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Module 6:  Media Relations and Crisis Communications
Emails you don’t want to receive Dear Maybank Customer, Serious security treat in your account. Follow below reference to ...
Verifying email
Hoax: Ericsson free phone offer <ul><li>An email promising a  free handphone  from Swedish telco giant Ericsson </li></ul>...
<ul><li>Contacted Peter Bodor, PR manager of Ericsson Mobile Communications who confirmed the  chain mail is hoax.   No pe...
Tommy Hilfiger – a racist?
Problems with Internet rumours <ul><li>Difficult to identify source. </li></ul><ul><li>Can’t tell how widespread. </li></u...
Samsung phone easily broken?
YouTube video taken down
Fighting rumours, Obama-style <ul><li>Not born in America </li></ul><ul><li>He’s a Muslim </li></ul><ul><li>He swore on th...
Michelle Obama Rumour <ul><li>Ordered expensive room service lunch at the Waldorf-Astoria in New York  </li></ul><ul><li>C...
Politifact.com   and Truth-o-meter
Fightthesmears.com
Fightthesmears.com
Coca-Cola fights myths online http://www.thecoca-colacompany.com/contactus/myths_rumors/
Case study: AirAsia
“ N ow everyone can fly ,   except the disabled” NST, July 16, 2007
Initial crisis response <ul><li>“ We have to change the whole configuration of their planes to accommodate totally paralys...
AirAsia buys two ambulifts –  August 4, 2007 “ Despite assurances by AirAsia CEO Datuk Tony Fernandes on July 20 and again...
Dell laptop explodes  at Japanese conference <ul><li>By INQUIRER.net newsdesk: Wednesday 21 June 2006 </li></ul><ul><li>An...
 
 
Good news, get it out fast Bad news, get it out faster !
Dell to recall 4 million  laptop batteries <ul><li>CNET News.com,August 14, 2006 </li></ul><ul><li>Dell and the U.S. Consu...
Sony delays response, problems deepen… <ul><li>Aug 15, 06: Dell recalls 4.1m batteries </li></ul><ul><li>Aug 24, 06: Apple...
ThinkPad explodes in LAX airport ,   posting on Gizmodo.com, Sept 16 “ So we're waiting for a flight in the United lounge ...
Charred remains of IBM  notebook on terminal floor
Crisis Escalates, Spreads  Like Viral Fever
Sony finally responds… <ul><li>Sept 30, 2006:   Sony finally announces  global recall of 9.6 million PC batteries.  The re...
1.  Determines cause  – battery supplier, executes costly remedial action with safety in mind. 2. Liaises with authority: ...
'Alien' substance caused Dell  notebook battery to ignite <ul><li>By Julian Matthews, ZDNet Asia October 23, 2000. </li></...
<ul><li>The Concept Of </li></ul><ul><li>P.E.A.R  </li></ul><ul><li>In Crisis Communications </li></ul>
<ul><li>Safeguard P eople </li></ul><ul><li>Protect the   E nvironment </li></ul><ul><li>Protect company   A ssets </li></...
<ul><li>Dell alerts customers, warns of danger, sets up website for recall & replacement </li></ul><ul><li>Dell continues ...
Exercise:  Determine Sony’s response  based on material provided <ul><li>Divide into 3 groups </li></ul><ul><li>Read summa...
Slippery slope of customer adulation
 
Sony execs’ bow not deep enough? “ We want to put this behind us. I take this problem seriously and I want to finish the r...
 
http://www.ideastorm.com
Real-time support on Twitter
<ul><li>Consider People, Environment, Assets, Reputation  </li></ul><ul><li>Set up crisis management unit:  role-play stra...
