05.Media relations and Crisis comms


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  • What are the similarities:
    Denial: BP denied, played blame game – blaming cement contractor and Transocean which is leased the rig from. Shahrizat denied involvement.
    Downplay: BP said it wasn’t that bad. Khairy said buying two condos was a good investment
  • What is a “dark site”?
    A dark site is a pre-developed, non-public Web site that can be published to the live Web in the event of a crisis.
    Why develop a dark site?
    Online, it is vital to maintain a positive and accurate perception of an organization, especially in the face of a crisis, with timely and accurate information that your constituents care about. Typically, a dark site contains pre-approved messaging and documents such news releases, pictures, official statements and other background information, as the specific details will only be added right before their release.
  • A short, concise and memorable sentence used to convey an important message during an interview.
  • Bike-lock maker Kryptonite finds out the U-shaped locks it's been making can be picked with a Bic pen. Bloggers continued to rail at the company until it finally agrees to exchange the old locks for new ones, at an estimated cost of at least US$10 million.
  • 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.
  • 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'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.'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's statement yesterday morning in Australia the computer maker was still investigating incidents where batteries in its laptops have reportedly exploded….
  • 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.
  • 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'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's problems with overheating batteries had been cropping up in the online media during the spring and summer as well. The CPSC's Stern says Sony connected the dots and figured out which of its batteries and which of its customers were affected. After The Inquirer'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. "I attribute being on top of the story to old-fashioned print journalism standards—cultivating, and, if you'll excuse the pun, not burning such contacts," 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's response from Alex Gruzen, senior vice-president of the company'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't responded to questions about the battery problems at a press conference the previous day in Sydney, Australia. "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?" asked Johnson. But most people who commented praised Dell for its response. "I commend Dell for looking out for the consumer on this issue," wrote Jim Jones. "I have been fearful of leaving my system on while unattended. It's nice that I can leave my system on overnight and not have to worry about my house catching fire." Dell credits the blogosphere for helping it get through the crisis. "Information travels around quickly," says spokeswoman Gretchen Miller. "Also, it's another channel to get the message to our customers so they can be safe."
  • 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.
  • 05.Media relations and Crisis comms

    1. 1. Module 5: Media relations and Crisis Communications 1
    2. 2. Why media relations? 1. Know and target the media 2
    3. 3. 2. One bad interview can ruin your company’s reputation 3
    4. 4. 3. You are already a brand ambassador (so you need to know how to promote your company’s agenda 24/7/365 to the media) 4
    5. 5. 4. Perception matters -- media visibility affects the bottom line 5
    6. 6. 5. Media diet has changed 6
    7. 7. 7
    8. 8. It’s not the tools or the technology, it’s the story 8
    9. 9. 1: Being transparent matters 9
    10. 10. Denials despite online evidence E D L IA N 10
    11. 11. D A IS M IO S 11
    12. 12. 2: Be ready to act fast Old pic posted as new 12
    13. 13. 3: Get ahead of a crisis KFC posts Facebook updates 13 after video goes viral
    14. 14. KFC statements Feb 7, 2012 Feb 9, 2012 Feb 8, 2012 14
    15. 15. 4: Do the right thing! 15
    16. 16. 5: Appoint professionals 16
    17. 17. Local crisis Foreign crisis “I want my life back!” 17
    18. 18. 18
    19. 19. Definitions A crisis is an event or series of events which can severely damage the reputation of an organisation. It can interrupt normal workflow and threaten the organisation’s very existence. Crisis communications is a responsible programme to minimize damage to a company’s reputation through active engagement and communications with employees, stakeholders, the public and the media 19
