Samsung Trying to Control the Damage

Samsung is dealing with a tough situation: batteries in the Galaxy Note7 have been causing fires. Warnings to turn off Samsung phones are heard on many flights, including mine to Denver this weekend. As the BBC reports, "that sends out a negative message about your products beyond even your own customers."

The company handled the initial reports well but lost favor when its replacements overheated or burned. The BBC article explains the growing issue for Samsung:

"The trouble is that even one phone which catches fire makes for startling pictures and a whole heap of consumer anxiety. Samsung may soon have to decide whether to cut its losses and abandon the Note 7 before it does more damage to its brand."

The New York Times also reported on Samsung's poor crisis communication:

"But for people to see those words, they had to click a link at the top of Samsung's home page with the not-so-urgent label 'Updated Consumer Guidance for the Galaxy Note 7.' As of Tuesday afternoon, the instructions had not been posted to Samsung's Facebook page or the company's Twitter account.

"For some who work in crisis management, it was a baffling and overly passive way for the South Korean electronics giant to deal with a prominent problem that has worsened in the last month."

On its website, Samsung posted this message: 

Samsung Will Ask All Global Partners to Stop Sales and Exchanges of Galaxy Note7 While Further Investigation Takes Place

on October 11, 2016

 

We are working with relevant regulatory bodies to investigate the recently reported cases involving the Galaxy Note7. Because consumers' safety remains our top priority, Samsung will ask all carrier and retail partners globally to stop sales and exchanges of the Galaxy Note7 while the investigation is taking place.

We remain committed to working diligently with appropriate regulatory authorities to take all necessary steps to resolve the situation. Consumers with either an original Galaxy Note7 or replacement Galaxy Note7 device should power down and stop using the device and take advantage of the remedies available.

Discussion Starters:

• Look at Samsung's recent news statements about this situation. How well has the company handled communication on its website?
• How, if at all, do you see this issue potentially reflecting poorly on the mobile industry? What should other phone manufacturers do?

Nestle Recalls Ice Cream Cones

Nestle is recalling Drumstick ice cream cones because of Listeria concerns. The company posted a recall notice on its website:

After the introductory paragraph and explanation of product types recalled, the press release provides a Q&A. Questions include where Listeria was found (on equipment, not on the product itself), symptoms of Listeria, how the problem will be prevented in the future, etc.

The list includes two bold questions:

• "Why did it take so long for you to find this?"
• "This sounds like another Blue Bell situation with listeria in ice cream. Is your situation the same as theirs was?"

In response to the first question, the company wrote, "Unfortunately, an error occurred in logging receipt of the test result. We discovered the error during a subsequent review of records. As soon as we identified the error, we notified FDA and initiated the recall."

To the second question, the response is, "No. Each recall has its own unique facts. Except for the coincidence that our recall involved both ice cream and listeria, our situation is much different from Blue Bell's in a number of significant ways, including: (1) we have no listeria findings in the ice cream itself (just the equipment); (2) we have only one product line affected; (3) we have only one facility affected; and (4) we self-identified this event and took precautionary steps to recall product."

Discussion Starters:

• The two questions identified here are risky. Explain the risks and why the company may have chosen to include the questions.
• How do you assess the question about Blue Bell? How does the response help, instead of hurt, Nestle's image?

News Conference About the NJ Train Crash

One person was killed and 108 were injured when a train crashed in Hoboken, NJ. What caused the crash is still unclear, and NJ Governor Chris Christie promised an investigation: "We have no indication that this is anything other than a tragic accident but ... we're going to let the law enforcement professionals pursue the facts."

Christie gave a news conference with NY Governor Andrew Cuomo, calling the incident "obviously an extraordinary tragedy." He said it was too early to guess what happened.

• Analyze Christie's delivery skills at the beginning of the press conference. What principles from Chapter 11 does he use?
• Next analyze Cuomo's delivery skills. What similarities and differences do you notice?
• How well do the governors respond to questions? Which were the most difficult to address?
• This isn't the first train crash in the area. Research other recent events and how officials handled those situations.

More Recalls at Blue Bell

Just when we thought the trouble had passed for Blue Bell Creamery, the company is recalling Cookie Dough ice cream because of Listeria concerns. Last year, Blue Bell recalled several products, which resulted in staff layoffs, a difficult situation for a family-owned company with loyal employees.

