GolinHarris | breakthrough

Crisis Fundamentals … Never Before So Fundamental
by John Morgan, Regional Managing Director, Greater China

John Morgan

It has been a very interesting past several months for the GolinHarris in Asia Pacific. In addition to the diverse bodies of work featured in Breakthrough, we managed a half-dozen or more projects we’ll never be able to discuss outside the sanctity of our client relationships.

Of course, I’m referring to the work we do in crisis management.

Here’s a sample of the kind of calls a public relations firm sometimes receives:

	A manufacturer is wrongfully accused of product defects by a very tiny NGO with abundant access to new media.
	A manufacturer needs to recall a product line due to a freak defect it never could have anticipated in which the item proves to be flammable in direct, intense sunlight.
	A transportation company experiences the death of an employee and the injury of a customer—in two different Asian geographies on the same day.
	A well-known F&B chain is taken to court by a customer who claims to have ingested a foreign object at one of the company’s locations.
	A company fails to deliver on a customer promise, fails in its honest attempt to correct it and then wakes up to find the details of the episode in the paper the next day.

You probably already have a headache just reading about these unfortunate events. The good news, though, is that in all five scenarios, GH has seen clients live to do another day of business. When I look back on why these potentially catastrophic episodes did not explode, the answer is very clear: Every GH client had a healthy respect for the fundamentals of crisis management and the courage to act swiftly and responsibly.

Every one of these clients knows that customers, business partners, analysts, investors, NGOs and the general public hold them to extremely high standards for how a company should react in a crisis—today more than ever before. If any stakeholder group feels they have been slighted, they don’t hesitate to speak up and speak out. And today every stakeholder group has access to communication tools and media that can spread news and complaints faster than ever before, all around the world.

This is not one of those “what to do in a crisis” articles. Well, maybe it is. But I’m writing this more as a friendly reminder of the 10 keys to effectively managing a crisis.

1	Candor: State the facts when you know them, accept responsibility and recognize that the problem exists and that something must be done to fix the problem.
2	Leadership: Explain what happened and display appropriate visibility by the appropriate level of company spokesperson.
3	Responsiveness: Respond in a timely and appropriate manner, and if you can, involve third-party allies.
4	Corrective Action: Explain what you’re doing to correct the situation. Also, remember that corrective action should be rational and responsible, yet at the same time should aim to reach beyond public expectations.
5	Compassion: Show the appropriate level of remorse, empathy, regret and/or sympathy.
6	Visible Decisiveness: Ensure that you are seen doing the right thing.
7	Anticipation: If you did your homework in anticipating potential crises, then you already know, fundamentally, how to respond—which means you have more time for the critically important details of your response strategies.
8	Internal Pulse: If you have listened to your employees and engaged them in the process of managing the unfortunate incident, then they have become ambassadors of defense, not finger pointers.
9	Foundation: You have the first aspect of a reputation-insurance policy: Your company has always conducted business by the highest ethical standards so that stakeholders are more prone to empathize with you.
10	Social Responsibility: You have the second aspect of a reputation insurance policy: Your company has been actively involved in its industry and in the lives of its customers … so they are even more prone to empathize with you and come to your defense.

I have delivered these 10 tips dozens and dozens of times over the years, both during training sessions and in the heat of the moment. I used to be amazed how many of our clients didn’t understand them, or worse yet, were not compelled to act on them.

Today, I’m pleased to say I’m amazed how many of our clients live and breathe these fundamentals and rise to the occasion in what may be either a minor annoyance or the beginning of their darkest hour. It is rewarding to know that more and more, communications professionals are among the first that business leaders contact when bad things happen.

So, in conclusion, two thoughts: 1.) Keep up the good work; and 2.) It wouldn’t hurt to read that list again.

GH Chat Room: Directors Discuss PR in the Blogsphere

PR Week magazine’s Global Account blog features panelists from PR firms and corporations around the world who discuss the issues that are central to them both in their own markets and on the global stage.

