September 15, 2016 by Lindsey
What Samsung Did Wrong When Responding To The Galaxy Note 7 Disaster
If crisis were to strike your company tomorrow, would you be ready? Melissa Agnes helps organizations prevent and manage their issues before they become catastrophic, with the aim of never having them become catastrophic at all. Read her case study below about how Samsung could have handled their crisis better:
Samsung has spent the better part of this month managing a crisis that is hurting them globally. It all started at the beginning of September when several Galaxy Note 7 phones were reported to have spontaneously combusted into flames for no apparent reason. This risk is so great, in fact, that several airlines and safety regulators around the world have put out warnings, stating that the Galaxy Note 7 should not be stowed in checked luggage, nor should it be turned on or plugged into the plane’s USB port for charging while in-flight.
How Did Samsung Fare In Their Crisis Response?
Samsung has clearly chosen to take this situation seriously from the get-go, and has demonstrated care and concern for their customers’ safety. Part of the way they’ve done this is via their swift communications and response to this serious issue – only those swift communications have also been their downfall.
While it’s true that timely and informative communication is one of the secrets to successful crisis management in this day and age, it’s also equally important for those communications to be factual. Taking too long to communicate in a crisis will result in criticism, lack of control over messaging and can ultimately hurt your organization’s reputation and bottom line. But on the other hand, speaking too quickly can have equally damaging repercussions – a harsh lesson that Samsung is in the process of learning.
For example, earlier this month Samsung released a statement in Hong Kong, assuring customers that their phones used a different battery than the ones being reported about, and that as a result, their Hong Kong customers would not be affected. However, the very next day Samsung was forced to retract that statement when they realized that 500 phones in Hong Kong had in fact been affected after all.
Additionally, their swift response also resulted in frustrating regulators, as the company did not adhere to the U.S. Consumer Product Safety Commission’s recall guidelines and protocols, which state that coordination of recalls must be done in collaboration with the CPSC, which Samsung initially failed to do.
While I believe that their intentions for a swift response to this important issue were honorable, their rashness resulted in frustrating their customers and regulators, as well as continued and renewed media attention which has impacted their reputation and “shaved as much as $14 billion off [their] market value,” as reported by the NY Times.
How To Balance Timeliness And Accuracy In Your Crisis Communications
Crisis management today requires a delicate balance between timeliness and accuracy. You cannot compromise on either one, as both can result in the amplification of challenges and risks within your crisis management. So then the big question becomes: how can you enable your team to achieve this required balance in the heat of the moment?
The answer is: by being prepared to both understand and meet your stakeholders’ expectations.
For example, stakeholders expect you to respond swiftly in a crisis. What they don’t expect is for you to have all the answers right from the start. What they expect instead is to be provided with timely, accurate and transparent information and updates throughout the different stages of the incident’s crisis management. Let’s use Samsung as an example to make this real.
Had Samsung issued what I call a “first response statement” at the onset of the crisis, rather than starting off with more of an “official response,” they could have demonstrated the same care and concern, while avoiding the misstatements, confusion and retractions.
The Different Between A First Response Statement And An Official Response Statement
The first response statement is a thoughtfully crafted statement that assures stakeholders that the organization is taking the situation seriously. It provides information regarding what the organization is currently doing to manage the incident, as well as information on when stakeholders can expect to receive more detailed information and answers to their remaining questions. In essence, this statement is meant to:
- Demonstrate to key stakeholders that the organization cares and is prioritizing the management of the incident;
- Answer stakeholders’ immediate questions, i.e.: “did you know?”, “do you care?”, “what are you doing about it?”, “when will we learn more?”, etc.;
- Buy the organization more time to actually manage the incident behind the scenes and get to the root of the problem;
- Position the organization as the voice of trust, credibility and leadership throughout the crisis.
This first response statement can and should be issued as quickly as possible. A good rule of thumb is to strive to release it within the first 15-60 minutes from the time the crisis develops an online presence. The good news is that your first response statement can, for the most part, be pre-drafted and pre-approved before a crisis occurs, giving you more of a chance to meet this tight timeline.
The official response statement, however, is what is communicated once the organization has had the appropriate time to assess the situation and provide fact-based and confirmed answers to the bigger questions. As an example, in the case of the Galaxy Note 7, Samsung’s official communications should have come after they coordinated the details of their recall with the CPSC in the US, and after they thoroughly confirmed if and how their Hong Kong market would be impacted.
The timing and accuracy of your communications in a crisis counts for a lot. The stakes are high, stakeholders are upset and stress dictates that it’s easy to make mistakes, even with the best intentions. But there are things you can do to help stack the chips in your favor. Thinking through your crisis response strategy and pre-drafting that first response statement is a good place to start. I’m sure Samsung is wishing they would have held off on those initial details for a day or so.