This time, the company is clearly blaming external supplier Aspen Hills. The latter company's recall announcement tops Blue Bell's webpage. Then, Blue Bell's press release is titled to deflect responsibility:

"BLUE BELL ICE CREAM RECALLS SELECT PRODUCTS CONTAINING CHOCOLATE CHIP COOKIE DOUGH PIECES PURCHASED FROM OUTSIDE SUPPLIER ASPEN HILLS DUE TO POSSIBLE HEALTH RISK"

Blue Bell uses a similar strategy on its Facebook page, pointing to Aspen Hills as the cause of the problem. To downplay the issue, the company starts the announcement with "Out of an abundance of caution," further putting the bad news in context. 

Discussion Starters:

• Who are the audiences for Blue Bell's announcement? Identify primary and secondary audiences and analyze each.
• How well is Blue Bell announcing the bad news? Consider principles from Chapter 8, Bad-News Messages.
• Analyze word choices in all Blue Bell communications. Which are the most powerful? Which could be improved?

Yahoo Responds to Data Breach

More than 500 million Yahoo users were affected by a security breach, just as the company is being acquired by Verizon. The breach happened in 2014, and information is surfacing now.

In a Tumblr post, Yahoo explained what information was stolen (and what was not), what the company is doing, and what individuals should do to protect themselves:

"The account information may have included names, email addresses, telephone numbers, dates of birth, hashed passwords (the vast majority with bcrypt) and, in some cases, encrypted or unencrypted security questions and answers. The ongoing investigation suggests that stolen information did not include unprotected passwords, payment card data, or bank account information; payment card data and bank account information are not stored in the system that the investigation has found to be affected. Based on the ongoing investigation, Yahoo believes that information associated with at least 500 million user accounts was stolen and the investigation has found no evidence that the state-sponsored actor is currently in Yahoo's network. Yahoo is working closely with law enforcement on this matter."

A Wired article offers this advice: "And for the millionth time: Don't reuse passwords." Wired also discussed the bad timing: "Yahoo's buyout deal is set to become a test case of whether a massive corporate sale can weather an equally massive hacking debacle."

Discussion Starters:

• Read Yahoo's statement. What principles from Chapter 8, Bad-News Messages, are followed?
• How well does Yahoo reassure users? How clearly are the action steps explained?

ITT Closes and Leaves Students in Limbo

The U.S. Education Department has stepped up its regulation of for-profit institutions, and ITT hasn't fared well. The government cut federal aid for new students attending ITT schools, and the organization has decided to close the entire operation-130 campuses across 38 states. More than 35,000 students and 8,000 employees will have to find new a place to study or work.

A non-profit sector research analyst was quoted in the LA Times: "Both Corinthian and ITT made the same bad decision, which was to guarantee third-party private loans while pushing out more students into a weak jobs market after the Great Recession."

The New York Times reported a host of questionable practices at ITT for years:

"[Critics] reported deceptive marketing; strong-arm recruitment tactics; misleading information about costs, courses, graduation and job placement rates; inflated enrollment numbers; bait-and-switch schemes; subpar instruction; and more."

A former dean was troubled by ITT's practices but got fired when he raised issues.

U.S. Education Department Secretary John B. King Jr. said, "The school's decisions have put its students and millions of dollars in taxpayer-funded federal student aid at risk." He explained the Department's perspective and provided resources to students in a blog post, shown here. Students also can participate in a webinar to learn more.

ITT, of course, is blaming the government, calling its actions "unwarranted" and "inappropriate and unconstitutional." 

Discussion Starters:

• Compare ITT's statement and King's message to students. What differences do you notice in audience focus, tone, messaging, organization, and so on? 
• What other information do you think students will need? What about employees?
• How could ITT more convincingly defends its position?

British Airways Apologizes for Delays

Computer issues plagued Delta recently, and now British Airways is feeling the pain. Tens of thousands of customers have been delayed while checking in, dropping off luggage, and waiting to take off. Frequent fliers may remember similar delays in July, when the airline was upgrading its check-in system. This time, an IT issue shut down some systems, causing staff to hand write boarding passes.

The airline apologized for the delays, admitting that processes have been "taking longer than usual": "We are sorry for the delay to their journeys." Although passengers were actively complaining on Twitter, the company had little to say online. The Twitter page has only one reference to the delays-after the issues were resolved.

But some customers did receive a letter, posted in an NBC article.

 

Discussion Starters:

• Assess the letter to customers. What principles of letter writing and bad-news messages does the airline follow in this communication? What would improve the letter?
• What word choices and other aspects of the letter tell you it's British? Why did the airline chose this method of communication?
• What else, if anything, should the airline have communicated on social media?

