide the truth. After exposure,Sanlu did not want to take responsibility.
! Local Gov: Acted as the spokesperson for Sanlu.
! Central Gov: Immediately established an external information dissemination mechanism,
sending updates on the latest developments, uncovering the problems existing in
Sanlu, as well as the whole industry.
Comm.
! Sanlu: Tried to muscle its government relations, manipulate media, stall consumers
and thus lost control over the incident.
! Local Gov: Reached an agreement with Sanlu; failed to fullfil its management and
supervision responsibility.
! Central Gov: Relevant government bodies got involved and took immediate measures to help rebuildconfidence in the dairy industry and protect the government’s image.
Control
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The Cost of Not Planning
-15%
+7%
Share prices of
companies thatmishandle a crisisone year later
Share prices ofcompanies thathandle a crisis well
one year later
Source: The Impact of Catastrophes on Shareholder Value: A Research ReportSponsored by Sedgwick Group (The Oxford Executive Research Briefings,
Templeton College, Oxford, 1997)
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Timeless Characteristics of a Crisis
" Surprise
" Insufficient information
" Escalating flow of events
" Loss of control
" Intense scrutiny from outside
" Siege mentality
" Panic
"
Short Term Focus
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So what’s different now?
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Domino’s Pizza
Social Media Crisis Management•
Domino’s quickly responded with channelappropriate tactics and tone.
• Multi-tiered social media responsefeatured swift action, executive apology
and employee support.
– Apology on its website & employees
with Twitter accounts tweet links to it– Created its own Twitter account,
@dpzinfo, to reassure consumersthat this was an isolated incident
– Domino's U.S.A. president issuedan apology on YouTube, viewed595,000 times
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The Responsibility Scale: from Victim to Perpetrator
Natural Disasters
False Rumors
Workplace violence
Product Tampering
Equipment & Tech failure
Human error industrial accident
Human error harmful product
Organizational misdeeds
Victim
Accidents
Preventable
Source:Crisis Management & Communications by Coombs 2007
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“A crisis is unpredictable but not unexpected”
- Timothy Combs -
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The Brandshield Crisis Stages
Prevent
Contain
Grow
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The Road to Redemption
1. Prepare & try to prevent issues from escalating
2. Recognize early signs (smoldering) with activemonitoring including social media
3. Define the real problem rather than the technicalone
4. Containment: act fast; act decisively5. Continuous communication to all stakeholders
striking the right tone
6. Show the new road ahead: new rules, procedures,prevention strategy
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Crisis Management
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Preparedness
•
There are crises that cannot be avoided, such as a natural disasteror unfounded rumours on the internet. However, a crisis
communication plan can be important in several areas:
• Help identify high risk areas -- via Risk Assessment Audit & Brand
Audit
•
Guide crisis team on what to do, whom to notify, how to reachpeople, what to say -- via the compilation of a Crisis Management
Manual
• Equip crisis team with necessary skills -- via Crisis SimulationTraining and Media Training
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Recovery
•
Recovery refers to putting the business back on track. How peoplesee the crisis handled is very important in this phase and therefore
opinion tracking is useful. The ability to develop and analyse a
database during the crisis period is also useful as they are the ones
who expressed concern and so they should be addressed
separately in the recovery phase.
• Most crises obviously have a negative impact on the product and
the corporation. Therefore, it is important to revisit the brand values
and address problems from specific target group’s point of view.
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3 phases of crisis management
• Crisis Preparedness • Crisis Handling • Recovery
1. Set up a crisis management
group that can coordinate closely 2. Develop media and influencer
databases, e-mail lists andnewsgroup list
3. Develop an “offline” crisis-
oriented information website 4. Refer to this crisis handbook for
reminders 5. Prepare and practice in advance
6. Brief all employees about
communications process --notification, referral of calls, etc.
1. Release only corroborated
facts and pre-approvedinformation. Don’t speculate
2. Cooperate and assist wherever and whenever possible
3. Determine the strategy, then
the message 4. Contact all interested
audiences: customers, analysts,investors, employees, tech
community
5. Track message penetrationwith regular research
6.
Show care
1. Remember; It’s not over until it’s
over -- reiterate key messages 2. Build on influencer and customer
equity 3.
Revisit brand values
4. Monitor and evaluate both the
changing climate of opinion and ownactions
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3 Dimensions
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Rational Facts
•
A crisis is often accompanied with a lot of speculation and incorrectreports. Therefore, the ability to communicate key facts: is
important in the sense of taking control and containing the situation.
• From a public relations point of view, these rational facts form part
of the key messages and the facts will be updated as the situation
progresses.
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Emotional Value of The Brand
•
Every brand and corporation has its unique brand equities andwhen a reputation is at stake, it is vitally important for us to uphold
its values; through what we do and what we say.
• “Demonstrate care” is the absolute priority in crisis communication.
However, there is more to do when it comes to upholding brand
values. One example was when Felix Cat Food had productmanufacturing problems. The company decided to send letters from
“Felix” (an unreal cat) to its customers. This is because “Felix” has
been the company spokesperson and so it embodies the values of
the brand.
• Emotional values of the brand forms consistency in crisis
communication. While rational facts may change as the situationevolves, the brand value is a unique asset.
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Use of Technology
•
In a situation where quick response and information accessibility iscritical, the ability to apply technology in crisis communication
makes a big difference.
• The Internet (web site) plays an important role in crisis monitoring
and communications. Its simultaneous and interactive nature allows
the company to speak to its customers directly and speedily. Itavoids the risk of message deletion by the traditional media.
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Brand Audit
•
What is the desirable perception of the brand (and corporation)?
• Please use a simple expression to describe the brand.