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06.Crisis communications

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  • Email hoax: “Snake swallows man: BIG NEWS in Taman Negara” “ Be careful when you are at Taman Negara.Tragedy at Pahang&apos;s Nature Reserve A Form Four student on a camping trip, organized by his school,was found dead, after having been swallowed by a 10 meter-long python. Both the newspapers media and the state government of Pahang kept this news from the public to avoid bad publicity and scaring away potential tourist-campers.... “ Turns out same rumour in Borneo, Singapore, South America, elsewhere. Third pic obvious fake. See: http://www.snopes.com/horrors/animals/anaconda.asp
  • Before sending email check with Google: Run the subject title in email plus the word +hoax and see what pops up. Otherwise search snopes.com, hoax-slayer.com or David Emery’s http://urbanlegends.about.com/
  • April 13, 2000, CNET, By Julian Matthews KUALA LUMPUR-- An email promising a free handphone from Swedish telco giant Ericsson and circulating among Asian Internet users is a hoax, confirmed a company spokesperson today. &amp;quot;Ericsson is not giving away free phones. The chain mail is a fraud and there is no person with the name of Anna Swelund working at Ericsson. At Ericsson, we are constantly looking at new, innovative ways to market ourselves, chain emails is not one of them,&amp;quot; said Peter Bodor, public relations manager of Ericsson Mobile Communications in an email response. Bodor said the company first detected the fake email at the end of March and has received about 1,000 emails since, mainly from Europe, and also from the US and Asia. He added, however, the volume did not crash its mail server. The contents of the email suggested that those who forwarded the email to eight friends would receive a free Ericsson T18 handphone within two weeks. If forwarded to 20 friends, senders were promised &amp;quot;a brand new Ericsson R320 WAP (Wireless Access Protocol) phone.&amp;quot; It also reminded the recipient to send a copy of the email to the fictitious Anna.Swelund@ericsson.com address, supposedly belonging to an executive promotion manager for Ericsson Marketing. Bodor said the company would attempt to trace the originator of the email. &amp;quot;Currently, we do not know if it originated from within or outside the company,&amp;quot; he said. He added that this was not the first time Ericsson was hit by such chain letters, and that other companies like Nokia, Microsoft and Disney were similarly affected. Ericsson posted a notice on its Web site Monday advising people to discontinue forwarding the email and apologized for the inconvenience…. Link: http://www.trinetizen.com/archive/?p=113
  • &amp;quot;It&amp;quot; was the shocking story that had circulated for years on the Internet and through word of mouth: Hilfiger, known for his colorful, preppy styles, had supposedly appeared on The Oprah Winfrey Show to air a disturbing grievance. &amp;quot;If I had known that African-Americans, Hispanics, and Asians would buy my clothes, I would not have made them so nice,&amp;quot; Hilfiger complained. &amp;quot;I wish those people would not buy my clothes—they were made for upper-class whites.&amp;quot; According to the tale, an outraged Winfrey immediately asked Hilfiger to leave her show—and when she came back from a commercial, he was gone. Never mind that intentionally alienating your core market isn&apos;t exactly a shrewd business strategy. Never mind that Hilfiger had founded a philanthropic fund to benefit inner city youth long before the rumor even appeared, or that he donated over $5 million toward building a memorial to Dr. Martin Luther King Jr., in Washington. Of course, Hilfiger had never said anything of the sort. At the time the rumor surfaced and spread, Hilfiger had never been on The Oprah Winfrey Show. In fact, the two had never met until 2007, when Winfrey did invite him onto the show to try to squelch the rumor once and for all: Psychology Today.
  • In Sept 2006, a 21-second video circulating on the Internet entitled &amp;quot;Samsung handset, easy to break at one try!&amp;quot; shows a smiling woman snapping the slim Samsung Ultra Edition mobile phone in half. The 6.9mm thick the Samsung SGH-X820 is marketed as the thinnest mobile phone on the market. So when a video appears on the internet of a woman quite easily snapping the phone in half, you have to wonder have Samsung gone too far in the handset diet wars? However, all is not as it seems. Although the video was first seen less than a week ago it has now been removed Samsung launched an investigation, and claimed the handset may have been damaged to make it appear easy to break. It says the Ultra is made of new materials such as magnesium and fiberglass-infused plastic. YouTube later issued take down notice stating: “The video has been removed at the request of the copyright owner Motorola, Inc, because its content was used without permission.” Samsung is furious about the video, claiming it was designed to damage its reputation and threatens action. Motorola have been firmly denying any involvement saying &amp;quot;...It is unthinkable that a global company like Motorola is involved in such unethical conduct...&amp;quot;   Was Motorola scared that their RAZR line of phones is becoming tired and might be surpassed by Samsung&apos;s Ultra Edition, so they employ mudslinging amongst the online geek community? Samsung is furious that their reputation for build quality is in question and have told the press and public that the event in the video can&apos;t be recreated in normal circumstances due to the fibreglass infused plastic used, implying that the phone must have been tampered with. Samsung said it was considering taking legal action on who made and distributed the video.
