crisis preparedness web

8/9/2019 Crisis Preparedness Web

1/61


2/61

Who Is that Vietnamese guy?


3/61

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


4/61


5/61


6/61

Media

Your boss

NGOs

Trade

Victims & theirfamilies

Government

Opinion

leaders

Staff

Consumers

Sales force

Crisis = Pressure


7/61

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


8/61

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.


9/61

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


10/61

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


11/61

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


12/61

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


13/61


14/61

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.


15/61

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


16/61

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)


17/61

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


18/61

So what’s different now?


19/61


20/61


21/61

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


22/61

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


23/61

“A crisis is unpredictable but not unexpected”

- Timothy Combs -


24/61


25/61

The Brandshield Crisis Stages

Prevent

Contain

Grow


26/61

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


27/61

Crisis Management


28/61

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


29/61


30/61

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.


31/61

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


32/61

3 Dimensions


33/61

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.


34/61

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.


35/61

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.


36/61


37/61

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?


38/61

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


39/61

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


40/61

Crisis Check List Sample

•

Analyst briefing• Updates for employees

• Key messages

• 24 hours customer hotline

• Database strategy in place

•

Media enquiry hotline


41/61

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


42/61

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


43/61

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!


44/61

When Should the CEO Apologize?


45/61

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


46/61

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


47/61

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.


48/61

Case Study: JetBlue The Apology


49/61

Think Actions, Not Just Words

Instead of “what should wesay,” the first questionshould be: “what should wedo?”

Communicating in a Crisis


50/61

Case Study: JetBlue The Aftermath


51/61

Review

10 Principles


52/61

Key principle 1: Planning

" Pre-plan scenarios

" Map messages tostakeholders

" Assume worst case

planning position


53/61

Key principle 2: Speed

" “Get it right, getit quick, get itout, and get it

over.”

"

Remember thecrucial “GoldenHour’


54/61

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


55/61

Key principle 4: Centralize Information

" Centralise / control

information flow:

– Coming in

– Going out


56/61

Key principle 5: Dedicated Team

" Isolate a crisis team from

daily business concerns:

–

Crisis team –

Communication team


57/61


58/61

Key principle 7: Tone is Crucial

" Retain brand voice

" Playing defense is

offensive; don’t play

blame game

" Resist combative instinct

"

Consider the apology


59/61

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


60/61

Key principle 9: Know What Media Want

" Understand the media’s

point of view

–

victims & bad guys – damage speculation

– tensions

– Searching for

cause / blame


61/61

Key principle 10: Leverage Good Relations

If feasible

– Broaden the

issues

– Identify allies

crisis preparedness web

Documents