Who Is that Vietnamese guy?

Nguyen Thanh Son, GD of T&A Ogilvy and

Ogilvy PR
Part of Ogilvy Group including Ogilvy & Mather,
Ogilvy One and Ogilvy Action
Used to work at Vietnamese News Agency,
Vietnam Chamber of Commerce and Industry
and Oklahoma Department of Commerce
Started T&A Communications in 1995, now
has 67 communications consultants working
for 30 international and leading Vietnamese
brands
Client portfolio including Amway, APC, Boeing,
Canon, Cartier, GE, Kimberly Clark, Masan
Group, Nestle, Standard Chartered Bank,Tan
Hiep Phat, TD Group, Temasek Holdings, Visa..
Lecturer at Hanoi National University and
guest lecturer at Kyoto University, Sophia
University and Yonsei University

What is a Crisis?

A crisis is an event of a nature or magnitude that has the potential of negatively

affecting the reputation of the company.

Crisis = Pressure
Opinion
leaders

Media

NGOs

Your boss

Victims & their

families

Trade

Consumers

Staff

Sales force

Government

You cannot always control what might happen

to you, but you can control how you deal with
it. and, in the end, thats what matters
Kurt

P. Stocker

Northwes

Where does a Crisis Begin?

INTERNAL

EXTERNAL

Environmental Issue/Accident

Natural Catastrophe

Investigation/Lawsuit/Fine/Settlement

Terrorist/Criminal Threat/Incident

Poor Financials/Stock Performance

Activist Issue/Protest

Structure/Ownership Issue (M&A, etc.)

Management Change/Dismissal
Incident/Allegation of Mismanagement
Incident/Allegation of Wrongdoing
Consumer Complaint/Issue
Product Defect/Recall
Employee Complaint/Issue
Labor Dispute
Workplace Injury/Fatality

Of the 15 major crisis

categories, only 3 have
predominantly external
triggers.
More than 75% of all
corporate crises are
triggered from within.

How does a Crisis Begin?

On average, 69-percent
of all crises are the type
that start out small and
may take days, weeks or
even months before they
get out of control and
draw public attention...
--Institute for Crisis Management

The Melamine Crisis: Sanlu Milk Scandal

Sanlu milk scandal first broke out in September 2008, it over-turned
Chinas dairy industry.
Milk powder products produced by many leading manufacturers were
found to contain different levels of melamine.
According to reported figures, about 54,000 infants and toddlers suffered
from kidney stones, with six confirmed death.

Sanlu Milk Scandal

Early March

The first suspected case appeared in Nanjing.

Mid-March

Sanlu received consumer complaints, but the company claimed

their products have no quality problems.

June

The official website of AQSIQ put out consumer complaints

about toxic milk powder issue, but these were later deleted.

June to Sept.

More cases appeared nationwide. Sanlu products were tested

by a local regulatory agency. In August, Sanlu began unofficially
recalling their products.

Sanlu Milk Scandal

The Sanlu milk powder incident was exposed by Xinhua net, but
the company responded that their products had no quality problems.
That
night,
the
Ministry
of
Health
announc
Sanlu milk powder was
contaminated with melamine which could cause kidney
stones. Sanlu
issued a statement, officially recalling its products.
Sept 11

Sept 12

The Dairy Association of China said that melamine may come from
the
packaging
material.
Also,
infants
who
didn
drink enough water could also suffer from kidney stones.
headed

by

Health started an

The
Inspection
team
investigation into baby milk powder.

Jia

that they knew

The
local
government
of
Shi
about the toxic milk powder issue in early August.

Sept 13

the

Ministry

Zhuang

admitt

The State Council issued 6 decisions, activating the nationwide food

safety emergency response system.

Sanlu Milk Scandal

Sept.1419suspectswereputintodetentioninHebeiprovince,allwere

operatorsoflocalpasturesandmilkcollectionpoints.

the

so,they

TheNewZealandgovernmentclaimedthatSanlusforeignpartnerreported
toxicmilkpowderissuetoSanluandthelocalgovernmentinearlyAugust,requesting
thatallproductsberecalled.Afterfailingtogetaresponseforamonthor
reportedtheissuedirectlyto thecentralgovernment.

Sept.15 Sanluapologizedtothevictimsandtheirfamilieswhile

continuingtoaccusedairyfarmers.