JetBlue Temporarily Loses a Child

A woman paid $100 for JetBlue to safely escort her five-year-old son from the Dominican Republic to JFK airport in NYC. But her boy was sent to Boston, in exchange for another boy who landed in JFK., according to The New York Times. JetBlue issued a statement:

"On August 17, two unaccompanied children of the same age traveling separately from Santiago, Dominican Republic - one to New York JFK and one to Boston - each boarded a flight to the incorrect destination. Upon learning of the error, our teams in JFK and Boston immediately took steps to assist the children in reaching their correct destinations. While the children were always under the care and supervision of JetBlue crew members, we realize this situation was distressing for their families."

The JetBlue representative also said, "We are also reviewing the incident with our leadership and Santiago airport team to prevent similar situations from occurring in the future." The company refunded the child's ticket and gave the family $2100 is vouchers for future flights.

On a webpage, Families in Flight, JetBlue gives parents tips for traveling with children, including a page with pick-up and drop-off requirements for "kids flying solo."

Image source.

Discussion Starters:

• How did JetBlue handle the situation? Consider the statement and compensation. Should the company have said or done something differently?
• Since this writing, we haven't heard anything about the other boy, which may start a new round of news stories. What, if anything, should JetBlue say at that time? The company should be preparing for it.

Data Breach Affects 20 Hotel Properties

Twenty HEI properties suffered a data breach of payment information. HEI is a hotel owner/operator and has branded hotels under Marriott, InterContinental, Starwood, and Hyatt.

HEI posted a list of the properties, which includes an Equinox, two Le Meridiens, six Westins, and others. The company also posted a notice on its website.

Individual hotels don't seem to be communicating much; for example, the Boca Raton Marriott and Westin Philadelphia websites aren't displaying the typical breach notices. These brands may be smart to leave the trouble with HEI.

Discussion Starters:

• What's your assessment of HEI's message? What principles of business writing are followed? Who is the audience, and how well are their needs met?
• What are the most important messages for customers to hear after a data breach?
• Should individual properties do more? Why or why not?

Huffington Steps Down

After building Huffington Post into a significant brand and news source, CEO and founder Arianna Huffington is leaving the company after 11 years. The company was sold to AOL 2011, and then Verizon acquired AOL in 2015. Huffington stayed on since but has become less visible in the company.

Now, she's starting a venture, Thrive Global, which focuses on employee well-being and is based on two books she's written. She explains the decision:

"As Thrive Global moved from an idea to a reality, with investors, staff, and offices, it became clear to me that I simply couldn't do justice to both companies."

The New York Times reports her position at Verizon as "increasingly precarious." The liberal news site has become a smaller part of a global media company, and perhaps the voice has been shrinking, particularly with Verizon's recent purchase of Yahoo. 

Huffington tried to reassure staff, who have been leaving the company steadily for the past year:

"Great companies always succeed beyond their founder. Even though HuffPost bears my name, it is absolutely about all of you and about this amazing team we've been for over 11 years."

AOL CEO Tim Armstrong also tried to do his part:

"Today, The Huffington Post is a firmly established and celebrated news source, and AOL and Verizon are committed to continuing its growth and the groundbreaking work Arianna pioneered."

Discussion Starters: 

• What else could Arianna Huffington, and perhaps the executives at Verizon, say to reassure HuffPost employees? They are likely concerned about their future without the founder at the helm. 
• In her statement, Huffington talks only about her new wellness company. Should she say more about the company's position within Verizon? Why or why not?

Lessons from Delta Outage

Delta experienced one of those crisis situations during which it's impossible to make customers happy. After cancelling 1000 flights on Monday, 775 on Tuesday, and more than 300 on Wednesday, the airline finally reports, "Delta's Flight Operations Return to Normal." 

When the power outage first hit on Monday, now blamed on equipment failure, customers weren't kept informed about their flight status. In most cases, passengers received no notification, others received text messages that there flights were ready to board when they were not, and others sat on a plane on a runway for five hours. Because Delta's entire communication system was down, the company had limited ways of getting accurate messages to passengers. The failure does raise questions about Delta's backup systems, although CEO Ed Bastian said they have redundant systems.

On Monday on Twitter, representatives responded to customers, but they could say little other than, for example, "Hi there. I am really sorry for the inconvenience. Our systems are down everywhere. Hopefully it won't be much longer. *SD."