    20. 20. Types of crises • Financial: Bank run, hostile takeover, government-forced merger, sovereign defaults, stock crash, bubbles, currency crises • Product/service failure: Product recalls, faulty service. Firestone. • Natural disasters: Tsunami, landslides, flash floods, freak storms. • Technological crises: eg: phishing scam, skimming, systems crash, data loss, software failure, blackouts. KLSE crash. • Confrontational: Boycotts, picketing, sit-ins, strikes, blockade or occupation of buildings • Brand terrorism: product tampering, malicious rumours, corporate espionage, hacking. Tylenol. • Organizational misdeeds: Management misconduct, deception, financial fudging, stock manipulation, kickbacks. Enron, Satyam • Workplace issues: Violence, sexual harassment, discrimination • Accidents: Vehicle crash, explosions, careless handling of hazardous material, fire • Rumours: False information, fake sites, hoaxes • Corporate/legal: Lawsuits, antitrust. Microsoft. • Medical: Mass hysteria, flu outbreak, H1N1, SARS 20
    21. 21. Crisis communications re-actions POOR BETTER Decline to comment Assure – show you care, calm fears Accept and acknowledge Apologize (if you have to) and be specific ACT – fix it Deny or lie Defensive – take it personally Deflect or downplay – taichi, blame game 21
    22. 22. Best pro-active practices: Crisis communications • • • • • • Formulate a crisis communications plan Role-play crisis scenarios Update crisis plans regularly Train staff on crisis communications Meet and cultivate the media Engage and connect with online communities • Use online tracking tools to monitor and flag possible crisis situations 22
    23. 23. Opportunities in a crisis: What the media can do for you • Help spread information to the public quickly – – – – Tell your side of the story, show you care Repudiate and get ahead of the rumour mill Reassure or calm the public Reinforce alerts, warnings, cautions • Disseminate appeals for – witnesses, feedback or volunteers • Educate the public on the issue – Gain empathy for your cause – Show you are good corporate citizen with long term interest in the country 23
    24. 24. Tools for responding to media in a crisis Traditional • • • • • • • • • Holding statement Press release Fact sheet Q & A or F.A.Q. Press conference Memo or letter Advertisement One-on-one interview 24-hour hotline Social media • Light up “dark website” with hourly/daily updates • Video on YouTube • Social network update: Facebook or Twitter • Set up a blog or forum (*be prepared to monitor) • Crowd-sourced survivor lists • 5-digit SMS hotline 24
    25. 25. Holding statement: eg. Fire • Provides the media with an initial statement of facts that can be used immediately when crisis breaks • Answer the four Ws: Who, What, When, Where. Explain WHAT the incident is. Identify WHO is involved, tell WHERE and WHEN the incident occurred, explain WHAT action is being taken to respond to the incident. • Do not speculate on the How, How Much or Why if you do not know the answer yet. When in doubt leave out. • DO NOT disclose any names of dead or injured until next-of-kin is informed. (Reporters may get names from police or hospital. When you are ready to release names, appeal to media to respect the privacy of family and relatives in their time of bereavement.) 25
    26. 26. Example: Holding statement At approximately 9am today, Jan 30, 2014, a fire occurred at the bank at _____________. The local police and fire services were immediately alerted and contained the situation. Our immediate concerns are for the safety and well-being of our employees and the public and to minimize the impact to the surrounding area. We will keep you updated as more details become available. (Please check our website/blog or call the hotline_____________) 26
    27. 27. Follow-up statement • State whether fire is put out, people evacuated and surrounding community is secure. • Show empathy, regret and appropriate concern for victims, their families and those affected. State that the safety and security of your customers and employees is always your highest priority. • Name the agencies you are working with – eg. police, hospital, local council, fire department, hazmat, search and rescue, enforcement – who are responding to this incident. State whether investigations and related follow-up activities are 27 on-going.