Sept.16 ThePresidentofSanluandtheViceMayorofShiJiaZhuangwere

dismissedfromtheirpositions.AQSIQannouncedthatmilkpowder
products
producedby22manufacturerswerefoundtocontaindifferentlevelsof
melamine.
BrandnameslikeMengNiuandYiliwerenamedwithSanluproducts
havingthe

highestpercentageofmelamine.

Sanlu Milk Scandal

Jan, 2009

Relevant government agencies issued an united notice, confirming

compensation and medical treatment for the victims.
Two people were sentenced to death. Former board chairwoman of Sanlu
Group was sentenced to life imprisonment and was also fined rmb24.7m.

Feb

Sanlu Group was ordered bankrupt by the local court.

March

Beijing-based dairy producer Sanyuan won the bid of Sanlu with the
price of rmb 616.5m.

June

New food safety law went effective.

August

According to media coverage, the local government of Shi Jia Zhuang

submitted a post-crisis report of the Sanlu incident to the
government, but didnt release it to general public.

provincial

Sanlu:

Care

Local

Gov:
Central Gov:

Sanlu

Comm.

Local

Gov:
Central Gov:

From the beginning through to the end, Sanlu never put consumers first, showing no
concern. They were forced to make a formal apology, which was not accepted by the
general pu
Held the same attitude as Sanlu towards the victims.
Ordered special measures, in terms of medical treatment, compensation and subsidies or dairy
farmers be taken immediately after the incident.

Before exposure of the incident, the company tried to hide the truth. After exposure,
Sanlu did not want to take responsibility.
Acted as the spokesperson for Sanlu.
Immediately established an external information dissemination mechanism,
sending updates on the latest developments, uncovering the problems existing in
Sanlu, as well as the whole industry.

Sanlu:

Control

Local

Gov:

Central

Gov:

Tried to muscle its government relations, manipulate media, stall consumers

and thus lost control over the incident.
Reached an agreement with Sanlu; failed to fullfil its management and
supervision responsibility.
Relevant government bodies got involved and took immediate measures to help rebuild
confidence in the dairy industry and protect the governments image.

The Cost of Not Planning

Share prices of
companies that
mishandle a crisis
one year later
-15%

+7%

Share prices of
companies that
handle a crisis well
one year later
Source: The Impact of Catastrophes on Shareholder Value: A Research Report
Sponsored by Sedgwick Group (The Oxford Executive Research Briefings,
Templeton College, Oxford, 1997)

Timeless Characteristics of a Crisis

Surprise
Insufficient information
Escalating flow of events
Loss of control
Intense scrutiny from outside
Siege mentality
Panic
Short Term Focus

So whats different now?

The Essence of a Crisis

But you WILL
be blogged
even if you
keep silent, or
ESPECIALLY if
you keep
silent

Everyone is a Journalist Now

When everyone has a blog,

a MySpace page or
Facebook entry, everyone is
a publisher. When everyone
has a cellphone with a
camera in it, everyone is a
paparazzo. When everyone
can upload video on
YouTube, everyone is
filmmaker.

Dominos Pizza
Social Media Crisis Management
Dominos quickly responded with channel
appropriate tactics and tone.
Multi-tiered social media response
featured swift action, executive apology
and employee support.
Apology on its website & employees
with Twitter accounts tweet links to it
Created its own Twitter account,
@dpzinfo, to reassure consumers
that this was an isolated incident
Domino's U.S.A. president issued
an apology on YouTube, viewed
595,000 times

The Responsibility Scale: from Victim to Perpetrator

Victim

Natural Disasters
False Rumors
Workplace violence

Accidents

Product Tampering
Equipment & Tech failure
Human error industrial accident

Preventable

Human error harmful product

Organizational misdeeds

Source:Crisis Management & Communications by Coombs 2007

A crisis is unpredictable but not unexpected

- Timothy Combs -

Threat + Opportunity

The Brandshield Crisis Stages

Prevent

Contain

Grow

The Road to Redemption

1. Prepare & try to prevent issues from escalating
2. Recognize early signs (smoldering) with active
monitoring including social media
3. Define the real problem rather than the technical
one
4. Containment: act fast; act decisively
5. Continuous communication to all stakeholders
striking the right tone
6. Show the new road ahead: new rules, procedures,
prevention strategy

Crisis Management

Preparedness
There are crises that cannot be avoided, such as a natural disaster
or unfounded rumours on the internet. However, a crisis
communication plan can be important in several areas:
Help identify high risk areas -- via Risk Assessment Audit & Brand
Audit
Guide crisis team on what to do, whom to notify, how to reach
people, what to say -- via the compilation of a Crisis Management
Manual
Equip crisis team with necessary skills -- via Crisis Simulation
Training and Media Training

Handling
Crisis handling refers to the effort to limit the duration of the crisis or
stop it from reaching other areas of the organisation. Effective crisis
management includes crisis communications that not only can
alleviate the crisis, but can sometimes bring the organisation a
more positive reputation than before the crisis developed.
In a crisis when most people are in a state of panic, a tailor-made
Crisis Management Manual is an important tool for effective crisis
management as it guides the crisis team on its actions and
communications. The capability to communicate, and to monitor,
are equally important.

