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Part 2 of an interview with a Chinese PR student on crisis communications and social media.

Here is Part 1.

3. Does social media impact crisis communications in different ways in Asia versus the UK? Are there any characteristics exclusive to the UK?

In my experience social media can indeed impact crises differently in Asia, and much of this comes down to speed – parts of Asia are very highly networked – and the culture of the web, which can be immensely volatile, especially in a country like China. Compounding matters there’s the fact that customer and stakeholder opinion is evolving quickly across the region, not least concerning expectations about corporate good behaviour and transparency, while government attitudes towards foreign companies, in particular, can be hostile, and control of the internet notoriously uneven. These aspects – and plenty of others – require a close understanding of the context in which you are operating.

Operationally, the main difference is that Asian organisations tend to be more conservative, hierarchical and slow to make decisions, which can make the management of a crisis challenging. And where there is a culture of strong local political control, and a pliant local media, local companies may well have little experience of having to manage serious negative events in public and online – a notable example being Taiwan Formosa and the Vietnamese governments’ inept handling of a toxic spill earlier this year that ravaged hundreds of kilometers of coastline and damaged the livelihood of thousands of local Vietnamese fisherman.

Equally, some multinationals operating in Asia are reluctant to devolve crisis decision-making to their local businesses, resulting in precious time being lost when you need to respond quickly and appropriately at the start. And for the reasons pointed out above, foreign companies must be mindful of throwing the standard western crisis playbook at what may be a very different business, media, political and legal environment.

I’m not convinced there’s anything intrinsically unique about the nature of crisis communications in the UK – at least in a western context – other than perhaps the behaviour of the mainstream media, specifically the tabloid press, which can be very single-minded in their willingness to build up and then attack an organisation, and whose views tend to bleed quickly and deeply into the social web.

See also my Primer on Crisis Communications, which covers similar territory.

 

Despite an economic slowdown, the rout of its stock markets, a plunge in exports, and a crackdown on free speech and the media under Xi Jinping, China remains a huge opportunity for local and foreign companies alike.

It also presents its fair share of challenges, not least rapidly evolving consumer and stakeholder expectations, demands and behaviours, and a cut-throat, dog eat dog business environment typified by murky, closed-door government decision-making, high employee churn and widespread disregard for others’ IPR.

And while the internet, mobile and social media are powerful tools to raise awareness, connect and drive sales and loyalty, they are also highly demanding and unpredictable platforms for competitors, customers and others to attack you, something that is done with real relish in China.

How big a problem online attacks are in China, what form they take, and how they should be handled is the subject of an in-depth interview just published by Forbes (and builds on comments I had earlier given to PR Week on the necessarily complex and somewhat thorny topic of PR ethics in Asia).

I hope both pieces shed some light on China’s idiosyncratic internet culture and how it can best be tackled.

 

Amazon is suing over a thousand people offering bogus reviews on Fiverr.com for USD 5. Employees at Bell Canada are discovered ramping its apps without disclosing their affiliation. Researchers reckon 20% of reviews on Yelp are fake, an often cited report by Bing Liu at the University of Illinois estimates 30% of online reviews are not what they appear.

PR ethics — for want of a better description — are cause for concern across the world.

How do they compare in Asia?

chinawebscrubbersAs noted in a recent PR Week article on PR ethics in Asia (in which I am quoted), much depends on the local context, particularly consumer expectations, the regulatory environment and industry codes, the relative maturity of the PR and marketing industry, and the willingness (and sometimes naivety) of the mainstream and other media to keep its face clean.

Widespread ‘Black PR’ in China is sometimes cited as evidence that the problem is endemic in the region and it is fair to say that the brutally competitive nature of business in the Middle Kingdom, in which the opportunity to undermine detractors/the competition through fair means or foul is often pursued with relish, combined with widespread anon- and pseudonymity, pressure to buy advertising for better coverage, and all manner of other nasties, help make it a particularly tricky place to do business.

In my experience, China is an outlier. Despite a reputation for cosy political relationships and a pliant mainstream media in many parts of the region, and evidence of devious online practices, there’s little to indicate that shady PR is any more widespread and entrenched across Asia than in, say, Latin America or parts of Europe.

