TEPCO by the Numbers


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A brief look at how B2Bs fail to adequately explain numbers and terms during crises, using TEPCO as a starting point.

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  • When we look at the TEPCO Fukushima Dai-ichi crisis we can say a lot about how it erred. It’s easy. In fact, much of it is standard boilerplate talking points for crisis communications and media relations consultants – stuff that you can find just by googling “crisis communications”. What I would like to do, is share some thoughts about one aspect of the crisis that I noticed and saw parallels to other crisis, and, perhaps, you will came away this morning with something besides a nice breakfast.
  • Allow me to explain.
  • A key step is first putting the numbers into context. If your audience does not understand the numbers or disagrees with their meaning, there’ll be slim chance of explaining how to improve them. In addition, if you do not put the numbers in context, someone else will, and they are under no obligation to do it in a way you would consider fair.
  • While there is a common language between IR people and their audiences, crisis often put B2B companies into direct communication with consumers about highly technical and often controversial issues.
  • Let’s look at some numbers the I will talk about today.
  • Let’s look at how numbers can shape how we view the event. This looks like an unprecedented event, or, at least, an extremely rare one.
  • In the second context, the event has not only historical precedence, but also seems LIKELY and grossly irresponsible. Even though earthquakes are not predictable, you are looking at a very long window compared to what has happened in the past. And note that the highest tsunami ever recorded did not occur March 11, but in 1896. source: http://www.japanfocus.org/-Gregory-Smits/35313
  • We are easily overwhelmed by numbers. Even if you could do the math required to answer these questions easily, it is difficult to imagine what those numbers look like – 31,709 years? What does that look like? It’s about 1.5 Ice Ages (You remember, back when Australia, Tasmania and New Guinea were one land mass?) My point is that while numbers are important, we have to put them into a manageable context before anyone is going to be able to understand what the numbers MEAN. And I just did that in the example above. 31,709 years makes no sense to anyone in this room, but now we have a better idea because we all can get an idea of just how long it is – 1.5 Ice Ages
  • Source: http://www.yomiuri.co.jp/dy/national/T110528002597.htm
  • Now recently Olympic Swimming Pool (OSP) has become more commonplace in the news coverage, but that is from the news media efforts, not TEPCO’s. We can imagine what 100 OSPs looks like. We know what an OSP is and can imagine its size. It helps us to gauge the scale of the problem. Many stories that have come out of Fukushima talk about water in tons. Only an engineer talks about water in tons. And just as an aside, a sydharb is a Sydney Harbor – for those wondering – this is something that the residents of Sydney would get, and from the reactions in the room, know that many of your are familiar with the harbour. Source: http://online.wsj.com/article/SB10001424052748703922504576273930625967622.html : http://en.wikipedia.org/wiki/List_of_unusual_units_of_measurement#Olympic-size_swimming_pool
  • http://online.wsj.com/article/SB10001424052702304906004576371300261616120.html
  • http://www.tepco.co.jp/en/press/corp-com/release/11031704-e.html
  • Usually plant workers are exposed to these levels only for short periods of time. So it may be 100 mSv per hour dosage, but the person is exposed for 15 minutes, say….but again we don’t know and TEPCO isn’t saying. And to make this even more complicated, this is what one expert told the BBC and there is still a lot of debate regarding radiation dosage. http://www.bbc.co.uk/news/health-12722435
  • The apology that is offered is something that should have been put for on March 12. Besides that, there is no effort to explain why and how it is different, though only 15% (so far) of the total radiation. TEPCO doesn’t try to separate itself from Chernobyl by emphasizing the release of radiation vs. plutonium explosion. Probably the government had a lot to say about this release, but still my point is that TEPCO tends to simply put out statements without much effort to place them into any context. Granted you are fairly far down the fail food chain if you are trying to differentiate yourself from an accident that occurred in the decaying Soviet Union, but TEPCO doesn’t even try…and never mind that this is from the company president who checked into a hospital during the first week of the crisis.
  • TEPCO didn’t do this. This is the NYT. At least there is some context, though it is done with fear first and then explanation second. At least the Times tried to put it in context, though I’d like to know what the probability is for eating two pounds of washed broccoli. Of course, you need a 3rd party – you can’t say it yourself – so find one. And this story ran after many had already run about the dangers of radioactive broccoli. http://www.nytimes.com/interactive/2011/04/02/world/asia/assessing-the-radiation-danger.html?ref=asia
  • http://www.marinos.com.gr/Crisismgt/Crisis%20Management.pdf the was the dawn of the Internet era, many buying first PCs, don’t understand machine or the numbers, and Intel didn’t really help them.
