Crisis Management and Communications Madison, WI Clarke L. Caywood, Ph.D.
21 st Century Crises
“ Media Reported Crises”
Front Page Crises
Business Page Crises
Definition of a Crisis
Crisis: an intense and urgent event or series of events that …
cause the death or severe risk to individuals
destroy stakeholder relationships
break the organization’s reputation and brand.
Which businesses are at greatest risk of crises?
Risk Consumers and Risky Products
Sell to children, elderly, poor,
Environmentally (ecology) sensitive
Products we eat, drink
Moving vehicles, cars, buses, motorcycles,
Skin care, aging cosmetics
Pharmaceuticals and healthcare instruments
Alcohol, tobacco, guns
Heavily regulated by government
Risk Management Response
Insurance industry calls for leaders to manage the reputations and brands of their firms.
Lack of a crisis plan and brand protection can increase costs of insurance or not allow insurance
Melamine milk powder 2008
Apology to victims of milk poisoning
September 26, 2008 CHINA'S Premier, Wen Jiabao, has sought to ease growing concern abroad over contaminated Chinese milk by vowing to strengthen safety checks and meet international standards, as more countries boosted testing of Chinese food imports.
Speaking from New York where he is attending the United Nations general assembly, Mr Wen said China needed to better enforce checks at every stage of production and step up efforts to protect consumer interests.
"We want to make sure that our products and our food will not only meet domestic and international standards, but also meet the specific requirements of importing countries," the Premier said.
Mr Wen's remarks underscored China's recognition that the scandal, which has sickened about 54,000 Chinese babies and is blamed for the deaths of four infants, also has repercussions beyond its borders with the reputation of its exports at stake.
Chinese officials have withdrawn lollies thought to contain contaminated milk from shop shelves, echoing the expanding recalls across Asia and Europe of products ranging from yoghurt to biscuits.
Chinese authorities yanked White Rabbit Candy lollies from shelves in Shanghai and the southern province of Hainan in the first widely known recall on the Chinese mainland of goods other than milk products and milk.
Tools to Manage and Audit Crises: Stakeholder Maps NGOs Investors Analysts Consumer Suppliers Press Community Universities Employees Government Competitors Company
CEO’s on Stakeholders
Sr. V.P. “CEO’s are looking for leaders who can understand and integrate the corporate stakeholders, not just customer and not just business functions”. Cited September 2009 Chicago
Discuss the dynamics of the list – power, resources, partners
Draw the maps
Assign Stakeholder Managers
Review and Improve
Stakeholder Maps NGOs Investors Analysts Consumer Suppliers Press Community Universities Employees Government Competitors Company
Colchicine and Yasmin http://www.youtube.com/watch?v=EO-G8O0lHq0&feature=relatedhttp://www.youtube.com/watch?v=uCg1q0h1PP0http://www.promega.com/Default.asp http://www.adrugrecall.com/yaz-birth-control/yasmin.html
Let’s build a stakeholder map for your industry and profession
Discuss the dynamics of the list – power, resources, partners
Draw the maps
Assign Stakeholder Managers
Review and Improve
Advanced Map Dynamics and Metrics
SH Estimated Degree of Impact (size of circle)
SH Past, Current, Future Influence Timing (dated)
SH Linkages between Stakeholders (alliances)
SH Conflicts between Stakeholders (battles)
SH Boundaries more open or rigid (thickness of circle line)
SH Frequency of Contact (Proximity to Core Circle)
SH Many Contacts in SH (thickness of line to circles)
SH Public and Media Perceptions of “tone” (number of + or – symbols)
SH History Tracked and Monitored (dated and saved)
Retail Channel Stakeholder Maps University Research Competitors TSA US Trade Shows JIT suppliers Air, Sea, Rail, Land Illegal copies of product Labor Unions Docks Box stores Consumer Shipping Government Retailers Company
U.S. Food Quality Recalls Annual
U.S. Autos Recalls: Is this a Constant Crises?
Vehicles Select your year, make and model to retrieve any RECALL NOTICES. Year » 2008 » 2007 » 2006 » 2005 » 2004 » 2003 » 2002 » 2001 » 2000 » 1999 » 1998 » 1997 » 1996 » 1995 » 1994 » 1993 » 1992 » 1991 » 1990 » 1989 » 1988 » 1987 » 1986 » 1985
TOYOTA – Watch your back
Your companies: Is a management problem or is it a crisis?
