We Have A Problem: Crisis and Reputation Management in the Digital Age

By Woon Tai Ho, PN Balji, Keith Nakamura and Eugene Quah

Crisis communications and crisis management are terms often used in the corporate world but rarely understood. In the era of social media, crisis is compounded by the entry of a loud and often powerful player, the public. “We have a problem” is the first book written in Asia about contemporary corporate crisis. The title is as much a declaration of crisis as the book is a collective wisdom of solutions to unfortunate yet common events that happen to big and small businesses. The book uses five local and five foreign case studies to illustrate crisis communications and management at its worst and at its best.

Creator of Today newspaper PN Balji, founder of Channel NewsAsia Woon Tai Ho, social media guru Keith Nakamura, and litigation lawyer Eugene Quah reveal the most important secrets and strategies used to rescue companies in crisis, and discuss the opportunities lost by those who did not understand the value of speed and sincerity in this digital age. Why is deleting a crisis post on social media a bad idea? Why is it important to empower every member of your staff to prepare for crisis? This team of writers know how to win, not just in the court of law, but also in the court of public opinion. Learn why it is prudent to get your holding statements endorsed by your legal team before a crisis happens. And what emergency action you must take when netizens snap compromising photographs of your backend production, whether it is repacking soya bean milk and labelling as “freshly prepared” or naming buns after a recently deceased head of state. And then, how do you say sorry in action, not in words? A tale of two Tonys, the CEO of AirAsia and the CEO of BP: how was Tony Fernandes a leader, and why was Tony Hayward not.

“We have a problem” is the protection you need for your business reputation in this digital age. Skilfully managing the perception of a crisis determines the difference between a company’s life and death, because in the pitched battle between perception and reality, perception always wins.

• Language: English
• Publisher: Candid Creation Publishing LLP
• Release date: Sep 8, 2016
• ISBN: 9789811108549

Book preview

First published April 2016

Copyright 2016 © Woon Tai Ho, PN Balji, Eugene Quah, and Keith Nakamura

All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of the publisher, except for inclusion of brief quotations in a review.

Candid Creation Publishing books are available through most major bookstores in Singapore. For bulk order of our books at special quantity discounts, please email us at [e-mail]

We Have a Problem

Crisis and Reputation Management in the Digital Age

National Library Board, Singapore Cataloguing-in-Publication Data

Name(s): Woon, Tai Ho, 1958- author. | Poravankara, Balji, 1948- author. | Quah, Eugene Siew Ping, 1971- author. | Kok, Keith Kuan Soon, 1975- author.

Title: We have a pr[o]blem : crisis and reputation management in the digital age / Woon Tai Ho, PN Balji, Eugene Quah, Keith Nakamura.

Other title(s): We have a problem. | Crisis and reputation management in the digital age.

Description: Singapore : Candid Creation Publishing LLP, 2016 | In title, [o] appears as the x symbol.

Identifier(s): OCN 945391558 | ISBN 978-981-09-8443-4 (paperback)

Subject(s): LCSH: Crisis management--Case studies. | Communication in crisis management--Case studies.

Classification: LCC HD49 | DDC 658.4056--dc23

Contents

Preface

1Singapore Airlines Flight 006 Plane Crash

2BP Deepwater Horizon Oil Spill

3SMRT’s December 2011 Breakdowns

4McDonald’s Social Media #McFail

5IKEA Singapore Horse Meat Scare

6Abercrombie & Fitch’s Discriminatory Look Policy

7Unethical Shop Practices in Sim Lim Square

8AirAsia Flight 8501 Plane Crash

9BreadTalk Controversies

10Volkswagen Emissions Scandal

Afterword

About the Authors

About RHT Digital & Media

Preface

By PN Balji

What you are holding in your hands is a work of heart. Most of the people involved in conceiving and delivering this book write about, talk about, and even imagine crisis situations day in, day out.

We Have a Problem is the collective wisdom of what they have seen, heard, and experienced in their professional lives. It provides a 360-degree vision on an issue that will affect every individual, company, organisation, and government at some point in their lives.