  • The New Yorker ran a controversial parody of all the rumours circulating around the Obamas.
  • Summary of the eRumor:   A rumour about Michelle Obama&apos;s very expensive room service lunch at the Waldorf-Astoria in New York consisting of lobsters, imported caviar from Iran and champagne racking up to a total cost of $447.39.   The Truth:   This story was based on an article published in the New York Post on  October 17, 2008. Four days later, however, the Post removed the article from its website and all links about it were directed to a retraction of the story.The retraction said, &amp;quot;THE source who told us last week about Michelle Obama getting lobster and caviar delivered to her room at the Waldorf-Astoria must have been under the influence of a mind-altering drug. She was not even staying at the Waldorf. We regret the mistake, and our former source is going to regret it, too. Bread and water would be too good for such disinformation.&amp;quot;
  • According to a poll, 11 percent of Americans believe the rumor that Barack Obama is secretly a radical Muslim who refuses to say the Pledge of Allegiance and was sworn into the Senate on the Quran
  • In any crisis it is best to respond quickly. With the speed of the Internet, and mobile media and self-publishing tools like blogging and podcasting, speed and accuracy from a credible source is utmost of importance. Assess the damage quickly, determine the cause, bring in the experts, liaise with the authorities and tell the truth. If you hide any facts that you are already aware of, the media is likely to go dig up or worse still concoct its own story based on unreliable sources, sending your reputation and management of the crisis into a tailspin. Get the real story out before others -- within and outside the company -- make matters worse by revealing inaccuracies and escalating the crisis.
  • Sony on other hand downplays its role in the recall, letting Dell and later Apple make announcements of their own, In the end up to ten other manufacturers were involved and each made painful announcements of their own – even those who didn’t have any “exploding laptop” incidents. Sony seemed to believe its silence would make the problem go away. But the weak response suggested to consumers that it just didn’t care, even has more incidents were being reported around the world, and the crisis was amplified over the Internet, worsening the depth of the problem.
  • When Gizmodo, a very popular gadget blog in US broke the story with these amazing pictures, things were looking worse for Sony. ThinkPad explodes in LAX airport, posting on Gizmodo.com, Sept 16 “ So we&apos;re waiting for a flight in the United lounge at LAX, the flight next to ours was heading to London and in the middle of final boarding, when suddenly this guy comes running the wrong way up the jetway, pushing other boarding passengers out of the way, he quickly drops his laptop on the floor and the thing immediately flares up like a giant firework for about 15 seconds, then catches fire. About a hundred other people in the lounge jumped up and began a mix of gawking and general panic, I clearly heard a few fleeing individuals saying something about terrorists. The fire burned for a minute while everybody just stared at it, then another flare up, this one much larger than the first, drove a larger group of gawkers away. Eventually, the high intensity flaring calmed down and a larger fire kicked in, all the while letting off a thick cloud of white smoke that was slowly filling the terminal. Finally, an employee came over with a fire extinguisher and put it out of its misery…..”
  • The immediacy and power of mobile media and the current self-publishing nature of the Internet through blogs, podcasting, photo/video sharing sites, make addressing a crisis for corporations even more a priority. The face you represent to both the public and in online media must be consistent and show your credibility. In any crisis, dispersion of information on the crisis on the Internet is an imperative. False videos and faked photos must be counteracted upon quickly. The accurate picture must be framed in customers’ minds. In this incident despite the worldwide recall announcement, even users in Yahoo had no adhered to the recall and returned the battery. Dell responded by urging customers to replace the defective batteries. Sony had yet to issue a recall.
  • AP, Oct 26, 2006: Sony&apos;s profit plunged 94 percent for the July-September quarter as a global battery recall and red ink in its video-game business hurt the Japanese electronics and entertainment company. Sony Corp.&apos;s group net profit for the fiscal second quarter totaled 1.7 billion yen (US$14 million; euro11 million), dwindling from 28.5 billion yen the same period the previous year, the Tokyo-based manufacturer said Thursday.