 

The Hong Kong’s government’s communications response to the Occupy Central protests met with a chorus of disapproval at a recent PR event I attended here in the SAR. According to the panelists, the authorities were unprepared, have had little concrete to say and appear woefully out of touch. There’s much in this. However, it is equally fair to say they have been dealing with an extremely difficult situation and that there are some things they have done reasonably well.

OccupyCentral_masthead

 

In note form, here’s my take on the HK government’s performance, focusing on its words rather than its actions:

The challenge

  • Highly emotional, polarized and volatile political environment
  • Unconventional and disciplined protesters
  • Lack of clarity about depth of support for the Occupy movement
  • A roudy LegCo and media
  • An ongoing background disinformation campaign by Beijing.

What went OK/well

  • The openness of the public TV debate
  • HK chief secretary (civil service head) Carrie Lam’s performance as lead government negotiator and debater
  • Keeping HK chief executive CY Leung in the background (largely)
  • Vocal support from pro-Beijing politicians and, rather more intermittently, business and community leaders.

What could/should have been better

  • Inadequate explanation of Beijing’s nomination decision
  • Insufficient communications preparation for the ensuing crisis
    • Slow/reactive initial response, enabling protesters to dominate the media agenda
    • Should have got protesters to the negotiating table – public or private – faster
  • Lack of effective spokesperson
    • CY is a poor natural communicator, typically appearing overly scripted and exhibiting poor body language and lack of eye contact
    • Video analysis indicates CY exhibits ‘very low substance and low authenticity’
    • The almost total absence of the HK police leadership
  • Inappropriate tone of voice
  • Poor quality and inconsistent messaging
    • For example, the lack of support for claims about foreign influence
    • CY Leung’s gaff over the CE nominating committee being only for the rich
    • Inconsistent claims eg ‘HK in chaos’ and ‘dwindling numbers of protesters’, sometimes in the same statement
  • Poor storytelling
    • Little use of video, photos etc to tell the government story, rebut rumours etc
    • Only recently has the government made a concerted effort to illustrate its side of the story
  • Inadequate use of social media
    • Social media is the communication tool of choice amongst young Hong Kong-ers, and has been used heavily to organize and mobilize the protests
    • But the HK government appears not to have a social media strategy, using it in an ad hoc manner to push its communications
    • Nor does it have a social media crisis communications strategy – its use of Twitter, Weibo and other social media to communicate the government’s position during the protests has been minimal.

Anything you disagree with? Or feel I have missed?

 

From GSK, Qualcomm, VW/Audi, Chrysler and Microsoft to McDonald’s, Yum Brands/KFC and most recently Walmart, it has been a long, hot summer for foreign companies in China as they fall foul of Beijing’s renewed clampdown on food safety and anti-monopolistic activity.

Same same you might say, a metaphorical shrug of the shoulders seemingly given weight by CIC/Ogilvy PR’s latest Crisis Management in the Social Era report which finds that most significant crises in China in 2013 involved foreign companies, including nine of the top 10, as measured by the volume of Weibo posts.

Yet hark back to 2012 and the majority of crises in the Middle Kingdom involved domestic entities, evidence perhaps that the current clampdown is deliberately targeting foreign firms, despite denials from Beijing.

Crises_in_China_2012_2013

 

 

 

 

 

 

 

 

 

The report also contains interesting data on the effectiveness of different crisis responses on short-term purchase decision-making. The findings will not be unfamiliar to crisis communications professionals:

  • Least damaging: acknowledge the problem and promise to investigate
  • Most damaging: outright denial.

Whether the impact of a crisis is best measured by the volume of Weibo posts is open to question; impact on sales or reputation/trust are arguably more useful metrics.

In addition, Weibo is only one of many social media in China, albeit the most influential, at least for now.

Concerns over the methodology notwithstanding, the report is worth a read.

Here it is in full:

 

It is the time of the year when corporate reputations are paraded afresh, and first out of the blocks is the annual list of The World’s Most Reputable Companies from the Reputation Institute.

The 2014 list contains some interesting findings from an Asian perspective:

  • Three Asian firms make the top 10: Sony, Canon and Samsung
  • Only 20 Asian firms make the grade, all but five (Samsung, LG Electronics, Singapore Airlines, Acer, Lenovo) of which are Japanese
  • Lenovo is the only Chinese firm to be listed.

