Who Is that Vietnamese guy?

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 working for 30 international and leading Vietnamese brands

Client portfolio including Amway, APC, Boeing, Canon, Cartier, GE, Kimberly Clark, Masan Group, Nestle, Standard Chartered Bank,Tan Hiep Phat, TD Group, Temasek Holdings, Visa..

Lecturer at Hanoi National University and guest lecturer at Kyoto University, Sophia University and Yonsei University

What is a Crisis?

A crisis is an event of a nature or magnitude that has the potential of negatively affecting the reputation of the company.

Media

Your boss

NGOs

Trade

Victims & their families

Government

Opinion leaders

Staff

Consumers

Sales force

Crisis = Pressure

You cannot always control what might happen to you, but you can control how you deal with

it. and, in the end, thats what matters

Kurt P. Stocker

Northwestern University

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 crisis categories, only 3 have predominantly external triggers.

More than 75% of all corporate crises are triggered from within.

How does a Crisis Begin?

On average, 69-percent of all crises are the type that start out small and may take days, weeks or even months before they get out of control and draw public attention...

--Institute for Crisis Management

Sanlu milk scandal first broke out in September 2008, it over-turned Chinas 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

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

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 e d 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 n t 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 o f 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 e d 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

Sept.1419suspectswereputintodetentioninHebeiprovince,allwere operatorsoflocalpasturesandmilkcollectionpoints.

TheNewZealandgovernmentclaimedthatSanlusforeignpartnerreportedthe toxicmilkpowderissuetoSanluandthelocalgovernmentinearlyAugust,requesting thatallproductsberecalled.Afterfailingtogetaresponseforamonthorso,they reportedtheissuedirectlyto thecentralgovernment.

Sept.15 Sanluapologizedtothevictimsandtheirfamilieswhile continuingtoaccusedairyfarmers.

Sept.16 ThePresidentofSanluandtheViceMayorofShiJiaZhuangwere dismissedfromtheirpositions.AQSIQannouncedthatmilkpowderproducts producedby22manufacturerswerefoundtocontaindifferentlevelsofmelamine. BrandnameslikeMengNiuandYiliwerenamedwithSanluproductshavingthe highestpercentageofmelamine.

Sanlu Milk Scandal

Sanlu Milk Scandal Jan, 2009 Relevant government agencies issued an united notice, confirming

compensation 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 the provincial government, but didnt release it to general public.

Care

Sanlu: From the beginning through to the end, Sanlu never put consumers first, showing no concern. They were forced to make a formal apology, which was not accepted by the general public.

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 rebuild

confidence in the dairy industry and protect the governments image.

Control

The Cost of Not Planning

-15%

+7% Share prices of companies that mishandle a crisis one year later

Share prices of companies that handle a crisis well one year later

Source: The Impact of Catastrophes on Shareholder Value: A Research Report Sponsored by Sedgwick Group (The Oxford Executive Research Briefings, Templeton College, Oxford, 1997)

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

So whats different now?

The Essence of a Crisis

But you WILL be blogged even if you

keep silent, or ESPECIALLY if

you keep silent

Everyone is a Journalist Now

When everyone has a blog, a MySpace page or

Facebook entry, everyone is a publisher. When everyone

has a cellphone with a camera in it, everyone is a paparazzo. When everyone

can upload video on YouTube, everyone is

filmmaker.

Dominos Pizza Social Media Crisis Management Dominos quickly responded with channel

appropriate tactics and tone. Multi-tiered social media response

featured 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 consumers that this was an isolated incident

Domino's U.S.A. president issued an apology on YouTube, viewed 595,000 times

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

A crisis is unpredictable but not unexpected

- Timothy Combs -

Threat + Opportunity

The Brandshield Crisis Stages

Prevent

Contain

Grow

The Road to Redemption

1. Prepare & try to prevent issues from escalating 2. Recognize early signs (smoldering) with active

monitoring including social media

3. Define the real problem rather than the technical one

4. Containment: act fast; act decisively 5. Continuous communication to all stakeholders

striking the right tone

6. Show the new road ahead: new rules, procedures, prevention strategy

Crisis Management

Preparedness

There are crises that cannot be avoided, such as a natural disaster or 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 reach people, what to say -- via the compilation of a Crisis Management Manual

Equip crisis team with necessary skills -- via Crisis Simulation Training and Media Training

Handling

Crisis handling refers to the effort to limit the duration of the crisis or stop it from reaching other areas of the organisation. Effective crisis management includes crisis communications that not only can alleviate the crisis, but can sometimes bring the organisation a more positive reputation than before the crisis developed.