  • Dell took charge of situation by assessing cause and liaising with authority to announce a global recall. Dell to recall 4 million laptop batteries CNET News.com,August 15, 2006 Dell and regulatory agencies worldwide plan to recall 4.1 million notebook batteries, a company representative in the United States has confirmed. The recall affects certain Inspiron, Latitude and Precision mobile workstation units shipped between April 2004 and July 18, 2006. Sony manufactured the batteries that are being recalled, the representative said. The recall announcement -- made a few hours ago in the United States -- followed chairman and founder Michael Dell&apos;s statement yesterday morning in Australia the computer maker was still investigating incidents where batteries in its laptops have reportedly exploded….
  • INTRODUCTION: In Malaysia currently we are undergoing a national crisis. A crisis that is a natural disaster in terms of widespread flooding. In life we have personal crises, family crises, and domestic crises. The companies we work for are vulnerable to crises. Every organisation can undergo a crisis eg. a fraud; an explosion , a leak of sensitive information; a hostile takeover bid; robbery; a dangerous product or design fault; sabotages; boycotts; natural disasters such as flood or accidents or a fatal building fire. Crises can strike at any time, BUT THE MANAGEMENT OF CRISIS can be planned for. You can examine your vulnerabilities and take pre-emptive actions. You can set up a crisis management unit and identify all the things that could go wrong within your organisation and gauge your response. In the event of a major crisis, in which lives are involved, the concept of responding using the P.E.A.R method is useful. People, Environment, Assets and Reputation handled in that order puts perspective on your crisis communications response.
  • In P.E.A.R, one puts the highest and most important valuation on the people involved. For example, in a recent helicopter crash, involving staff of an oil and gas company, in which 21 people were rescued but a pilot lost at sea, the response was swift. The oil and gas company took ownership of the crisis and the People involved, even though only a few of its staff -- the others were contracted workers -- were involved and the helicopter was not their own. Repeatedly in media, it indicated its emphasis on the state of victims affected, the relatives that were informed, the continued search for the missing pilot and expressed its care and concern for the people. Secondly, it emphasized the environment was safe by suspending all flights to its oil rigs on those particular helicopters to ensure safety of future flights. An investigation was launched to determine cause. Only then did it indicate that business was usual and assured stakeholders, as a public-listed company, that operations would not be unduly affected by the suspensions of helicopters. By handling the P.E.A. first, and showing it cared, the company kept its reputation and image intact.
  • Customers don’t care whose problem it is, they only want it fixed. Dell took ownership despite a reluctance by its supplier to admit fault. It initiated a recall, placing the lives of people who might be affected over the loss of reputation. As this article by Steve Hamm in Networld magazine on Aug 30 explains: DELL&apos;S DAMAGE CONTROL.  By then, Dell was working closely with the government to figure out the scope of the problem. It turned out the glitch was the same as it had been late last year: metal particles inside the battery were causing the problems. Apple&apos;s problems with overheating batteries had been cropping up in the online media during the spring and summer as well. The CPSC&apos;s Stern says Sony connected the dots and figured out which of its batteries and which of its customers were affected. After The Inquirer&apos;s scoop and a stepped-up investigation, Dell and Sony proposed a second recall to the CPSC. Once again, the Inquirer scooped everyone. On Aug. 13, writer Theo Valich reported that another recall was on the way. Magee says the leak came from a Dell insider, whom he refuses to identify. &amp;quot;I attribute being on top of the story to old-fashioned print journalism standards—cultivating, and, if you&apos;ll excuse the pun, not burning such contacts,&amp;quot; he says. The formal recall was announced a day later, on Aug. 14. Once Dell announced the recall, it, too, harnessed the Web to reach out to the disgruntled computing masses. On Aug. 14, the company set up a Web site ( http:// www.dellbatteryprogram.com / ) telling customers how to get a replacement battery. On its customer-service blog, ( http://www.direct2dell.com/ ), Dell also published the first of nine postings (so far) from executives and staffers about the recall. These included blow-by-blow descriptions of Dell&apos;s response from Alex Gruzen, senior vice-president of the company&apos;s Mobility Product Group, and a detailed explanation of how lithium-ion batteries work from Forrest Norrod, vice-president of engineering. EMBRACING THE BLOGOSPHERE.  The company also elicited dozens of comments from customers, some of whom were plenty irked. On Aug. 15, George Johnson demanded to know why Chairman Michael Dell hadn&apos;t responded to questions about the battery problems at a press conference the previous day in Sydney, Australia. &amp;quot;When he was asked about the recent problems and if there were any developments, he did not volunteer the information that a new battery recall was in the works. If he was so concerned about customer safety, why was the announcement held over until after the press conference was over?&amp;quot; asked Johnson. But most people who commented praised Dell for its response. &amp;quot;I commend Dell for looking out for the consumer on this issue,&amp;quot; wrote Jim Jones. &amp;quot;I have been fearful of leaving my system on while unattended. It&apos;s nice that I can leave my system on overnight and not have to worry about my house catching fire.&amp;quot; Dell credits the blogosphere for helping it get through the crisis. &amp;quot;Information travels around quickly,&amp;quot; says spokeswoman Gretchen Miller. &amp;quot;Also, it&apos;s another channel to get the message to our customers so they can be safe.&amp;quot;
  • You should have total autonomy on your own blog. That’s a heavy responsibility sans protection from legal eyes and scrutiny from higher-ups. When disclosing information during a crisis, try to get it right the first time. When you get it wrong, apologize immediately. We all have to re-learn how to have conversations online.