• Who are your target audiences? (Segment them according to
psychographics)
• Who influences your target audiences most? (Be specific with
different segments)• What is the most important value that the brand needs to uphold at
all times?
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Crisis Management Flow Chart
• Since there are typically so many activities going on, it is often helpful to work
within a structured framework which illustrates each step which must behandled sequentially.
•
1. •
2. •
3. •
4. •
5. •
6.
1.
Potential sources 2.
Consumer reports
3.
Media calls
4.
Regulatory
inquiries
5. Trade calls
6. Mechanism in
place to direct
information or call to
appropriate CMTmember
1.
CMT formed2.
Who, what,
where, when, how
many involved,
details confirmed
3. Agree further
action needed
4. Identify who’s
been notified
5. Specialists tapped
1.
Collect info, todetermine
magnitude and
scope
2.
Key internal &
external audiences
identified
3. Appoint person
identified
4. Communicationscentralised
1.
Comprehensive plandeveloped
2.
roles
3.
accountabilities
4.
Maintain flexibility to
adjust
5. Match response to
scope:
6. spokesperson
7. actions 8.
tools
9.
Determine
operational cause of
problem
10. develop corrective
measures
11. identify
preventative measures
1.
Resources madeavailable
2.
Assure timely
updates
3.
Document case
4. Document
findings & actions
1.
Feedbacksolicited
2.
Identify
breakdowns in
action plan
3. Were the right
people involved?
4. Learn from
experience
5. Documentlearning
6.
Implement
improvement
measures
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Crisis Check List Sample
•
Strategy Meeting• Identify brand values affected
• Key messages
• Q&As
• Employee, customer and media materials
•
Press release
• Announcement ad
• Video release
• Map and Contact influencers
• Monitoring system in place
• Website activated
• Specialist tapped
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Crisis Check List Sample
•
Analyst briefing• Updates for employees
• Key messages
• 24 hours customer hotline
• Database strategy in place
•
Media enquiry hotline
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Recovery: Understand the Crisis Impact
on Different Target Groups
•
Use research to determine crisis impact and craft messages for recovery• Quantitative research
• Qualitative research
• -- In-depth interviews
• -- Focus groups
•
-- Filed observations• -- Telephone interviews (via Ogilvy One Connections)
• -- Face-to-face interviews
• Media audit (see sample questionnaire)
• Analyse media coverage of crisis to help craft messages
• Staff audit
• Influencers’ audit
• Analyse and categorise customer enquiries
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Recovery: Using Different Channels
•
Possible high noise level events
• Celebrity endorsement
• Press conference
• Photo opportunities
• TV/print campaign
•
Send letter (or other alternatives) to affected audiences.• Send thank you note to appropriate people who helped the crisis control
team manage crisis
• To boost staff morale: develop team spirit through creation of special jackets, hats and other items.
• Community outreach (caring)
•
Hotline
• Plant tour to demonstrate safety
• Staff family day to boost sense of belonging & care
• Influencers’ briefing
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Arguments Against Communicating
“There is no toll-free road out of a crisis.
The choice companies face is betweenpaying sooner and paying later.”
– Nigel Hollis,Chief Global Analyst, Millward Brown
Don’t admitanything—we’ll get
sued!
We don’t
know who’sto blame
yet!
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When Should the CEO Apologize?
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Communicating in a Crisis: The Apology
• when doing so is likely to serve an important purpose
•
when the offense is of serious consequence
•
when it's appropriate that the leader assumeresponsibility for the offense
• when no one else can get the job done
• when the cost of saying something is likely lower than
the cost of staying silent
The leader should apologize if:
Source: “When should a leader apologize—and when not,” Kellerman, HBR 2006
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Communicating in a Crisis: The Apology
• Acknowledges the mistake or wrongdoing
•
Accepts responsibility
•
Expresses regret
• Provides assurance that the offense won't be
repeated
• Is well timed
The perfect apology:
Source: “When should a leader apologize—and when not,” Kellerman, HBR 2006
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Case Study: JetBlue
JetBlue's crisis
Wednesday Feb 21 2007
JetBlue has gone from hero to zero in animpressively short time. The low-cost airline, admired for
delivering cheap fares and good service was grounded literally
and metaphorically by last week's weather, leaving passengers
stranded for hours.
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Case Study: JetBlue The Apology
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Think Actions, Not Just Words
Instead of “what should wesay,” the first questionshould be: “what should wedo?”
Communicating in a Crisis
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Case Study: JetBlue The Aftermath
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Review
10 Principles
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Key principle 1: Planning
" Pre-plan scenarios
" Map messages tostakeholders
" Assume worst case
planning position
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Key principle 2: Speed
" “Get it right, getit quick, get itout, and get it
over.”
"
Remember thecrucial “GoldenHour’
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Key principle 3: It’s the perceived problem
Define the REAL problem:" Is it about a technical flaw… or a
perception?
"
recognize that emotions take overand that technical or statistical
defenses may throw fuel on the fire
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Key principle 4: Centralize Information
" Centralise / control
information flow:
– Coming in
– Going out
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Key principle 5: Dedicated Team
" Isolate a crisis team from
daily business concerns:
–
Crisis team –
Communication team
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Key principle 7: Tone is Crucial
" Retain brand voice
" Playing defense is
offensive; don’t play
blame game
" Resist combative instinct
"
Consider the apology
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Don’t confine yourself to traditional PR.
Key Principle 8: Leverage All Channels
•
Have a “dark” web siteready
•
Consider a crisis blog
•
Youtube videos
• Search engine crisis
defense
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Key principle 9: Know What Media Want
" Understand the media’s
point of view
–
victims & bad guys – damage speculation
– tensions
– Searching for
cause / blame
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Key principle 10: Leverage Good Relations
If feasible
– Broaden the
issues
– Identify allies