  • Jibberjabber, jibberjabber: Remember, people are confused by big numbers. These are vague, technical explanations and even the 1:9B statement means little. Many consumers probably thought they did 9B calculations regularly. http://www.nytimes.com/1994/11/24/business/company-news-flaw-undermines-accuracy-of-pentium-chips.html?scp=5&sq=pentium%20floating%20point%20error&st=nyt&pagewanted=1 http://www.nytimes.com/1994/12/02/business/company-news-computer-stocks-tumble-over-chip-flaw.html?scp=4&sq=pentium+floating+point+error&st=nyt
  • Being slow to explain and define the problem context, it was blindsided by an anxious business partner/competitor. Finally began trying to put it in understandable terms, but by then customer/competitor IBM had decided that it had enough and wouldn’t stand by Intel on this. Would Intel have faired better with the problem if it had presented this number sooner? By being slow to put the problem into understandable terms, it let itself open to broadsides and blindsides. Sources:The Crisis Manager: Facing Risk and Responsibility, Otto Lerbinger, 1997 http://www.emery.com/1e/pentium.htm
  • http://www.nytimes.com/1994/12/27/science/personal-computers-from-a-tiny-flaw-a-major-lesson.html?scp=2&sq=pentium+floating+point+error&st=nyt
  • BP did the same thing, underestimate the disaster. It is better to come in high on your estimate and then come back. If you come in low and then scale up, people assume that you were lying or covering up…because well it has happened.
  • But we know audiences get lost in large numbers. so...Now, there’s more to the spill than that, of course, but does this give you a different view of the disaster? Source: http://www.popularmechanics.com/science/energy/coal-oil-gas/bp-oil-spill-statistics http:// en.wikipedia.org/wiki/Gulf_of_Mexico
  • source:http://www.newyorker.com/reporting/2011/03/14/110314fa_fact_khatchadourian One year after the crisis began, NYR describes it this way… So in the Tokyo Dome, it would be one can of beer. Now then, if you happen to be sitting near that can of beer when it is shaken and then opened and you are rightly very angry. Or if it is spilled within a key electrical control, but this gives perspective. It was serious to those affected.
  • A couple of numbers. The first one was positive, but largely unknown….The second one was well known and just overwhelmed the first number. AIDS is like radiation in that it gets people’s attention and they remember it. If most people knew anything about Botswana, it was the second number. source:http://en.wikipedia.org/wiki/Demographics_of_Botswana
  • This allowed me to talk about the solution that was supported with diamond revenue and contrast Botswana’s leadership in the fight against AIDS is Southern Africa as opposed to some of its slower responding neighbors. Granted, this is not a happy ending -- the number is still high -- but it shows progress. And at the same time, Botswana has stepped up the ranks as a tourism destinations. So in the end, this may not be win, but in disasters and crisis your goal may be to simply stay in the game; keep the score down. Lastly, let me emphasize, that my role was small, microsievert-like, in the overall effort which was led by Festus Mogae, who was then president of Botswana. source http://www.avert.org/aids-botswana.htm
  • http://www.tepco.co.jp/en/challenge/index-e.html If you go to TEPCO’s site now, there are a lot of links explaining the reactor design, radiation. English, Korean, Chinese, but really this is a bit late. Once the public and the press has hold of the story initially it is very difficult to change that impression. As we see with Intel, the numbers are always there, but aren’t really put forward until the public has already gripped upon the initial story and accepted the numbers in a different context.
  • Let’s be clear about Fukushima Dai-ichi. It is a disaster. There’s no getting around that. 3 for 3 on meltdowns – now that’s a number -- but some of the numbers it has communicated have a complete lack of context that is now being shaped by opponents.
  • Let’s be clear about Fukushima Dai-ichi. It is a disaster. There’s no getting around that. 3 for 3 on meltdowns, but some of the numbers it has communicated have a complete lack of context that is now being shaped by opponents, such as Greenpeace.