Recovery
Recovery refers to putting the business back on track. How people
see the crisis handled is very important in this phase and therefore
opinion tracking is useful. The ability to develop and analyse a
database during the crisis period is also useful as they are the ones
who expressed concern and so they should be addressed
separately in the recovery phase.
Most crises obviously have a negative impact on the product and
the corporation. Therefore, it is important to revisit the brand values
and address problems from specific target groups point of view.

3 phases of crisis management

Crisis Preparedness

Crisis Handling

Recovery

1.Set up a crisis management

group that can coordinate closely
2.Develop media and influencer
databases, e-mail lists and
newsgroup list
3.Develop an offline crisisoriented information website
4.Refer to this crisis handbook for
reminders
5.Prepare and practice in advance
6.Brief all employees about
communications process -notification, referral of calls, etc.

1.Release only corroborated

facts and pre-approved
information. Dont speculate
2.Cooperate and assist wherever
and whenever possible
3.Determine the strategy, then
the message
4.Contact all interested
audiences: customers, analysts,
investors, employees, tech
community
5.Track message penetration
with regular research
6.Show care

1.Remember; Its not over until its

over -- reiterate key messages
2.Build on influencer and customer
equity
3.Revisit brand values
4.Monitor and evaluate both the
changing climate of opinion and own
actions

3 Dimensions

Rational Facts
A crisis is often accompanied with a lot of speculation and incorrect
reports. Therefore, the ability to communicate key facts: is
important in the sense of taking control and containing the situation.
From a public relations point of view, these rational facts form part
of the key messages and the facts will be updated as the situation
progresses.

Emotional Value of The Brand

Every brand and corporation has its unique brand equities and
when a reputation is at stake, it is vitally important for us to uphold
its values; through what we do and what we say.
Demonstrate care is the absolute priority in crisis communication.
However, there is more to do when it comes to upholding brand
values. One example was when Felix Cat Food had product
manufacturing problems. The company decided to send letters from
Felix (an unreal cat) to its customers. This is because Felix has
been the company spokesperson and so it embodies the values of
the brand.
Emotional values of the brand forms consistency in crisis
communication. While rational facts may change as the situation
evolves, the brand value is a unique asset.

Use of Technology
In a situation where quick response and information accessibility is
critical, the ability to apply technology in crisis communication
makes a big difference.
The Internet (web site) plays an important role in crisis monitoring
and communications. Its simultaneous and interactive nature allows
the company to speak to its customers directly and speedily. It
avoids the risk of message deletion by the traditional media.

Risk Assessment Audit

What are your worst case scenarios? Please list and rank
probability
What could the possible causes for the above crises be?
Are the vulnerabilities caused by:
What precautions are required for dealing with them?
Has any one of the above scenarios happened before? How did
you deal with it?
Does your department already have a crisis management plan?

Brand Audit
What is the desirable perception of the brand (and corporation)?
Please use a simple expression to describe the brand.
Who are your target audiences? (Segment them according to
psychographics)
Who influences your target audiences most? (Be specific with
different segments)
What is the most important value that the brand needs to uphold at
all times?

Crisis Management Flow Chart

Since there are typically so many activities going on, it is often helpful to work
within a structured framework which illustrates each step which must be
handled sequentially.
1.

2.

1.Potential sources
2.Consumer reports
3.Media calls
4.Regulatory
inquiries
5.Trade calls
6.Mechanism in
place to direct
information or call to
appropriate CMT
member

1.CMT formed
2.Who, what,
where, when, how
many involved,
details confirmed
3.Agree further
action needed
4.Identify whos
been notified
5.Specialists tapped

3.

1.Collect info, to
determine
magnitude and
scope
2.Key internal &
external audiences
identified
3.Appoint person
identified
4.Communications
centralised

4.

5.