Someone died near your product.
It’s a law suit taking 20% of your time.
Your stock has taken a major hit.
You lost a major customers or supplier.
Requires more than 5 trips to Washington D.C. or to Madison, Springfield, Albany.
It appeared in a blog, the trade press called and the popular press are calling.
Hearing comments are being prepared.
You wish you had kept the notes from today.
If it was 4 of the previous and more it was a …
If you came home late, muttering under your breadth, needed a drink and as a man or a woman wished you had a real cave… it was probably just another day at the office.
You should consider applying more ideas from your degree from the UW.
Research, professional articles and projects for you…
Best practices on management of recalls
Six Sigma and ISO Standards
Crisis Plan and Ready Website to go dark
Defining your firm with audits on high visibility and high risk
Go to the Library …is there still a bar named the Library on Park Street?
No, Near Randall/Univ.Ave.The Library Cafe & Bar
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Mattel Apologies to Customers and China 2009
Mattel Recalls: Crises?
Keyword (s): Phone: Zip/Postal Code: Home Recall Information Please select a recall from the list below and follow the link to learn about that recall. Return to this page if you are interested in learning about additional recalls. This list includes Mattel recalls announced since August 4, 1998. For general recall information on any consumer product, and for earlier Mattel recalls, please visit www.recalls.gov . DateDescriptionProduct # 09/4/2007 Barbie® Accessory Sets Lead Paint Hazard Recall K8609K8608K8607K8606K8613J9485J9486 09/4/2007 GeoTrax™ Engine Lead Paint Hazard Recall H5705K3013 09/4/2007 It's a Big Big World™ Lead Paint Hazard Recall K9343 08/14/2007 Mattel Playsets with Magnet Hazard Recall J1944J1946J4142J5114J5115G4457G4458G4459G4460G4461G4462G4464G9703H1530H1532H1533B7124B2632B3158B3201B3203B3204B3207B3209B3210B3211B3396B7078B7082B7118B7125B7127B7129B8478B9521B9522B9523B9525B9578B9929C0504C0505C1341C1342G8602G8605G8612G8614G8615H1537H1538H1553H1554H3211J1659J1661J1662J1670J1681J1687J1695J4169J4170J4171J4172J9305J9306J9648J9965J9966K3460 08/14/2007 Barbie® Doll and Tanner™ Magnet Hazard Recall J9472J9560 08/14/2007 Pixar Cars Sarge Lead Paint Hazard Recall H6414M1253K5925L6294L4051 08/01/2007 Fisher-Price Toys with Lead Paint Hazard Recall H5570J6763L5202L3507B78889026790267H3344H5569J6765L581393107G971793492J0338H9124K3580H4628K3571J034693493J6537H9125K0617H8236346583366293615J0343H9186L3194H82379061433664B7554J0344H9188H4187H82388794690611B7989J0345H2943L3215M052493780C6908H9203K4139L0305M0527906099330890745C6911J9518K4140M0351M20519061393307C6909C6910J9692M0352M20529061239054B7987B9620K3414J5935G5112J79839306839038J6762J5936J2248M0732G382533663H3343------------------------------------------------------ Sold inCanada H6859J1136J9451K9287L5342H4650H4649K0730K2448 05/30/2007 Rainforest™ Open Top Take-Along Swing™ Recall K7203 02/15/2007 Laugh & Learn™ Learning Bunny™ Recall K0468K5862K6898K7884L0327 11/20/2006 Polly Pocket!™ Assortments B2632B3201B3158G8605H3211H1538H1537B7118 1/18/2006 Laugh & Learn™ Musical Learning Chair™ Recall H4609H7168 6/14/2005 Power Wheels Lightning PAC™ Tire Recall 73530 6/14/2005 Power Wheels MX3™ Mini Bike Tire Recall 73535 5/10/2005 Grow-To-Pro® Recall 7338677356 5/10/2005 Lil' Wagster Dragster™ B0335 4/14/2004 BATMAN™ BATMOBILE™ Vehicle B4944 11/13/2003 Power Wheels MX3 Mini Bike 73535B2222 11/13/2003 Power Wheels Lightning PAC™ 73530 6/19/2003 Sparkling Symphony™ Mobile 71985 4/23/2003 Little People® Animal Sounds Farm™ 7797377746 4/10/2002 Smart Response™ Swing 796457964779644 7/31/2001 Bassinet 793367933879334 7/31/2001 Grow to Pro® Basketball 72408
Product Image Elmo Light Up Musical Pal33662 Ernie Light Up Musical Pal33663 Big Bird Light Up Musical Pal33664 Elmo Stacking Rings34658 Elmo Tub Sub39038 Sesame Street Shape Sorter39054
Product Image Elmo Light Up Musical Pal 33662 Ernie Light Up Musical Pal 33663 Big Bird Light Up Musical Pal 33664 Elmo Stacking Rings 34658 Elmo Tub Sub 39038 Sesame Street Shape Sorter 39054
Mattel Apologizes for its toys
UPDATE 1-Mattel apologizes to China for product recalls
Fri Sep 21, 2007 5:26am EDT
(Adds quotes, background)
BEIJING, Sept 21 (Reuters) - A senior Mattel executive apologized to China on Friday for recent recalls of Chinese-made toys and said it took full responsibility.