The fact that Japanese companies are still regarded as the most reputable in Asia comes as little surprise (despite Sony’s financial difficulties), and Samsung’s rise to the top ranks is probably only to be expected.

The list also underscores the huge reputational challenges facing Chinese companies as they go global – an issue I have written about previously.

The RI’s list is also interesting for what’s not there:

  • No energy firms
  • No banks
  • No Indian firms.

Here’s the list in full:

RI_WorldsMostReputableCompanies2014

 

 

 

Hong Kong boasts one of the highest levels of newspaper readerships in the world. And the province’s mainstream media as a whole is regarded as highly trustworthy.

So it was disappointing to wake up this morning to the report below in the venerable South China Morning Post.

Media credibility and trust in Hong Kong, 2013
The headline speaks for itself. Yet a closer reading of the article shows that the survey in question was not about newspaper credibility but about media credibility. In fact, public sector broadcaster RTHK tops the charts.

Some might call the headline disingenuous. Others would call it spin.

(The online version of today’s headline is more revealing: “Post tops survey on newspaper credibility as trust in Hong Kong media sinks to all-time low“.)

While trust in the mainstream media does indeed remain high, a majority of Hong Kong-ers reckon news in Hong Kong is censored, with too much criticism of the local government and too little of Beijing.

As we have seen across the border in mainland China (and elsewhere in Asia), the more people figure the mainstream news is slanted or doctored, the more they resort to social media and word of mouth to get the ‘real’ facts.

In a battle to retain its credibility (and circulation) against ever steeper competition, the Post is surely doing itself no favours by cherry-picking the facts.

UPDATE: January 05, 2014: Rumours behind Kim Jong Un allegedly feeding his uncle to 120 starved dogs emanated from Hong Kong paper Wen Wei Po. The story really got legs when it was run by Gawker, which has now partially retracted it, mentioning that Wen Wei Po is one of the least credible newspapers in Hong Kong according to the Chinese University survey cited above.

 

Chinese brands are more than holding their own against western firms in the court of public opinion in China, according to WPP’s latest Top 100 Most Valuable Chinese Brands study.

Local brands the mainland Chinese most trust are:

MostTrustedChineseBrands2014

 
A few things jump out:

  • The fact that a majority of the most trusted firms are now privately-owned
  • The high level of trust placed in Baidu, despite its legacy of selling search placements, paid deletion of online comments, video copyright infringements and other misdemeanours
  • The absence of (and therefore relatively low trust in) well-known global Chinese companies, notably Lenovo.

Most noteworthy is that the study finds that Chinese companies/brands are (and indeed have been for some time) as trusted or more trusted in the China than their foreign peers, something that may come as a surprise to many outside the Middle Kingdom and to plenty of foreigners living in China.

ChineseversusForeignbrands_2014

Assuming the data is accurate, and putting aside concerns that the findings go against the grain of other (pdf) studies and that trust differs significantly by category (German cars and Italian luxury still get the nod in China), how is it that so many Chinese firms are building local reputations that are just as strong if not stronger than those of their foreign peers?

Some brief thoughts:

  • They understand local consumers and stakeholders better than their foreign competitors
  • They provide increasingly useful, valuable and high quality products
  • They have kept prices affordable, at least relative to some foreign firms eg. Starbucks
  • They are actively improving customer service and other functions
  • They provide many local Chinese with jobs
  • In an environment in which patriotism is being played up by the authorities, Chinese companies are seen as Chinese (though this can work both to their advantage and to their detriment)
  • Government and official media (CCTV) campaigns against foreign firms such as Apple and GSK are helping seed doubts about the quality of foreign products
  • Foreign brand failures, such as Fonterra’s botulism scare earlier this year, have given local brands an opportunity to cast themselves as caring and responsible.

As the study shows, companies of all types are generally held in fairly low esteem in China. The Chinese are notoriously price conscious and fickle – brand loyalty remains low in the country. As competition intensifies and food safety and pollution issues continue (as seems likely), trust will become an increasingly important factor in purchase decision-making in China.