Researcher and editor Ryan How has diligently summarised ten crises that happened inside and outside Singapore. We have assembled a team of four experts to analyse each crisis: TV authority Woon Tai Ho, social media guru Keith Nakamura, legal adviser Eugene Quah, as well as myself, print media specialist. It is our hope that these analyses will form a fuller picture of each crisis discussed in this book.

We must make special mention of Eugene’s crisis assessments. His is an angle that is rarely brought into the mix when crisis issues are discussed. Eugene gives a unique legal perspective which we are sure many will find valuable.

Media and law professionals hardly see eye-to-eye when it comes to handling crisis situations. The media person will recommend transparency and clarity when talking to the public. The law professional will want to be cautious and sceptical. We Have a Problem provides rich material on how these differences can be resolved.

Our experience in helping clients deal with crisis situations has revealed one harsh truth: very few are prepared for a crisis, with CEOs not giving it the priority it deserves. We have found leaders who underreact, overreact, or put the wrong people in charge of handling crises.

Recently, a colleague sent us an interview with a cockpit captain who summed up organisations’ fault lines in a few lines: Organisations should accept that potential crises will occur, be prepared to manage them, and have people trained to respond and lead. Unfortunately, organisations still fail this basic test.

Every case study in this book is a stark reflection of the pilot’s words.

"  They are our pilots. That was our aircraft. The aircraft should not be on that runway... We accept full responsibility.  "

On the night of 31 October 2000, Taipei was hit by the heavy rains and strong winds of Typhoon Xangsane. Singapore Airlines flight 006 was a flight between Singapore Changi Airport and Los Angeles International Airport with a stopover in Taipei’s Chiang Kai-shek International Airport (since renamed Taiwan Taoyuan International Airport). At 11.17 pm, the pilots attempted to take off in spite of the poor weather conditions, but the Boeing 747 turned onto the wrong runway, crashing into construction equipment placed on the closed runway. The plane split into three and burst into flames. Of the 179 passengers and crew on board, 83 were killed.

Initially, Singapore Airlines employees in Los Angeles disseminated the information that there were no casualties from the crash. However, this contradicted footage aired on television which showed the burnt wreckage of the aircraft. These contradictions created confusion as many clamoured for more definitive news surrounding the crash. The first press statement from Singapore Airlines came at 2 am on 1 November, three hours after the plane crash. This provided details of the flight, such as the number of passengers on board, preliminary numbers of those rescued from the crash, as well as contact numbers for relatives of passengers as well as for the media to call. This last detail was crucial, since it provided an avenue for passengers’ relatives to learn more about the crash. The airline also despatched an initial team of 150 grief counsellors to Taipei to help the relatives of the deceased cope with the trauma of their grief. A counselling centre was also set up near the Los Angeles International Airport to provide relief for passengers’ relatives in Los Angeles.

Later that day, Dr. Cheong Choong Kong, then CEO of Singapore Airlines, landed in Taipei, having come directly from New Zealand where he had been attending a business conference. One day after the airline’s initial press release, at 2 am on Thursday 2 November 2000, Dr. Cheong gave a media statement from Taipei, saying: Words fail to express the great sadness that I and all my colleagues at Singapore Airlines are feeling right now. We are shocked at this incident and saddened by the pain and grief that it is causing for many. Our deepest condolences go out to everyone touched by this event… I came here as soon as I could. I wanted to be here to be with the passengers, to be with the crew, and to be with the family members of those who were on the flight. He also provided US$25,000 as immediate financial relief to each family of the deceased to cover urgent expenses. Dr. Cheong then thanked all who had been involved in the rescue efforts, and joined the relatives of the victims in their mourning. Dr. Cheong’s presence in Taipei, so soon after the actual plane crash, helped to assure many that he was deeply involved in the operation of the airline, and took its responsibility towards its passengers as a matter of personal concern.