  • Ideastorm solicits ideas from the community and Dell posts status on popular ideas. Starbucks has followed suit using an application from Salesforce.com
  • The principles of P.E.A.R emphasizes caring for people and environment as a priority. Once you show you care for the damage done and the means by which you will safeguard the people, the crisis takes on a more positive spin. When a crisis happens, you are already in a no-win situation. Better to acknowledge fault, not play the blame game, and take charge of mitigating the crisis. Denial, and waffling will worsen the situation.
  • Transcript of "06.Crisis communications"

    1. 1. Module 6: Media Relations and Crisis Communications
    2. 2. Emails you don’t want to receive Dear Maybank Customer, Serious security treat in your account. Follow below reference to reactivate now. http://www.maybank2u.com.my/active.asp.html Yahoo! Mail gives members random cash prizes. Today, your account is randomly selected as one of 5 top winners I AM PRINCE DESMOND OKOTIEBOR ETETE. THE NEXT HEIR TO THE THRONE OF THE OIL RICH KINGDOM OF THE OGONI COMMUNITY. I HAVE A HUGE AMOUNT OF MONEY PRESENTLY IN THE PALACE.THE FUNDS WERE REALISED FROM OIL ROYALTIES THAT WAS PAID TO MY LATE FATHER. I NEED YOUR URGENT ASSISTANCE IN TRANSFERRING THE SUM OF US$330 MILLION IMMEDIATELY TO YOUR ACCOUNT.
    3. 3. Verifying email
    4. 4. Hoax: Ericsson free phone offer <ul><li>An email promising a free handphone from Swedish telco giant Ericsson </li></ul><ul><li>Those who forwarded the email to 8 friends would receive a free Ericsson T18 handphone within two weeks. If forwarded to 20 friends, senders were promised &quot;a brand new Ericsson R320 WAP phone.&quot; </li></ul><ul><li>Reminded the recipient to send a copy to Anna.Swelund@ericsson.com of Ericsson Marketing. </li></ul>
    5. 5. <ul><li>Contacted Peter Bodor, PR manager of Ericsson Mobile Communications who confirmed the chain mail is hoax. No person named Anna Swelund in company. </li></ul><ul><li>The company has received about 1,000 emails, mainly from Europe, and also from the US and Asia. Did not crash its server. </li></ul><ul><li>This was not the first time Ericsson was hit by such chain letters, and that other companies like Nokia, Microsoft and Disney were similarly affected . </li></ul><ul><li>Ericsson posted a notice on its website advising people to discontinue forwarding the email and apologized for the inconvenience. </li></ul><ul><li>Link: http:// www.trinetizen.com/archive/?p =113 </li></ul>How to kill a hoax
    6. 6. Tommy Hilfiger – a racist?
    7. 7. Problems with Internet rumours <ul><li>Difficult to identify source. </li></ul><ul><li>Can’t tell how widespread. </li></ul><ul><li>If you choose to ignore, it may go viral. </li></ul><ul><li>If you choose to fight it, it may attract more attention. </li></ul><ul><li>If partly true – “where there is smoke there is fire” – a denial may seem insincere and fan the flames. </li></ul>
    8. 8. Samsung phone easily broken?