1.Comprehensive plan
developed
2.roles
3.accountabilities
4.Maintain flexibility to
adjust
5.Match response to
scope:
6.spokesperson
7.actions
8.tools
9.Determine
operational cause of
problem
10.develop corrective
measures
11.identify
preventative measures

1.Resources made
available
2.Assure timely
updates
3.Document case
4.Document
findings & actions

6.

1.Feedback
solicited
2.Identify
breakdowns in
action plan
3.Were the right
people involved?
4.Learn from
experience
5.Document
learning
6.Implement
improvement
measures

Crisis Check List Sample

Strategy Meeting
Identify brand values affected
Key messages
Q&As
Employee, customer and media materials
Press release
Announcement ad
Video release
Map and Contact influencers
Monitoring system in place
Website activated
Specialist tapped

Crisis Check List Sample

Analyst briefing
Updates for employees
Key messages
24 hours customer hotline
Database strategy in place
Media enquiry hotline

Recovery: Understand the Crisis Impact

on Different Target Groups

Use research to determine crisis impact and craft messages for recovery
Quantitative research
Qualitative research
-- In-depth interviews
-- Focus groups
-- Filed observations
-- Telephone interviews (via Ogilvy One Connections)
-- Face-to-face interviews
Media audit (see sample questionnaire)
Analyse media coverage of crisis to help craft messages
Staff audit
Influencers audit
Analyse and categorise customer enquiries

Recovery: Using Different Channels

Possible high noise level events

Celebrity endorsement
Press conference
Photo opportunities
TV/print campaign
Send letter (or other alternatives) to affected audiences.
Send thank you note to appropriate people who helped the crisis control
team manage crisis
To boost staff morale: develop team spirit through creation of special
jackets, hats and other items.
Community outreach (caring)
Hotline
Plant tour to demonstrate safety
Staff family day to boost sense of belonging & care
Influencers briefing

Arguments Against Communicating

We dont
know whos
to blame
yet!

Dont admit
anything
well get
sued!
There is no toll-free road out of a crisis.
The choice companies face is between
paying sooner and paying later.
Nigel Hollis,
Chief Global Analyst, Millward Brown

When Should the CEO Apologize?

Communicating in a Crisis: The Apology

The leader should apologize if:
when doing so is likely to serve an important purpose
when the offense is of serious consequence
when it's appropriate that the leader assume
responsibility for the offense
when no one else can get the job done
when the cost of saying something is likely lower than
the cost of staying silent
Source: When should a leader apologizeand when not, Kellerman, HBR 2006

Communicating in a Crisis: The Apology

The perfect apology:

Acknowledges the mistake or wrongdoing

Accepts responsibility
Expresses regret
Provides assurance that the offense won't be
repeated
Is well timed

Source: When should a leader apologizeand when not, Kellerman, HBR 2006

Case Study: JetBlue

JetBlue's crisis
Wednesday Feb 21 2007

JetBlue has gone from hero to zero in an

impressively short time. The low-cost airline, admired for
delivering cheap fares and good service was grounded literally
and metaphorically by last week's weather, leaving passengers
stranded for hours.

Case Study: JetBlue The Apology

Communicating in a Crisis
Think Actions, Not Just Words

Instead of what should we

say, the first question
should be: what should we
do?

Case Study: JetBlue The Aftermath

Review

10 Principles

Key principle 1: Planning

Pre-plan scenarios
Map messages to
stakeholders
Assume worst case
planning position

Key principle 2: Speed

Get it right, get

it quick, get it
out, and get it
over.
Remember the
crucial Golden
Hour

Key principle 3: Its the perceived problem

Define the REAL problem:

Is it about a technical flaw or a
perception?
recognize that emotions take over
and that technical or statistical
defenses may throw fuel on the fire

Key principle 4: Centralize Information

Centralise / control
information flow:
Coming in
Going out

Key principle 5: Dedicated Team

Isolate a crisis team from

daily business concerns:
Crisis team
Communication team

Key principle 6: The Well-supported Leader

Choose the best
spokesman but in crucial
times have the CEO
lead from the front
But do not fully depend
on one individual

Key principle 7: Tone is Crucial

Retain brand voice

Playing defense is
offensive; dont play
blame game
Resist combative instinct
Consider the apology

Key Principle 8: Leverage All Channels

Dont confine yourself to traditional PR.
Have a dark web site
ready
Consider a crisis blog
Youtube videos
Search engine crisis
defense

Key principle 9: Know What Media Want

Understand the medias

point of view

victims & bad guys

damage speculation
tensions
Searching for
cause / blame

Key principle 10: Leverage Good Relations

If feasible
Broaden the
issues
Identify allies