John Morgan, regional managing director for GolinHarris in Greater China, and Lydia Lee, director in Shanghai, have represented the agency on a host of topics from regional PR practices to local trends and lately the growing “green” movement. (Read about the launch of GH’s new sustainability practice, GeoImpact, here).

In this issue of GH Chat Room, Breakthrough samples a cross section of their recent contributions to the Global Account to get a glimpse of the blog format and greater insight from the pair.

October 1, 2007
China goes green
Posted by John Morgan

“Green” is both opportunity and threat in Greater China. As I write this post, I’m on my way to listen to Al Gore deliver a presentation in Hong Kong called “Ethics and Sustainability”. The fact that the dinner sold out in about 24 hours and I had to turn clients away who wanted to attend, should tell you how high “green” is on the agenda in this part of the world. It’s gone from nice-to-have to strategic imperative.

On the mainland (China), of course, there have been nightmares, just too many, from bad air to bad water. But I’m too much of a Sinophile to dwell on the negative. The fact is that sustainability is high on China’s agenda and factors prominently into its 11th Five-Year Plan, which aims to bring harmony between economic development and the natural environment. But what’s really interesting is that China is doing more encouraging than actual doing, leaving a bigger role for business to fill. And there are plenty of business/government partnerships that are producing meaningful results, particularly MNCs who are actually volunteering to assist local Chinese SMEs in sustainable production methods.

In Hong Kong, a wonderful place where more than 40% of the territory is devoted to the park system, there are problems just too immense to ignore. Air pollution has scared away many ex-pats and businesses pondering where to locate their APAC headquarters who have headed north to Shanghai or south to Singapore. Then there’s the obvious ones like recycling programs—at the moment there is no place to really recycle (so it goes to the dump). A local supermarket chain recently promoted a stylish “not a plastic bag” handbag but then distributed it inside a plastic bag.

But, I also love Hong Kong too much to dwell on the negative as well. One recent move in the right direction is the creation of “LOHAS,” a huge environmentally-friendly residential development that is being built not so far away from the Hong Kong Special Administrative Region’s landfill. It might sound strange, but it’s a beautiful use of land that otherwise might have been used for fairly undesirable purposes.

June 8, 2007
China is one country, but not one market
Posted by Lydia Lee

One can divide China clients into two: multinational companies (MNCs) and local companies.
The MNCs usually have a better understanding of the power of PR and are keener to hire agencies to assist them at different levels, mainly because they see their global counterparts working with agencies and learn along the way. Budget is usually fair.

On the other hand, many local Chinese companies do not yet fully understand what PR is and what it can do. Their view of PR remains to the rudimentary—write press releases and use personal relationships to get the articles published. Local companies tend to not hire international PR agencies because they do not see the value for the price they pay. On a strategic note, local PR companies are usually bigger in size and use this characteristic to attract clients who want a bigger service team. Although they do provide some strategic counseling, most of the time it is “arms and legs” work (implementation/execution).

China is one country, but certainly not one market. What works in Shanghai might or might not work in Beijing and vice versa. In addition, tier-two and tier-three cities have a very different media/marketing scene. With tier-one cities (Beijing, Shanghai and Guangzhou) saturated, companies are relying on expanding into tier-two cities for their continual success.

Demand for companies with solid corporate reputation management experience is on the rise, especially now that media and government bodies measure MNCs with stricter and higher standards. Another area on the rise is crisis management. As companies are put under microscopic review, more and more companies realize they need to be prepared for a rainy day. As a result, we are seeing a rise in demand in crisis management consultation, as well as pre-crisis management trainings.

Finally, providing consolidated consultation is a must in the future, i.e. PR plus advertising, plus public affairs and maybe some new media strategy and marketing strategy. Clients are starting to demand hybrid services where at the strategic level, one or more communications disciplines needs to be involved. And agencies that understand how to mix and match these tools will increasingly become more attractive to clients.