    28. 28. Key Messages 28
    29. 29. What is a key message? • A key message is a short and succinct sentence to communicate a vital piece of information that you wish to share with the media • It is the most important thing you want the media to remember and possibly use in a story • Give no more than three messages Tip: Have a trigger word to remember it by. Run it by others. 29
    30. 30. Key messages (cont.) • Your company is perceived by what you do and what you say • Key messages enable you to steer the interview in the direction you want and gives you better control of what you say • Key messages are critical when dealing with the media -- and even your staff, customers, government, community, stakeholders 30
    31. 31. Main Message (Headline you want to see tomorrow) Message 1 • • • • Facts & Figures Elaborate Examples Repeat Message 2 • Facts & Figures • Elaborate • Examples • Repeat Message 3 • Facts & Figures • Elaborate • Examples • Repeat Tip 1: Rehearse & role play delivering key messages (but not so often that you sound robotic) Tip 2: Summarize your messages at the end of interview 31
    32. 32. Case study: DBS Asia’s Safest Bank? 32 Piyush Gupta, DBS CEO
    33. 33. DBS ATM fraud timeline Jan 4 Some customers informed the bank of unauthorised withdrawals made in Malaysia through their DBS/POSB ATM/Debit cards. Jan 5 Launches investigation. Deactivates cards, issues replacements, sets up hotline, offered 24-hr compensation,, pro-actively contacts customers with withdrawals in Malaysia. By 8pm, 200 customers reported losses of about S$1,000 per account. Jan 6 Holds press conference. Issues statement that investigation points to card skimming operation at 2 ATMs in Bugis St in Nov, ‘11. 400 customers involving S$500,000 affected. Sends SMSes to users with any new ATM transactions in Malaysia. Deployed more staff to call centre, branch. Sends team to check all ATMs for skimming devices. Jan 11 DBS CEO Piyush Gupta publicly apologizes and regrets anxiety and inconvenience to customers. But added, it could have happened to any bank. Jan 13 Two suspects arrested with skimming machine in Geylang Jan 14 New measures announced. Blocks overseas ATM transactions, sets up real-time SMS alerts for withdrawals above a certain threshold. Jan 19 More cases reported. Fully compensated all 17 affected customers 33 a total of S$23,000 within 24hrs.
    34. 34. Jan 6 press conference: Tone matters Lim Sim Seng, DBS Singapore country manager: “Half a million (dollars) against a company that makes about S$7 billion in revenue? I think we can survive.” “….alertness has definitely heightened, not just in DBS but probably in all the banks in Singapore. I think it would be foolish of them to come back to try this again." 34
    35. 35. 35
    36. 36. DBS learns to tweet • July 2010. Seven-hour service outage prevented customers from using ATMs and accessing their accounts online. DBS worked with their back-end vendor IBM to resolve the matter and resume services. 36
    37. 37. Case study: Kryptonite lock fiasco • A biker finds out from forum that his lock can be picked with a Bic pen. He posts video online. • US lock-maker Kryptonite claims users can “upgrade” but “it’s all locks not just our locks”. • Bloggers continue to rail at the company. • After 10 days, agrees to exchange old locks for new ones -- est. cost US$10m 37
    38. 38. The power of viral videos from a “unknown” blogger 38
    39. 39. Mainstream media picks up story 39
    40. 40. Source: Fortune 40
    41. 41. 41
    42. 42. Ingersoll-Rand Endures Kryptonite's US$10 Million Hit OCTOBER 25, 2004, MONTVALE, NJ -- Kryptonite delivered a $10 million hit in unanticipated costs in the third quarter to the Security and Safety division of parent company Ingersoll-Rand. Despite the setback, Ingersoll-Rand enjoyed an overall 15 percent increase in third quarter revenue to $2.4 billion. Kryptonite's financial drubbing began in early September after Internet video clips demonstrated the apparent ease in cracking its tubular locks with the shells of ballpoint pens. Kryptonite launched replacement programs for consumers and retailers, and accelerated retail delivery of new product. Those moves, however, hit the security division's operating margin. "Operating margins of 16.5 percent (in the third quarter) declined compared to 2003, reflecting approximately $10 million of estimated costs related to Kryptonite cylindrical bicycle locks," the company reported Oct. 21 in a filing with the Security and Exchange Commission. Its operating margin in 2003 for the same period was 21.2 percent. The company, founded in 1871, is organized in Bermuda with corporate offices in Montvale, New Jersey. It has about 42,000 employees worldwide and a current market capitalization of approximately $11 billion with annual sales of more than $9 billion. The company trades on the New York Stock Exchange 42 under the symbol IR.
