“Crisis Communicationsin a Social Media World”

Gil Chavez

Professor - Globis University IMBA, International University of Japan (IUJ)BC Consulting

BC Consultingwww.consult-bc.com

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AgendaThe 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

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The BasicsCrisis Communications 101

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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 events1. TEPCO2. JSA – “Yaocho”3. Toyota

Food mislabeling1. Ebisu Yakiniku2. Meat Hope3. Semba Kitcho4. 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

1. Anticipate & assess risk.

2. Create a Response team.

3. Appoint a Spokesperson.

4. Train the Response team, Spokesperson, and the whole organization.

Deal with a Crisis Before it Happens5. 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-ShuzoContaminated 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

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)

“Look for the 2nd, or 3rd explosion…”

Damage Assessment II Start with Worst Case and Work Backwards

1. Identify the worst reasonable outcome at first2. 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?

MessagingThe 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 Concerns1. 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 TermsCrisis Communications 101

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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 PoolsOlympic swimming pool (OSP): 2,500 metric tons of waterOSP = 1/200,000 sydharb (Sydney Harbour)

MillisievertsPress 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

route100 mSv per year: Lowest level related to

long-term, but extremely low, cancer risk800 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 2010312 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

• 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.

“A crisis forces your organization to speak directly people who have no idea about your business.”

Thank you.How to Find me:

Twitter:@gilchavezEmail: gil@consult-bc.comBiz site: consult-bc.comPersonal site: gilchavez.com

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