    9. 9. YouTube video taken down
    10. 10. Fighting rumours, Obama-style <ul><li>Not born in America </li></ul><ul><li>He’s a Muslim </li></ul><ul><li>He swore on the Quran when he took oath as senator </li></ul><ul><li>Funded by foreigners </li></ul><ul><li>“ Palling around with terrorists” </li></ul>
    11. 11. Michelle Obama Rumour <ul><li>Ordered expensive room service lunch at the Waldorf-Astoria in New York </li></ul><ul><li>Consisted of lobsters, imported caviar from Iran and champagne racking up to a total cost of $447.39.   </li></ul><ul><li>New York Post published rumour on October 17, 2008.  </li></ul><ul><li>Four days later, retracted story: &quot;The source must have been under the influence of a mind-altering drug.&quot; </li></ul>
    12. 12. Politifact.com and Truth-o-meter
    13. 13. Fightthesmears.com
    14. 14. Fightthesmears.com
    15. 15. Coca-Cola fights myths online http://www.thecoca-colacompany.com/contactus/myths_rumors/
    16. 16. Case study: AirAsia
    17. 17. “ N ow everyone can fly , except the disabled” NST, July 16, 2007
    18. 18. Initial crisis response <ul><li>“ We have to change the whole configuration of their planes to accommodate totally paralysed passengers…. it was not feasible ,” said AirAsia CEO Tony Fernandes. (NST, July 17, 2007) </li></ul>
    19. 19. AirAsia buys two ambulifts – August 4, 2007 “ Despite assurances by AirAsia CEO Datuk Tony Fernandes on July 20 and again on August 4 this year that disabled passengers will be treated with dignity, the airlines is still subjecting disabled passengers to discriminatory policies,” writes Peter Tan from The Digital Awakening, after he was required to sign an indemnity releasing AirAsia from all liabilities – Wikipedia entry and on http://www.petertan.com/blog
    20. 20. Dell laptop explodes at Japanese conference <ul><li>By INQUIRER.net newsdesk: Wednesday 21 June 2006 </li></ul><ul><li>An Inquirer reader attending a conference in Japan sat just feet away from a laptop computer that suddenly exploded into flames, in what could have been a deadly accident. </li></ul><ul><li>Gaston, our astonished reader reports: &quot;The damn thing was on fire and produced several explosions for more than five minutes&quot;… </li></ul><ul><li>For the record, this is a Dell machine ,&quot; notes Gaston. &quot;It is only a matter of time until such an incident breaks out on a plane,&quot; he suggests. </li></ul><ul><li>Our witness managed to catch all the action in these amazing pictures…. </li></ul>
    21. 23. Good news, get it out fast Bad news, get it out faster !
    22. 24. Dell to recall 4 million laptop batteries <ul><li>CNET News.com,August 14, 2006 </li></ul><ul><li>Dell and the U.S. Consumer Product Safety Commission plan to recall 4.1 million notebook batteries on Tuesday, a company representative confirmed. </li></ul><ul><li>The recall affects certain Inspiron, Latitude and Precision mobile workstations shipped between April 2004 and July 18, 2006. Sony manufactured the batteries that are being recalled, the representative said. </li></ul><ul><li>This looks like the largest battery recall in the history of the electronics industry , said Roger Kay, an analyst with Endpoint Technologies Associates. &quot;The scale of it is phenomenal.&quot; </li></ul>
    23. 25. Sony delays response, problems deepen… <ul><li>Aug 15, 06: Dell recalls 4.1m batteries </li></ul><ul><li>Aug 24, 06: Apple recalls 1.8m batteries </li></ul><ul><li>Sept 15, 06: Virgin Atlantic, Qantas and Korean Air </li></ul><ul><li>ban use of Dell and Apple laptops on board its planes, unless the battery removed. </li></ul><ul><li>Sept 28, 06:Lenovo/IBM: 526,000 batteries </li></ul><ul><li>Sept 29, 06:Dell increases recall to 4.2m </li></ul><ul><li>Sept 29, 06:Toshiba recalls 830,000 batteries </li></ul>
    24. 26. ThinkPad explodes in LAX airport , posting on Gizmodo.com, Sept 16 “ So we're waiting for a flight in the United lounge at LAX, this guy comes running the wrong way, pushing other passengers out of the way and quickly drops his laptop on the floor. The thing immediately flares up like a giant firework for about 15 seconds, then catches fire….”