  • TEPCO by the Numbers

    1. 1. TEPCO by the Numbers Gil Chavez Professor, Globis Univ. IMBA BC Consulting www.consult-bc.com
    2. 2. The numbers are the numbers <ul><li>Crisis Communications and Investor Relations (IR) both involve messages and numbers. </li></ul><ul><li>Crisis Communications tends to focus on messages more than the numbers. </li></ul><ul><li>That is a mistake . </li></ul>
    3. 3. The numbers are the numbers <ul><li>In crisis communication this should be vital early step: </li></ul><ul><li>Place the numbers in context </li></ul><ul><ul><ul><li>-- Make them understandable </li></ul></ul></ul><ul><li>If not, someone else will… </li></ul><ul><ul><li>and it may not be fair or accurate. </li></ul></ul>
    4. 4. The numbers are the numbers <ul><li>Why is this a crisis communication problem? </li></ul><ul><ul><li>Investor relations has accounting rules and regulations. </li></ul></ul><ul><ul><li>Audience agreement on numbers’ meaning. </li></ul></ul><ul><ul><li>Crisis numbers often have wider scope of interpretation, even in heavily regulated industries. </li></ul></ul><ul><ul><li>Audiences extend beyond experts. </li></ul></ul><ul><ul><li>Issues open to greater debate. </li></ul></ul>
    5. 5. TEPCO by the Numbers <ul><li>Let’s look at today’s numbers </li></ul>
    6. 6. The numbers are the numbers <ul><ul><li>Fukushima Dai-ichi 2011: </li></ul></ul><ul><ul><ul><li>9.0 earthquake; 15 meter high tsunami </li></ul></ul></ul><ul><ul><ul><li>250,000 tons of radiation-tainted water </li></ul></ul></ul><ul><ul><ul><li>exposure of 100 mSv </li></ul></ul></ul><ul><ul><li>BP Gulf Oil Spill 2010 </li></ul></ul><ul><ul><ul><li>4.9 million barrels of oil </li></ul></ul></ul><ul><ul><li>Intel Pentium Chip 1994 </li></ul></ul><ul><ul><ul><li>Error once every 9 billion calculations </li></ul></ul></ul><ul><ul><li>Botswana 2002 </li></ul></ul><ul><ul><ul><li>38.8% of adult population AIDS/HIV positive </li></ul></ul></ul>
    7. 7. TEPCO by the Numbers <ul><li>How numbers define events </li></ul>
    8. 8. TEPCO by the Numbers: An unprecedented event? <ul><li>1 st Context – </li></ul><ul><li>Fukushima Dai-ichi: </li></ul><ul><ul><li>9.0 earthquake </li></ul></ul><ul><ul><li>4th strongest ever </li></ul></ul><ul><ul><li>Tsunami up to 38 meters high in some areas </li></ul></ul><ul><ul><li>15 meter tsunami at the plant </li></ul></ul><ul><li>Once in 200 years occurrence, right? </li></ul>
    9. 9. TEPCO by the Numbers: Context is king <ul><li>2nd. Context – Fukushima Dai-ichi </li></ul><ul><ul><li>4 powerful Sanriku tsunami in 140 years </li></ul></ul><ul><ul><li>1793, 1856, 1896 (record height), 1933 </li></ul></ul><ul><ul><li>March 11 was 5th event in 218 years = Every 43.6 years </li></ul></ul><ul><ul><li>Dai-ichi completed 1971, lifespan 50 years </li></ul></ul><ul><ul><li>Sea wall 5.7 meters </li></ul></ul><ul><ul><li>The bet was that there would be no major tsunami from 1933 through 2021, nearly 90 years. </li></ul></ul>
    10. 10. TEPCO by the Numbers <ul><li>Audiences get lost in large numbers </li></ul>
    11. 11. Lost in numbers <ul><li>If your heart beats 60 times a minute, how long will it take to beat </li></ul><ul><ul><li>1,000 times? </li></ul></ul><ul><ul><li>XX </li></ul></ul><ul><ul><li>1 million times? (1,000,000) </li></ul></ul><ul><ul><li>XX </li></ul></ul><ul><ul><li>1 billion times? (1,000,000,000) </li></ul></ul><ul><ul><li>XX </li></ul></ul><ul><ul><li>1 trillion times? (1,000,000,000,000) </li></ul></ul><ul><ul><li>XX </li></ul></ul>