In a crisis when most people are in a state of panic, a tailor-made Crisis Management Manual is an important tool for effective crisis management as it guides the crisis team on its actions and communications. The capability to communicate, and to monitor, are equally important.

Recovery

Recovery refers to putting the business back on track. How people see 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 groups point of view.

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 and newsgroup 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-approved information. Dont 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 penetration with regular research 6.Show care

1.Remember; Its not over until its 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 own actions

3 Dimensions

Rational Facts

A crisis is often accompanied with a lot of speculation and incorrect reports. 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.

Emotional Value of The Brand

Every brand and corporation has its unique brand equities and when 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 product manufacturing 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 situation evolves, the brand value is a unique asset.

Use of Technology

In a situation where quick response and information accessibility is critical, 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. It avoids the risk of message deletion by the traditional media.

Risk Assessment Audit

What are your worst case scenarios? Please list and rank probability

What could the possible causes for the above crises be? Are the vulnerabilities caused by: What precautions are required for dealing with them? Has any one of the above scenarios happened before? How did

you deal with it? Does your department already have a crisis management plan?

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?

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 be

handled 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 CMT member

1.CMT formed 2.Who, what, where, when, how many involved, details confirmed 3.Agree further action needed 4.Identify whos been notified 5.Specialists tapped

1.Collect info, to determine magnitude and scope 2.Key internal & external audiences identified 3.Appoint person identified 4.Communications centralised

1.Comprehensive plan developed 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 made available 2.Assure timely updates 3.Document case 4.Document findings & actions

1.Feedback solicited 2.Identify breakdowns in action plan 3.Were the right people involved? 4.Learn from experience 5.Document learning 6.Implement improvement measures

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

Crisis Check List Sample

Analyst briefing Updates for employees Key messages 24 hours customer hotline Database strategy in place Media enquiry hotline

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

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

Arguments Against Communicating

There is no toll-free road out of a crisis. The choice companies face is between

paying sooner and paying later. Nigel Hollis, Chief Global Analyst, Millward Brown

Dont admit anythingwell get

sued!

We dont know whos to blame

yet!

When Should the CEO Apologize?

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 assume

responsibility 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 apologizeand when not, Kellerman, HBR 2006

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 apologizeand when not, Kellerman, HBR 2006

Case Study: JetBlue

JetBlue's crisis Wednesday Feb 21 2007

JetBlue has gone from hero to zero in an impressively 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.

Case Study: JetBlue The Apology

Think Actions, Not Just Words

Instead of what should we say, the first question should be: what should we do?

Communicating in a Crisis

Case Study: JetBlue The Aftermath

Review

10 Principles

Key principle 1: Planning

Pre-plan scenarios Map messages to

stakeholders Assume worst case planning position

Key principle 2: Speed

Get it right, get it quick, get it out, and get it over.

Remember the crucial Golden Hour

Key principle 3: Its the perceived problem

Define the REAL problem: Is it about a technical flaw or a

perception? recognize that emotions take over

and that technical or statistical defenses may throw fuel on the fire

Key principle 4: Centralize Information

Centralise / control information flow: Coming in Going out

Key principle 5: Dedicated Team

Isolate a crisis team from daily business concerns:

Crisis team Communication team

Key principle 6: The Well-supported Leader

Choose the best spokesman but in crucial times have the CEO lead from the front

But do not fully depend on one individual

Key principle 7: Tone is Crucial

Retain brand voice Playing defense is

offensive; dont play blame game

Resist combative instinct Consider the apology

Dont confine yourself to traditional PR.

Key Principle 8: Leverage All Channels

Have a dark web site ready

Consider a crisis blog Youtube videos Search engine crisis defense

Key principle 9: Know What Media Want

Understand the medias point of view

victims & bad guys damage speculation tensions Searching for cause / blame

Key principle 10: Leverage Good Relations

If feasible Broaden the issues Identify allies