Crisis Comms in SM World.11.08.09

“Crisis Communicationsin a Social Media World”
Gil Chavez
Professor - Globis University IMBA, International University of Japan (IUJ)
BC Consulting
BC Consulting
www.consult-bc.com
1

Agenda
The Basics
What is a Crisis?
Types, Examples, & Case Study
How do we handle it?
The New Reality
Managing the Data
“Water by the Ton”
Milliseverts
BP Oil Spill: Millions vs. Billions
2

The Basics
Crisis Communications 101
3

What is a Crisis?
Usually defined by:
1. Magnitude:
Is it great enough to threaten organization viability?
2. Time:
How much time is available to react and counter?

Crisis vs. Issue
Main differences: Magnitude and Time.
“A crisis is an issue that has been ignored until it has become huge enough and urgent enough to deal with.”
Ergo: M/T = Crisis Level
Question: Can you objectively judge magnitude and time in a true crisis situation?

Textbook Case Studies
Tylenol - classic (but really old) case.
Intel - classic (old, but not as old) case.
TEPCO / 911 - massive, multiple-event disasters involving government, public and companies.
Toyota accelerator problem: Silence = guilt.

Recent local examples?
Major events
TEPCO
JSA – “Yaocho”
Toyota
Food mislabeling
Ebisu Yakiniku
Meat Hope
SembaKitcho
Yukijirushi

Crisis Types
Natural disaster
Hurricanes, earthquakes, fires (Katrina, Great East Japan Earthquake)
Industrial / technological disasters
Oil spills, product recalls (BP, Toyota)
Confrontation
Boycotts, Labor strife
Attacks
Tampering, site hacking (Tylenol, Sony)
Management misconduct
Insider trading, bribery (Enron)
Violence
Employee or customer (US Post Office)
Terrorism
Rumors
P&G logo, Pepsi syringe

Deal with a Crisis Before it Happens
Preparation & Training are the Keys
Anticipate & assess risk.
Create a Response team.
Appoint a Spokesperson.
Train the Response team, Spokesperson, and the whole organization.

Deal with a Crisis Before it Happens
5. Create Holding statements and templates.
6. Develop a Notification System.
7. Set Up Assessment & Monitoring Systems.
8. Reload System – i.e. refining, learning.

Take Action
Action isn’t everything, it is the only thing.
Act fast, Act big
Even relatively ineffective measures show that you are doing something about the problem.
Buys time
Gives the media “something to eat”.

Case Study: Nishi-Shuzo
Contaminated rice:
Sept. 22 , 2008, Nishi-Shuzo, maker of Satsuma Houzan shochu ran full-page ads in major dailies announcing voluntary recall of 300,000 bottles.
Ads explained
Why it used rice in potato shochu
Compared their rice with other rice
Shochu is a refined alcohol, so no risk
Small maker and first time to run ads
Didn’t wait for test results/Posted results to web site
Lesson: Acting fast preempted crisis

Damage Assessment I
“Look for the 2nd, or 3rd explosion…”
Crises tend to weaken organizations
Trigger secondary or tertiary problems.
Avoid thinking that what has happened is an isolated event or that it will quickly pass.
Terrorism comes in clusters; so do other disasters:
Earthquake  Tsunami  Meltdown (TEPCO)
Product flaw  Consumer reaction B2B orders stop (Intel)
Drugs corporal punishment/death scandal  gambling (JSA)

Damage Assessment II
Start with Worst Case and Work Backwards
Identify the worst reasonable outcome at first
Don’t understate the problem
(Viewed as a lie if you announce later problem is worse.)
Example: TEPCO’s repeatedly extend evacuation zone.
Question: Why did TEPCO do this?

Messaging
The 4 C`s of crisis messaging:
1. Concern for those affected.
2. Cooperation with authorities.
3. Corrective measures.
4. Communication of these activities.

Social Media Concerns
1. Clueless
People who know nothing about the problem commenting on it.
2. Liars
People who want to influence the situation for own objectives.
3. Rumormongers
Fear and lack of knowledge drives speculation, which drives rumors.
4. Misinformed
Neither of the above, but people who simply missed parts and forwarding wrong info.
5. Noise makers
Every media outlet wants your attention now, from large organizations to the Twitterati and blogosphere.

What does that mean for us?
We must…
1. Anticipate bigger potential problems
2. Be prepared to take bigger action quicker
Auto recalls now executed at first sign of a problem.
3. Be able to explain what we do to new audiences.

The New Reality
Full control of communications is a thing of the past.
News media is pressured to report first, confirm later.
Huge increase in number of non-expert influencers commenting on your business and its problems.

Recommendation:
Aim to make your organization as open as possible – don’t wait to explain what you do and how your do it.
(ex. Zappos)
Use terms, numbers, and data understandable for the common person.
(Next section)

Managing the Data: Focus on Numbers and Terms
Crisis Communications 101
20

TEPCO: Water by the ton
“I went to the store for a kilo of milk…”
May 29, 2011 Yomiuri Shimbun:
“It will cost about 53.1 billion yen to decontaminate 250,000 tons of radiation-tainted water….”
How much water is that?

TEPCO: Water by the Ton
250,000 tons of water = 100 Olympic Swimming Pools
Olympic swimming pool (OSP): 2,500 metric tons of water
OSP = 1/200,000 sydharb (Sydney Harbour)

Millisieverts
Press Release:
Status of Fukushima Daiichi Nuclear Power Station (as of 9 am Mar 17, 2001)
“The radiation exposure of 1 TEPCO employee, who was working inside the reactor building, exceeded 100mSv and was transported to the hospital….”

Millisieverts
Which means what?
How long was he exposed?
How did it happen?
Which part of the body?
Results of the medical exam?

Millisieverts
Which means what?
Estimates measured annually or hourly:
9 mSv per year: Air crew on NYC – TOK polar route
100 mSv per year: Lowest level related to long-term, but extremely low, cancer risk
800 mSv per hour likely to cause radiation sickness; may increase risk of cancer by 2 to 4 percent.

BP Oil Spill 2010
Initially underestimated size of spill
Final total --
4.9 million barrels of oil
(a large number and an unfamiliar term)
And that means….?

BP Oil Spill 2010
312 Olympic Swimming Pools (206 million gallons)
That’s a lot….
And this is a lot more:
Gulf of Mexico total volume: 660 quadrillion (15 zeros) gallons
Roughly a 1:1 billion ratio

BP oil spill 2010
“If the Gulf of Mexico were the Superdome, the total spill would be three cans of beer inside.”
In Tokyo terms: 1 can of beer inside the Tokyo Dome
(1 Superdome = 3 Tokyo Domes)

Conclusions
“A crisis forces your organization to speak directly people who have no idea about your business.”
Once story takes shape, it’s difficult to change.
Focus on the numbers BEFORE the crisis.
Put them into understandable terms.
Place them in simple, daily context.

Thank you.
How to Find me:
Twitter:@gilchavez
Email: gil@consult-bc.com
Biz site: consult-bc.com
Personal site: gilchavez.com
Support the Pink Cow.

Crisis Comms in SM World.11.08.09

by Gil Chavez

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Crisis Comms in SM World.11.08.09 Presentation Transcript