The company had kept the public updated on its website. A string of posts shows Delta's optimism-real or imagined-to maintain the airline's image:

Employees helping customers in Salt Lake City after outage
Delta's flight operations return to normal
Aircraft in Atlanta with beam of sunlight
Flight schedule continues moving towards normalcy

Also to keep customers loyal to Delta, grounded passengers got a full refund and a $200 certificate for a future flight. Bastian apologized in a video, below, and was interviewed on the Associated Press about the situation. His theme is "This is not who we are," which could work well for the company to isolate this incident and point to long-term successes that built the brand. 

Discussion Starters: 

• Do you agree with my assessment of "This is who we are"? What are the dangers of that communication theme? 
• What's your view of Bastian's video? Analyze the audience, key messages, delivery style, and so on.
• What else, if anything, should the company have done on Twitter?

Time's Layoff Jargon

I'd like to see a layoff announcement without "realignment," "leverage," and "content creation." Time Inc. couldn't manage it in the recent statement about laying off about 110 of its 7,200-person team: 

"Over the last couple of weeks, we have been realigning our organizational structure to better leverage our content creation, sales and marketing and brand development operations. Our primary objective has been to better position ourselves to operate with greater agility and optimize the growth areas of our operation. As a result, there will be some job eliminations. That is always painful but an unfortunate reality in today's business climate."

According to AdAge, employees aren't surprised, based on recent memos announcing new management and a new editorial structure. CEO Joe Ripp also admitted, "We're always looking at costs."

Part of the restructuring includes new ad teams for technology and telecommunications, pharmaceuticals, and automotive.

Image source. 

Discussion Starters: 

• What's the harm in using jargon in a layoff announcement? What are some alternatives?
• Time representatives won't say when the layoffs will take place. How does this strategy affect employees? What are the factors involved in the timing decision?

Ikea Bungles Recall

Ikea has finally recalled dressers in China that could tip over if not properly anchored. In June, the company recalled 36 million dressers in the United States and Canada after reports that six children were killed. But Ikea skipped China because, according to a WeChat post, the dressers met local regulations.

Chinese news agency Xinhua criticized Ikea, referring to the company's "arrogance":

"The behavior shown contradicts to the 'Ikea spirit' that founder Ingvar Kamprad talks about, being helpful and responsible" and "China is a huge market, and should not be deprived of the high standards that the brand promises." 

In a turnaround a few days after the WeChat post, Ikea recalled all dressers, which includes about 1.7 million in China. On a page on its Chinese website, the company announced the recall and reinforced its campaign, "Firmly Fixed," which encourages people to anchor certain products to the wall. Consumers also can read the recall FAQ. 

Image source.

Discussion Starters: 

• What is Ikea's responsibility to communicate installation instructions? What is the consumer's responsibility to install furniture properly?
• Should Ikea have recalled all products? Did the company do the right thing after the criticism? What are the consequences of each decision?

Communications Around Shootings

More police shootings this week led to a peaceful protest in Dallas until a sniper killed five police officers, wounded seven more, and wounded two civilians. Videos and messages are shaping our understanding of the incidents and our perspective on how to solve the problem of ongoing violence.

Diamond (Lavish) Reynolds posted a video after her boyfriend, Philando Castile, was shot in a car in St. Paul, Minnesota. The video, viewed more than 5 million times, is graphic, showing the man dying while Reynolds narrates. 

In a statement, Minnesota Governor Mark Dayton asked for a full investigation of the incident. 

Another graphic video this week showed police shooting Alton Sterling in Baton Rouge, LA. The FBI has opened an investigation of this incident.  

President Obama made a statement on Facebook and in video. After expressing condolences, he gave data showing "disparities in how African-Americans and Latinos are treated."

Today's New York Post's cover reads, "Civil War," and people aren't happy about it. One Twitter user called it "insanely irresponsible."

Discussion Starters: 

• Assess President Obama's statements. What else is there to say? 
• What's your reaction to the graphic videos (of course, you don't need to watch them-I could take only about a minute. In what ways do the videos help and hurt the victims and their families? 
• What's your view of the New York Post front page? What are the dangers of this headline?  

Responses to Boy's Death at Disney

A two-year-old boy was taken by an alligator at the edge of a lagoon at a Florida Disney Resort. His body was recovered 16 hours after the attack. 