Later in the morning, Rick Clements, Vice-President of Public Affairs at Singapore Airlines, held a nationally-televised press conference in Changi Airport. During this press conference, a man and his daughter caused a stir as they rushed into the room, clearly distraught. In tears, the man accused the airline of not providing timely and accurate information to relatives of the passengers. This man was Tan Yin Leong, brother of Tan Yin Thong, one of the deceased passengers. Tan had received news of his brother’s death through the news reports, instead of directly from the airline.

Worn out from a visible lack of sleep, Tan shouted, We want to know what really happened. All our news is from the newspaper reporter and you are the ones who tell me … not to believe the press. Now, my brother is dead. Even though the security staff moved to escort Tan and his daughter out of the room, Clements insisted that they be allowed to remain at the press conference. Representing the airline, Clements apologised and accepted the blame for having given the passenger list to the media instead of informing relatives. He said, That was a most regrettable situation and we will not make the same mistake again. However, Tan refused to accept Clements’ apology, speaking at length about the confusion and grief caused by the airline’s handling of the plane crash, his daughter beside him. At the end of Tan’s emotional speech, Clements ended the press conference by putting his arm around the grieving man, acknowledging the distress the incident had caused for all involved.

After this dramatic incident, only reporters bearing press passes were allowed into the conference rooms. When questioned about this decision, Clements stated that the airline was not trying to prevent relatives from speaking to the media, but felt that a press conference was not the right place for this. In spite of the implementation of this new rule, Clements’ behaviour in the 2 November incident revealed how the airline did not simply wish to present their version of events, but was instead willing to allow the victims’ relatives to present their side of the story as well. By allowing Tan to remain in the press conference and even to speak to the media about his grief, the airline further showed that it would take on the responsibility for the crash.

Dr. Cheong also discussed the delicate balance the airline had to tread in the investigations of the plane crash. The initial investigation into the plane crash was conducted by the Aviation Safety Council of the Republic of China, and the report that emerged focused heavily on the pilots’ culpability, ignoring other factors that could have contributed to the crash. For example, the pilots were given the instruction to use runway 05L, but turned onto 05R instead. This runway had been converted into a taxiway, and there was construction equipment placed in the middle of the runway. It was suggested that the runway lights had been switched on for runway 05R, creating the impression that it was open for use. There was also no ground radar available at the airport, and given the poor weather conditions, the control tower had little chance of discovering that the aircraft was in fact on the wrong runway. Dr. Cheong stated that a fuller picture of the plane crash, including considerations of these other possible factors, would help the airline learn what to take note of in future.

When conclusive evidence emerged revealing that it was pilot error that had led to the plane crash, the airline accepted full responsibility for the incident. Dr. Cheong said, They are our pilots. That was our aircraft. The aircraft should not be on that runway… We accept full responsibility. The airline offered an additional US$400,000 in compensation to each family, an amount more than five times the Warsaw Convention’s maximum recommendation of US$75,000.

In an interview with Tai Ho, Dr. Cheong stated that the airline was able to address the basics of the SQ006 plane crash because it had been carrying out annual simulations of plane crashes worldwide. He said, We simulate an accident, a crash somewhere, then what would various departments in Singapore do, how would the various stations respond? And the crash could be in the middle of an ocean or could be at an airport, or an unknown location, what are the steps? These simulations involved staff from various departments and in stations all over the world, preparing the airline for such an accident. Also involved in these simulations were the grief counsellors, who Dr. Cheong called Buddies; in the SQ006 plane crash, these Buddies were assigned to the friends and families of the passengers, and spent almost 24 hours seeing to their concerns. According to Dr. Cheong, the Buddies were empowered to spend up to a certain amount to take care of the needs of the friends and families without authorisation from the management.

When the Taiwan aviation authorities concluded that it had been pilot error that led to the fateful crash, Dr. Cheong stated that the initial reaction was disbelief: When we first heard about this, we said it couldn’t be. How could the captain of our plane fly into a block of concrete? However, Dr. Cheong stated that in the face of mounting evidence supporting the authorities’ claims, they would not argue any further. He said in the interview, Admit your guilt… When the evidence is quite strong, let’s just take responsibility.

Dr. Cheong stressed