    12. 12. Lost in numbers <ul><li>If your heart beats 60 times a minute, how long will it take to beat </li></ul><ul><ul><li>1,000 times? </li></ul></ul><ul><ul><li>Just under 17 minutes (16.67 mins) </li></ul></ul><ul><ul><li>1 million times? (1,000,000) </li></ul></ul><ul><ul><li>About 11.5 days (277.78 hours) </li></ul></ul><ul><ul><li>1 billion times? (1,000,000,000) </li></ul></ul><ul><ul><li>About 31.7 years (11,574 days) </li></ul></ul><ul><ul><li>1 trillion times? (1,000,000,000,000) </li></ul></ul><ul><ul><li>About 31,709 years (Last Ice Age peaked 20,000 years ago – 1.5 Ice Ages) </li></ul></ul>
    13. 13. TEPCO by the Numbers <ul><li>Audiences get lost in technical terms. </li></ul>
    14. 14. TEPCO: Water by the ton <ul><li>“ I went to the store for a kilo of milk…” </li></ul><ul><li>May 29, 2011 Yomiuri Shimbun </li></ul><ul><li>“ It will cost about 53.1 billion yen to decontaminate 250,000 tons of radiation-tainted water….” </li></ul><ul><li>How much water is that? </li></ul>
    15. 15. TEPCO: Water by the ton <ul><li>250,000 tons of water = 100 Olympic Swimming Pools </li></ul><ul><li>Olympic swimming pool (OSP): 2,500 metric tons of water </li></ul><ul><li>OSP = 1/200,000 sydharb (Sydney Harbour) </li></ul>
    16. 16. TEPCO by the Numbers <ul><li>Combined numbers and terms </li></ul>
    17. 17. Sievert (Sv), a measure of radiation: Millisieverts vs. Microsieverts <ul><li>Which is more and by how much? </li></ul><ul><ul><li>Millisievert: 1 mSv = 0.001 Sv (1/1,000) </li></ul></ul><ul><ul><li>Microsievert: 1 μSv = 0.000001 Sv (1/1,000,000) </li></ul></ul>
    18. 18. Millisieverts <ul><li>Press Release: </li></ul><ul><li>Status of Fukushima Daiichi Nuclear Power Station </li></ul><ul><li>(as of 9:00 am Mar 17 th , 2001) </li></ul><ul><li>“ The radiation exposure of 1 TEPCO employee, who was working inside the reactor building, exceeded 100mSv and was transported to the hospital….” </li></ul>
    19. 19. Millisierverts <ul><li>Which means what? </li></ul><ul><li>Estimates measured annually or hourly: </li></ul><ul><li>9 mSv per year: Air crew on NYC – TOK polar route </li></ul><ul><li>100 mSv per year: Lowest level related to long-term, but extremely low, cancer risk </li></ul><ul><li>800 mSv per hour likely to cause radiation sickness; </li></ul><ul><li>may increase risk of cancer by 2 to 4 percent. </li></ul>
    20. 20. TEPCO Press Release (Apr 12, 2011) Fukushima and Chernobyl both Level 7 Nuclear Events <ul><li>Level 7 Rating for the Incident at Fukushima Daiichi </li></ul><ul><li>“ We recognize that the problems at Fukushima Daiichi Nuclear Power Station due to Tohoku-Chihou-Taiheiyou-Oki Earthquake have led the government to assign provisionally level 7 on INES (International Nuclear Event Scale). We deeply apologize for the public's distress and inconvenience at the surrounding areas of the power station, Fukushima Prefecture, and broader society. In order to resolve the situation as soon as possible, we will proceed to cool the reactors and to prevent the diffusion of radioactive materials. In addition, we are considering various countermeasures and their processes. Cooperatively working with the national and local governments, we will concentrate all our resources to resolve this difficult situation.” Masataka Shimizu President The Tokyo Electric Power Company, Incorporated </li></ul>
    21. 21. TEPCO by the Numbers <ul><li>If you don’t define it, someone else will. </li></ul>
    22. 22. New York Times: Fear sells <ul><li>“ Radioactive cesium was detected in broccoli in Fukushima Prefecture well above the country's limit .” </li></ul><ul><li>First reaction? That’s scary. </li></ul><ul><li>“ The estimated increase in cancer risk of eating two unwashed pounds is about two chances in a million.” </li></ul><ul><li>Second reaction? </li></ul>
    23. 23. TEPCO by the Numbers <ul><li>Other crises </li></ul>
    24. 24. Intel Pentium crisis 1994 <ul><li>What did Intel initially do? </li></ul><ul><li>Sept – Nov. </li></ul><ul><ul><li>Insist error was insignificant </li></ul></ul><ul><ul><li>Offer consumers a white paper </li></ul></ul><ul><ul><li>Chip replaced only after close questioning </li></ul></ul>