    43. 43. Lock and ‘keys’ offer on “Like new, this Master Lock is perfect for temporarily attaching your bike or scooter to a pole or bike rack. This temporary attachment is very handy if your bike does not have a proper kick-stand. “It's sturdy steel design and black color are intimidating for thieves who don't have a way to open it. “Comes with two keys. Keep one with you, and the other safe at home in your desk drawer.” 43
    44. 44. Lessons: Kryptonite • In a social media age, every customer has the power to affect your brand, product, service in a profound way • Social media is growing and influential and you cannot disregard it anymore • Be ready to update users via website, Facebook, Twitter, blog or forums quickly • False “Our (enter product/service here) are safe” statements will not hold water • Kryptonite after claiming ignorance for the longest time starts own blog - one and half years later 44
    45. 45. 45
    46. 46. Good news, get it out fast Bad news, get it out faster! 46
    47. 47. Dell to recall 4m laptop batteries CNET News.com,August 14, 2006 Dell and the U.S. Consumer Product Safety Commission plan to recall 4.1 million notebook batteries on Tuesday, a company representative confirmed. 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. This looks like the largest battery recall in the history of the electronics industry, said Roger Kay, an analyst with Endpoint Technologies Associates. "The scale of it is phenomenal." 47
    48. 48. Sony delays response, crisis lingers in public eye… • Aug 15, 06: Dell recalls 4.1m batteries • Aug 24, 06: Apple recalls 1.8m batteries • Sept 15, 06: Virgin Atlantic, Qantas and Korean Air ban use of Dell and Apple laptops on board its planes, unless the battery removed • Sept 28, 06:Lenovo/IBM: 526,000 batteries • Sept 29, 06:Dell increases recall to 4.2m • Sept 29, 06:Toshiba recalls 830,000 batteries 48
    49. 49. Crisis escalates and spreads online 49
    50. 50. Sony finally responds… 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)…. …but profit plunges 94 percent for July-Sept quarter 50
    51. 51. Dell’s Response • Determines cause – battery supplier, executes costly remedial action with safety in mind. • Liaises with authority: Works with U.S. Consumer Product Safety Commission to announce global recall of 4.1 million laptop batteries. • Used website: Sets up recall website for customers to check affected units. • Assures safety: Guarantees replacement batteries are safe. 51
    52. 52. 'Alien' substance caused Dell notebook battery to ignite By Julian Matthews, ZDNet Asia October 23, 2000. 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. "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," said Yoshiyuki Arikawa, a spokesperson of battery-supplier Soft Energy Company, a unit of Japanese consumer giant Sanyo Electric Co Ltd. 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… Arikawa added, "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." Dell Computer recalled the 27,000 batteries with a promise to replace them free of charge…. 52
    53. 53. 53
    54. 54. 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 54
    55. 55. 55
    56. 56. Social Media Listening Command Center 56
    57. 57. The Concept Of P.E.A.R In Crisis Communications 57
    58. 58. Response In Crisis  Safeguard People  Protect the Environment Assets  Protect company’s Reputation  Protect company’s 58
    59. 59. • Dell alerts customers, warns of danger, sets up website for recall & replacement • P = Safeguard PEOPLE • Dell continues to work with safety authorities to monitor the situation • E = Protect ENVIRONMENT • Dell expresses confidence in Sony and safety of its products to customers and stakeholders • A = Protect ASSETS • Dell takes ownership, shows customers it cares • R = Protect REPUTATION 59
    60. 60. Being pro-active http://www.ideastorm.com http://mystarbucksidea.force.com/ 60
    61. 61. Real-time support on Twitter 61
    62. 62. @MaxisListens: One-to-one customer complaint resolution 62
    63. 63. Crisis Communications Summary  Consider People, Environment, Assets, Reputation • Act quickly, search for details, verify allegations, launch investigation • Assess allies, call in your experts; notify affected parties, authorities and higher ups • Quickly share available facts with the public • Show you care, don’t over-react or take it personally • Accept responsibility when you are at fault • Prepare a statement and stand by it; when in doubt, leave out • Tell the truth and be confident • Simulate crisis: role-play strategies for dealing with crisis scenarios involving digital media – blogging, social networks, online video, viral emails, rogue websites 63