The VW crisis: It’s the basics, stupid!

22 Tuesday Sep 2015

Posted by Dimitris Agrafiotis in Cases, Crisis

Tags

crisis communications, crisis management, social media, VW

A few days ago, I had published a post about going back to the basics in crisis communications. There was nothing deep or new about it. I had to share with all of you some basic rules that we should never forget when a crisis occurs. Well, a crisis occurred for VW and now we are witnessing a storm hitting one of the most respectable and innovative corporations worldwide.

Well, this is the story:

The Environmental Protection Agency (E.P.A.) accused VW of using software to detect when the car is undergoing its periodic state emissions testing. This detector would turn on only during tests in the cars’ full emissions control systems. During normal driving situations, the controls are turned off, allowing the cars to spew as much as 40 times as much pollution as allowed under the Clean Air Act, the E.P.A.. The software was designed to conceal the cars’ emission of the pollutant nitrogen oxide, which contributes to the creation of ozone and smog. The Obama administration on Friday 18 September directed Volkswagen to recall nearly a half-million cars, saying the automaker illegally installed software in its diesel-power cars to evade standards for reducing smog. (Source: New York Times)

The software used to manipulate emissions tests in the United States, and the extensive attempts by Volkswagen to deflect official scrutiny before admitting misconduct this month, suggest that the cheating was not just the work of a few rogue engineers. (Source: New York Times)

It’s obvious that VW deceived its customers and the US national authorities and violated a series of laws. When the public finds out about the trickeries, the consequences in the era of social media might be irreversible. VW had not expressed, at least until yesterday, its apology for such an outrageous practice in social media despite the negative comments in Facebook and Twitter. The head of the German automaker made a statement a few days after the outbreak of the issue expressed his apology but he was not completely sincere. Although VW has evidently made a mistake, Prof. Dr. Martin Winterkorn, CEO of Volkswagen AG said: «We do not and will not tolerate violations of any kind of our internal rules or of the law».

This statement means that either they lie or they are totally ignorant about their business outside Germany. I wonder how such an organization of VW’s magnitude said something like that. Either it is an organized deception or ignorance, VW should apologize to the public in a more sincere way using all communications channels including traditional media and social networks.

VW lost its credibility not only in the US but worldwide inflicting a heavy blow on the reputation of the brand. Does anyone still believe that the basics of crisis communications have lost their importance? It’s the basics, stupid!

The opinions expressed in this article are those of the author, and they do not reflect in any way those of his various affiliations.

Socially-connected Oil & Gas corporations and challenges ahead

20 Sunday Sep 2015

Posted by Dimitris Agrafiotis in Cases, Media

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Tags

oil & gas, social media

In my opinion, Warren Buffet has said everything about communications in 23 words: «It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently. »

This is so true that I could hardly find just one argument against it. Some years ago, before the social media era, there could be ways to turn the tables and protect the reputation of an organization focusing on traditional media and specific stakeholders. Those days are irretrievably behind us. Nowadays the social media is a big ocean and every once in a while a couple of tsunamis hit the « coast» of organizations. On the subject of organizations’ exposure to social media with unpleasant experience for them, the first example that came to my mind the BP’s oil spill.

Given the numerous mentions of scholars and communications experts on BP’s PR disaster, it would not be wise to elaborate further on this but we could go bit further and explore some aspects of the Integrated Oil & Gas industry’s exposure to social media. The idea was to explore the social media presence of the top 30 Integrated Oil & Gas corporations globally. The selection of these corporations was based on the 2014 Top 250 Global Energy Company Rankings by Platts, which is considered as one of the most significant Price Reporting Agencies for oil market in the world.

The methodology I followed was the simplest it could be. I just visited the websites of these corporations. The findings of the research show that 84% of the Oil & Gas corporations have presence in at least one social network. Only 5 out of the 30 companies (16%) have no social media presence at all. It’s worth mentioning that the corporations from China (2) and Russia (4), with the exception of Gazprom which has an international expansion, have limited or none exposure to social networks.

On the other hand there are 4 corporations with more than 5 accounts in social networks. The social media champion of the industry is the Royal Dutch Shell with 7 accounts (Facebook, Twitter, Youtube, LinkedIn, Google+, Instagram and Flickr). BP, more experienced than ever in handling difficult situations in social media, has presence in 6 social networks (Facebook, Twitter, Youtube, LinkedIn, Google+ and Flickr). Every corporation has 3 accounts on average in social media.

The most popular social networks among the Oil & gas corporations are, as expected, Facebook (63%), Twitter (70%), LinkedIn (66%), Youtube (63%) and the others follow far behind.

Three out of the 30 corporations have some limited presence on social media without reference on their main website.

The Integrated Oil & Gas industry has suffered major disasters in the past with several casualties and heavy environmental effects such as the Piper Alpha disaster in the North Sea, which killed 167 people in July 1988, the Alexander L. Kielland disaster in the Norwegian continental Shelf, operated by Phillips Petroleum, killing 123 people, the Seacrest Drillship disaster in the South China Sea killing 91 crew men.

The Oil & Gas corporations which are socially connected probably will know what to do if a crisis occurs. After all these years of accumulated experience we expect from these corporations to handle a crisis in social networks in a textbook manner. It remains to be seen to what extent their crisis management plan in communications and social networks is feasible or not.

More charts about the presence of Oil & Gas industry in social networks are available here.

The opinions expressed in this article are those of the author, and they do not reflect in any way those of his various affiliations.

Lessons learnt about crisis communications in Greece during the last years

25 Tuesday Aug 2015

Posted by Dimitris Agrafiotis in Crisis

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Tags

crisis communications, Greek crisis, lessons learnt, social media

During the last 7 years, the companies operating in Greece, Greek or foreign ones, have to deal with a continuous crisis. The difficult fiscal situation in combination with a social unrest has created a challenging environment for the private sector. Several companies faced a series of communication challenges which evolved into crises. The most notorious example is about one of the biggest FMCG companies in Greece that a few years ago decided to close down one of its production lines in the country. The labour union politicized their struggle against the company demanding from the management of the company to reconsider its decision. The company’s management kept a hard stance against the labour union which took advantage of the political status quo.

This is just one of the many examples of crisis communications cases for businesses in Greece during the last challenging years. The Greek crisis has made us a bit wiser about handling crisis communications and the lessons learnt might apply to other environments in international level. So, what have we learnt so far?

Any crisis communications plan must be flexible in order to adjust it in any case especially in an unstable external environment.
The worst case scenario is the base of a crisis communications plan. We may pray for the best but we need to be prepared for the worst. Unfortunately several Greek companies just crossed their fingers in order to deal with situations that eventually damaged their reputation.
In order to reduce costs, several Greek companies decided to weaken their communications teams. They may have achieved savings but they left their companies without the necessary and experiences human resources to deal with a crisis.
A crisis communications plan might include the opportunity to strengthen the reputation of a company.
A company has to be sincere, honest and apologetic if necessary. It’s a common mistake that companies fear to admit wrongdoing because they consider it weakness.
Greek companies followed the trend of social media in order to enhance their reputation but they discovered, sometimes the hard way, that communications are a two-way street and they might have to deal with a wave of negative comments and they were not ready for that.

These are some indicative lessons learnt about crisis communications in Greece during the last years. It would be great to have your views and thoughts about them

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