    25. 27. Charred remains of IBM notebook on terminal floor
    26. 28. Crisis Escalates, Spreads Like Viral Fever
    27. 29. Sony finally responds… <ul><li>Sept 30, 2006: Sony finally announces global recall of 9.6 million PC batteries. The recall and replacement would cost as much as 50 billion yen (about US$423 million). </li></ul>… but profit plunges 94 percent for July-Sept quarter
    28. 30. 1. Determines cause – battery supplier, executes costly remedial action with safety in mind. 2. Liaises with authority: Works with U.S. Consumer Product Safety Commission to announce global recall of 4.1 million laptop batteries. 3. Used website: Sets up recall website for customers to check affected units. 4. Assures safety: Guarantees replacement batteries are safe. Dell’s Response Post-mortem
    29. 31. 'Alien' substance caused Dell notebook battery to ignite <ul><li>By Julian Matthews, ZDNet Asia October 23, 2000. </li></ul><ul><li>KUALA LUMPUR – An 'alien' substance was mixed into the production process of the battery that caused a Dell customer's notebook to burst into flames and prompted a recall last week. </li></ul><ul><li>&quot;As a result of analysis, we defined the cause of the short circuit that occurred in one cell was due to mixing of an alien substance at one production process,&quot; said Yoshiyuki Arikawa, a spokesperson of battery-supplier Soft Energy Company, a unit of Japanese consumer giant Sanyo Electric Co Ltd. </li></ul><ul><li>In the e-mail response to ZDNet Asia, Arikawa did not define what the 'alien' substance could be or how it entered the production process… </li></ul><ul><li>Arikawa added, &quot;The defect rate should be very small since it’s a specific occasion and (went through) normal inspection process after. The defect is limited only to the 27,000-set lot to Dell.&quot; </li></ul><ul><li>Dell Computer recalled the 27,000 batteries with a promise to replace them free of charge…. </li></ul>
    30. 32. <ul><li>The Concept Of </li></ul><ul><li>P.E.A.R </li></ul><ul><li>In Crisis Communications </li></ul>
    31. 33. <ul><li>Safeguard P eople </li></ul><ul><li>Protect the E nvironment </li></ul><ul><li>Protect company A ssets </li></ul><ul><li>Protect company R eputation </li></ul>Response In Crisis
    32. 34. <ul><li>Dell alerts customers, warns of danger, sets up website for recall & replacement </li></ul><ul><li>Dell continues to work with safety authorities to monitor the situation </li></ul><ul><li>Dell expresses confidence in Sony and safety of its products to customers and stakeholders </li></ul><ul><li>Dell takes ownership, shows customers it cares </li></ul><ul><li>P = Safeguard PEOPLE </li></ul><ul><li>E = Protect ENVIRONMENT </li></ul><ul><li>A = Protect ASSETS </li></ul><ul><li>R = Protect </li></ul><ul><li>REPUTATION </li></ul>
    33. 35. Exercise: Determine Sony’s response based on material provided <ul><li>Divide into 3 groups </li></ul><ul><li>Read summary of report on Sony in handout provided. </li></ul><ul><li>Have a three-minute discussion with group members on order of P.E.A.R for Sony </li></ul>
    34. 36. Slippery slope of customer adulation
    35. 38. Sony execs’ bow not deep enough? “ We want to put this behind us. I take this problem seriously and I want to finish the replacement program as quickly as possible for the sake of our users and corporate customers ,” Corporate Executive Officer Yutaka Nakagawa, Oct 24, 2006
    36. 40. http://www.ideastorm.com
    37. 41. Real-time support on Twitter
    38. 42. <ul><li>Consider People, Environment, Assets, Reputation </li></ul><ul><li>Set up crisis management unit: role-play strategies for dealing with crisis scenarios involving digital media – blogging, online video, viral emails, rogue websites. </li></ul><ul><li>Act quickly, search for details, verify allegations, launch investigation </li></ul><ul><li>Assess allies, call in your experts ; notify affected parties, authorities and higher ups </li></ul><ul><li>Openly and quickly share the facts with the public online </li></ul><ul><li>Show you care, don’t over-react or take it personally </li></ul><ul><li>Accept responsibility when you are at fault </li></ul><ul><li>Prepare a statement and stand by it; when in doubt, leave out </li></ul><ul><li>Tell the truth and be confident </li></ul>Social Media Crisis Summary
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