Mattel, the world's largest toy maker, has come under scrutiny following the recall of about 21 million of its Chinese-made toys in a span of five weeks, many because of excessive levels of lead paint.
"Our reputation has been damaged lately by these recalls," Thomas Debrowski, Mattel's executive vice president of worldwide operations, told China's quality watchdog chief, Li Changjiang.
"Mattel takes full responsibility for these recalls and apologises personally to you, the Chinese people and all of our customers who received the toys."
He said he realized the damage that had been done to the reputation of Chinese goods.
"But it's important for everyone to understand that the vast majority of those products that we recalled were the result of a design flaw in Mattel's design, not through a manufacturing flaw in Chinese manufacturers."
Before the Mattel recalls, a spate of incidents involving unsafe Chinese products ranging from toys and seafood to toothpaste that entered both EU and U.S. markets prompted calls on both sides of the Atlantic for a ban on products "made in China".
Don’t be this CEO…
http://www.youtube.com/watch?v=-r_PIg7EAUw Jet Blue
http://www.youtube.com/watch?v=IcVDok5LrAg attack on Baxterhttp://www.youtube.com/watch?v=IcVDok5LrAg
Crisis leadership has two important components…
Behavior – determines the outcome … what you do, how you do it, when you do it.
Communications – telling the story in a way that lets you become an advocate for the public in the media and other.
Leadership for Crises Management
Warning - signs of trouble?
Acute - Initial response,
Final Phase and resolution
Crisis management is more about how the crisis is handled
Don’t wish it will go away
Don’t let lawyers tell you to be silent.
Don’t have an agency speak for you.
Actions: write press release in advance, practice media training, have clear values, act first hour,
reveal truth early
Financial Costs of Crises
The cost of crisis is determined more by the market than by the courts.
Litigation costs are almost always the smallest segment.
Loss of equity is immediate and severe, and stock prices do not automatically rebound.
The loss of reputation is the greatest damage
2. Warning Phases of Crises
Often common to an industry Financial scandals
Product failure - recalls
Use issues and trend tracking
Use research and planning
Be sure to cancel ads
3. Acute Phase
Corporation must respond – Do not say “no comment”. Do not wait for investigation results.
Your initial response is crucial
As a “public figure”, you frame the issue and set agenda with key message .
All witnesses are “ journalists ” with cameras
Solutions: Video and Blogs, VNRs ready, cancel ads
Be ready with web page to go “dark”
ID and train spokesperson (and others)
Know third party experts for referral, you are the brand,
Build lifelong media relationships,
You acted as a “human”, then communicated
You located the crisis team and met quickly and frequently - all numbers
You avoided just protecting management
You saw the crisis through stakeholder’s eyes
You acted as a “public figure”
4. Final Phase
Crisis Training: The Seven R's R Respond 1… “An hour ago we learned…” R Regret 2 … “If this is true we are outraged” R Resolution 3… “We will fix the problem now” R R Restitution 4… “We will aid each family” Reform 5… “We will do everything possible to be sure that this never happens again.” R
Responsibility 6… “As CEO I accept…”
Reputation/Brand Rebuilding 7… “We recognize that we exist with the permission of society.” More Media Training for You? R R R