Going forward, it will be interesting to see which Chinese companies manage to win the real trust of their domestic customers and other stakeholders, and how they go about it.

Equally interesting will be to see how foreign companies react.

Surely even the German car makers won’t be able to rest on their laurels for too long.

If ever there was a stark reminder of the lack of trust in Chinese companies in the west, it is surely the Committee on Foreign Investment in the US’ (CFIUS) recent investigation into pork as a national security threat as part of  Shuanghui International’s acquisition of US meat producer Smithfield Foods. Finally approved by shareholders on September 24, the deal is the largest takeover of a US company by a Chinese firm to date.

Given images of dead pigs floating in droves down the Yangtze River and the generally parlous state of food in China, food safety is a legitimate concern for US regulators.

However, while pork is widely consumed in the US, its availability can hardly be said to be critical to the health and welfare of the average American citizen. The real issue is that Shuanghui is Chinese and the deal is viewed in Washington as another instance of the long arm of the Chinese government willfully and steadily eroding US dominance in one industry after another.

For many in the west, Chinese companies continue to be seen as purveyors of poor quality goods produced at low cost with little concern for employee well-being or safety. Traditionally focused on increasing local sales, building market share and closely managing their relationships with key customers, investors and the mainland government, Chinese firms have had little reason to tackle the preconceptions – merited or otherwise – of foreign policy-makers and opinion-formers.

As they expand into western markets, China’s companies find themselves having to win support in Washington and Brussels. To gain the confidence of policy-makers and regulators, they must demonstrate strong governance and a substantive commitment to the local communities in which they hope to operate by hiring and empowering local people and developing strong local partnerships. Honest and open communication, something that does not come naturally to Chinese corporate leaders, is also vital.

More challenging are allegations of covert support from the Chinese government and close connections with the military, as Huawei has discovered. While difficult for third parties to prove, these claims are also tricky for Chinese companies of all types to deny plausibly, especially at a time when China is aggressively creating a roster of national and global champions.

With these concerns increasingly raised in western capitals, Beijing could help the cause of Chinese companies by clarifying how state aid is allocated and to which entities, further strengthening corporate governance standards and insisting on more detailed reporting. Better still, it should free up competition in the many sectors still dominated by China’s state-owned enterprises.

In light of the increasingly political nature of decisions regarding foreign investment in the west, Beijing should also pay attention to how China itself is viewed amongst opinion-forming elites and the general public. Research shows that while people across the world believe that the global balance of power is shifting in China’s favour, the country’s image remains poor in the west and has gotten worse in recent years due to perceptions of widespread corruption, growing military power and its increasingly vocal claims in the South China Sea. China’s growing commercial clout and the way it does business are also frequently cited as concerns.

Conscious of its image, Beijing has been attempting to improve China’s standing through a wide range of ‘soft power’ initiatives, including a huge investment in the expansion of CCTV and part-funding the roll out of Chinese language and culture Confucius Institutes across the world. In the US alone there are now over 70 Confucius Institutes.

Nevertheless, as Harvard political scientist Joseph Nye has pointed out, true soft power is rarely achieved employing top-down measures; rather it is only accumulated when businesses, artists, academics and others are allowed to flourish freely and independently and concoct ideas and products with real global appeal.

To win hearts and minds, China could usefully learn from its South Korean neighbour and specifically from PSY and Samsung, both of which have transformed perceptions of their home country more effectively than decades of institutional effort by the government in Seoul.

To turn heads in the west and open up new markets to Chinese products, Beijing has much work to do improving its own business backyard before its companies are trusted.

Its strongest long-term card may lie in creating a level and fertile playing ground on which individual voices and entrepreneurs can flourish.

Disclosure: Huawei is a former client.

 

 

The very public resignation of a Mannings shop assistant in Hong Kong over what she saw as flagrant profiteering by Chinese traders buying infant milk-powder products in Hong Kong and reselling them in mainland China, resulting in local shortages, has led to indignation online and in the mainstream media.

Mannings_milkcrisis

The incident is the latest in a series of high-profile incidents involving retailers that have inflamed already volatile Hong Kong-China relations.

While the Hong Kong government moved swiftly to defuse the situation by limiting sales to two cans or 1.8 kg of formula, Mannings has appeared flat-footed in its response. At the time of writing the pharmacist has yet to issue a response, or at least one that wasn’t immediately withdrawn from its website.