    25. 25. Intel Pentium crisis 1994 <ul><ul><li>Late Nov/Dec describes error occurring: </li></ul></ul><ul><ul><li>“ in certain types of division problems involving more than five significant digits … that can include numbers before and after a decimal point.” </li></ul></ul><ul><ul><li>“ in complex mathematical calculations and will not affect most computer users” </li></ul></ul><ul><ul><li>Occurs 1 in 9 billion calculations </li></ul></ul>
    26. 26. Intel Pentium crisis <ul><li>Mid-Dec Intel says: </li></ul><ul><ul><li>Error 1 in 9 billion calculations </li></ul></ul><ul><ul><li>Or once every 27,000 years </li></ul></ul><ul><ul><ul><li>-- could say “nearly 1.5 Ice Ages” </li></ul></ul></ul><ul><li>Too late, IBM refuses to ship Pentium PCs: </li></ul><ul><ul><li>Says the error happened more frequently </li></ul></ul><ul><ul><li>Every 24 days…. </li></ul></ul>
    27. 27. Intel Pentium crisis 1994 <ul><li>After crisis passes: New York Times </li></ul><ul><li>“ If … the Pentium chip were magnified to the size of New York City's road, train and subway systems, the flaw would be the equivalent of a few misdirected traffic lanes in the Bronx. Most New Yorkers do not drive in the Bronx, but for those who do, the error is important. ” </li></ul><ul><li>Reader: “But if I were to drive in the Bronx….” </li></ul>
    28. 28. BP oil spill 2010 <ul><li>Initially underestimated size of spill </li></ul><ul><li>Final total -- </li></ul><ul><li>4.9 million barrels of oil </li></ul><ul><li>(a large number and an unfamiliar term) </li></ul><ul><li>And that means….? </li></ul>
    29. 29. BP oil spill 2010 <ul><li>312 Olympic Swimming Pools (206 million gallons) </li></ul><ul><li>That’s a lot. </li></ul><ul><li>And this is a lot more: </li></ul><ul><ul><li>Gulf of Mexico total volume: 660 quadrillion (15 zeros) gallons </li></ul></ul><ul><ul><li>Roughly a 1:1 billion ratio </li></ul></ul>
    30. 30. BP oil spill 2010 <ul><li>“ If the Gulf of Mexico were the Superdome, the total spill would be three cans of beer inside.” </li></ul><ul><li>In Tokyo terms: 1 can of beer inside the Tokyo Dome </li></ul><ul><ul><li>( 1 Superdome = 3 Tokyo Domes) </li></ul></ul>
    31. 31. Botswana AIDS rate 2002 <ul><li>Objective: Promote tourism and diamonds </li></ul><ul><li>What I wanted to say: </li></ul><ul><li>“ Produces 1/3 of gem quality diamonds in world.” </li></ul><ul><li>What I had to say: </li></ul><ul><li>“ World’s highest AIDS/HIV rate: 38.8 percent adult population.” </li></ul>
    32. 32. Botswana AIDS rate 2002 <ul><li>How I said it with context: </li></ul><ul><li>“ 38.8 percent is the highest documented rate in the world.” </li></ul><ul><li>Why? </li></ul><ul><ul><li>Botswana’s huge counter-program </li></ul></ul><ul><ul><li>Neighbors had no counter-programs </li></ul></ul><ul><ul><li>Diamond revenue main resource in fight </li></ul></ul><ul><li>2009 </li></ul><ul><ul><li>24.8 percent in 2009 </li></ul></ul><ul><ul><li>On the map as a tourist destination </li></ul></ul>
    33. 33. Conclusions: “Crises force B2B’s to speak directly to consumers.” <ul><li>Once the story is shaped, it is difficult to transform </li></ul><ul><li>Focus on the numbers BEFORE the crisis. </li></ul><ul><li>Put them into understandable terms. </li></ul><ul><li>Place them in context. </li></ul>
    34. 34. Conclusions: “Crises force B2B’s to speak directly to consumers.” <ul><li>Think like a non-expert. </li></ul><ul><li>What does the number/term mean? </li></ul><ul><li>How can it be related to people’s daily lives? </li></ul><ul><li>Get outside the box -- ask for outside review. </li></ul>
    35. 35. TEPCO by the Numbers <ul><li>Thank you </li></ul>