Module 5:Media relations and

Crisis Communications

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Why media relations?

1. Know and target the media 2

2. One bad interview can ruin your company’s reputation

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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)

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4. Perception matters -- media visibility affects the bottom line

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5. Media diet has changed

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It’s not the tools or the technology, it’s the story

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1: Being transparent matters

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Denials despite online evidence

DENIA

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ADMISS

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2: Be ready to act fast

Old pic posted as new 12

3: Get ahead of a crisis

KFC posts Facebook updates after video goes viral 13

KFC statementsFeb 7, 2012 Feb 9, 2012

Feb 8, 2012

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4: Do the right thing!

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5: Appoint professionals

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Local crisis Foreign crisis

“I want my life back!”17

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DefinitionsA 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

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Types of crises• 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, anti-trust. Microsoft.

• Medical: Mass hysteria, flu outbreak, H1N1, SARS

• 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.

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Crisis communications re-actions

POOR

Decline to comment

Deny or lie

Defensive – take it personally

Deflect or downplay – taichi, blame game

BETTERAssure – show you

care, calm fearsAccept and

acknowledgeApologize (if you

have to) and be specific

ACT – fix it

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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

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

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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

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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.)

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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_____________)

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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 on-going.

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Key Messages

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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.

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• 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

Key messages (cont.)

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Message 1• Facts & Figures• Elaborate• Examples• Repeat

Main Message

(Headline you want to see tomorrow)

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

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Case study: DBSAsia’s Safest Bank?

Piyush Gupta, DBS CEO

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DBS ATM fraud timelineJan 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 a total of S$23,000 within 24hrs.

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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

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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.

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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

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The power of viral videos from a “unknown” blogger

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Mainstream media picks up story

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Source: Fortune40

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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 under the symbol IR.

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“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.”

Lock and ‘keys’ offer on

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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

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Good news, get it out fast

Bad news, get it out faster!

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Dell to recall 4m laptop batteriesCNET 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

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 batteries48

Crisis escalates and spreads online

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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

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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

'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….

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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

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Social Media Listening Command Center

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The Concept Of P.E.A.R

In Crisis Communications

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SafeguardSafeguard PPeopleeople

Protect theProtect the EEnvironmentnvironment

Protect company’sProtect company’s AAssetsssets

Protect company’sProtect company’s RReputationeputation

Response In Crisis

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• Dell alerts customers, warns of danger, sets up website for recall & replacement

• Dell continues to work with safety authorities to monitor the situation

• Dell expresses confidence in Sony and safety of its products to customers and stakeholders

• Dell takes ownership, shows customers it cares

• P = Safeguard PEOPLE

• E = Protect ENVIRONMENT

• A = Protect ASSETS

• R = Protect REPUTATION

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Being pro-active

http://www.ideastorm.com

http://mystarbucksidea.force.com/ 60

Real-time support on Twitter

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@MaxisListens: One-to-one customer complaint resolution

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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

Crisis Communications Summary

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