It is hardly news that aggrieved employees, customers, and others can nowadays cause immense damage to organizations by talking direct to the media or sharing their views and experiences online.

Yet firms continue to suffer the ignominy of social media humiliation. Ask Dolce & GabbanaLaneigeKitchenAid or HMV.

In addition to ensuring that the appropriate business policies and processes are in place to reduce the likelihood of angry employees or customers taking their grievances public in the first place (on which, here are some thoughts for Hong Kong retailers), firms must also set about actively managing the risks inherent in social media.

Here are some basic pointers on how to avoid losing face via social media:

1. Treat social media as a strategic tool

Many organizations continue to approach social media as an add-on, rather than as a core communications vehicle. Others see it as a one-way street to marketing fame and fortune. Disgruntled employees and customers have a different take – social media is the perfect tool for public shaming and redress. Firms that are seen to be listening and responsive are less likely to suffer at the hands of their detractors than those who appear not to understand or care.

2. Social media is not for juniors

Handling awkward situations on social media in real time demands quick thinking, real sensitivity, and a structured approach to decision-making. This requires staff with good communications skills and judgement, an understanding of the full range of business issues that may be raised, and access to and the confidence of senior management. Manning the social media front-lines is a job for experienced professionals, not for juniors.

3. Develop a comprehensive social media rulebook

Social media staffers need a clear understanding of when and how to use social media in a manner consistent with the company’s business strategy, values and culture. And they must understand how to assess and respond to whatever is thrown at them – both good and bad – all of which should be covered in a Social Media Playbook or Manual. In addition, organizations should develop a dedicated Social Media Crisis and Issues Manual and ensure that social media front-liners are properly trained in how to handle serious incidents and crises.

4. Control access to and use of social media accounts

Develop a clear policy on who does – and by implication, who does not – have access to your official social media channels, restricting usage to personnel who have had the appropriate social media training. Ban the use of social media management accounts for both professional and personal use. And regularly update your passwords to reduce the likelihood of their getting into the wrong hands, or being hijacked.

5. Influence social media even if you’re not there

Many organizations believe that it is ineffective or even impossible to respond to a problem on social media without their own branded social media channels. Neither is true. If a problem surfaces on a third-party channel/community, it is essential to respond on the offending channel itself before the issue escalates. And while it is certainly preferable to have your own social media presence during a crisis, social media does not live in isolation, so using the mainstream and trade media to communicate your point of view once an issue has worsened will very likely lead to its getting picked up in social media.

First published on ClickZ

 

Compared to more developed markets in the west, trust in Asia is in fairly rude health, according to Edelman’s 2013 Trust Barometer.

Some data-points to bear this out:

  • 6 of the 10 most ‘trusting’ countries are Asian – topped by the Chinese, Singaporeans and Indians
  • Above average trust in business in many Asian markets, notably India, Indonesia, China, Singapore and Malaysia
  • Very high levels of trust in government in China and Singapore, with otherwise generally higher average levels of trust in most other Asian markets (with the exception of Japan and Korea)
  • Significant trust in CEOs in most Asian markets
  • The five countries in which the media is most trusted across the world are China, India, Indonesia, Singapore and Hong Kong
  • Other than in Mexico, NGOs are held in the highest regard globally in Asia.

The study also reminds us, should we need reminding, that trust in Asian companies in developed countries remains low – see the chart below.

Edelman2013_AsianCompanyTrust

While it is hardly surprising that Indian firms, many of which have been expanding internationally for some time, are held in higher esteem in developed markets than their Chinese counterparts, the reverse is the case in emerging markets.

My guess is that the principal reason for this is that Chinese firms have placed greater emphasis on expanding first in emerging Asian markets, whereas Indian firms have tended to leverage their Anglophile connections and shared English language to prioritise markets such as the UK and USA.

Equally, it could be argued that Chinese firms have a more substantive presence in the more widely known consumer electronics (Haier, Huawei, ZTE, Lenovo etc) and goods sectors, whereas Indians are better known abroad for B2B services (Infosys, Wipro, Tata Consulting etc) amongst business and technology professionals.

What do you think?