Jacquee Wahler, vice president of the Walt Disney World Resort, said, "Everyone here at the Walt Disney World Resort is devastated by this tragic accident. Our thoughts are with the family. We are helping the family and doing everything we can to assist law enforcement." Wahler also said, "We are conducting a swift and thorough review of our processes and protocols. This includes the number, placement and wording of our signage and warnings.''

The president of Walt Disney World also posted a short statement: 

There are no words to convey the profound sorrow we feel for the family and their unimaginable loss. We are devastated and heartbroken by this tragic accident and are doing what we can to help them during this difficult time.

On behalf of everyone at Disney, we offer them our deepest sympathy.

Disney did display "No swimming" signs around the lagoon, and people are questioning whether this is enough. Alligators are common in the lagoons, but attacks are rare.

Orange County Sheriff Jerry Demings was interviewed on the day of the attack and then announced when the body was found, on June 16.

Image source. 

Discussion Starters: 

• Should Disney do more to protect people? Research the situation before you respond. 
• Beyond the statement you read here, what else, if anything, should Disney say? 

Communications About Orlando Tragedy

The tragic shooting at an Orlando, FL, gay club has brought communications from local politicians, global mourners, and of course, presidential candidates. The killer's motive could be homophobia, terrorism, or both, depending on your perspective. With 50 people dead and another 53 wounded, this is the largest attack since 9/11 and has left people wondering how and why.

Here's a summary of communications about the event:

• President Obama's statement. Sadly, this isn't his first speech following a shooting tragedy in this country, and his message is consistent about needing more gun control.
• The National Rifle Association's op-ed in USA Today.
• News conference with police chief, FBI, and mayor, June 12 (below)
• Police chief's news conference, June 13
• Orlando college statements offering condolences and support.
• Presidential candidates' statements:
  • Bernie Sanders
  • Hillary Clinton
  • Donald Trump

Image source.

Discussion Starters:

• Compare the presidential candidates' statements. How do their positions differ, and which do you most support?
• Assess the news conference. How are the officials sharing responsibilities, reporting on events, demonstrating sympathy, and so on?

UCLA Responds to Shootings

It's another sad day of shootings, this time at UCLA, leaving two dead in what seems like a murder-suicide. 

The university has published several communications to keep the community informed and help people deal with this tragedy: 

• An email from Chancellor Gene Block, also posted on the university's website
• A news statement on the website
• A press conference with the Chancellor, posted on YouTube

Messages offer condolences and counseling, thank police and others who responded, and focus on healing. Trying to get back to some sense of normality, the university will resume classes except in the engineering building where a professor was killed. Provost Scott Waugh explains: "Obviously there's a lot of very distressed students, faculty and staff. And our goal within the school is to heal those wounds and make sure that they feel comfortable with the situation before resuming normal activities."

Discussion Starters: 

• Who are the primary and secondary audiences for the university's messages? 
• Assess the chancellor's press statement. What principles of delivering bad news and delivering oral presentations does he use? 

Layoffs at Intel

'Tis the week of layoffs. Intel is cutting 12,000 jobs, and Nordstrom is cutting about 400. In a press release, Intel explained the rationale:  

Intel Announces Restructuring Initiative to Accelerate Transformation

SANTA CLARA, Calif., April 19, 2016 - Intel Corporation today announced a restructuring initiative to accelerate its evolution from a PC company to one that powers the cloud and billions of smart, connected computing devices. Intel will intensify its focus in high-growth areas where it is positioned for long-term leadership, customer value and growth, while making the company more efficient and profitable.

The data center and Internet of Things (IoT) businesses are Intel's primary growth engines, with memory and field programmable gate arrays (FPGAs) accelerating these opportunities - fueling a virtuous cycle of growth for the company. These growth businesses delivered $2.2 billion in revenue growth last year, and made up 40 percent of revenue and the majority of operating profit, which largely offset the decline in the PC market segment.

The restructuring initiative was outlined in an e-mail from Intel CEO Brian Krzanich to Intel employees.

"Our results over the last year demonstrate a strategy that is working and a solid foundation for growth," said Krzanich. "The opportunity now is to accelerate this momentum and build on our strengths.

"These actions drive long-term change to further establish Intel as the leader for the smart, connected world," he added. "I am confident that we'll emerge as a more productive company with broader reach and sharper execution."

While making the company more efficient, Intel plans to increase investments in the products and technologies that that will fuel revenue growth, and drive more profitable mobile and PC businesses. Through this comprehensive initiative, the company plans to increase investments in its data center, IoT, memory and connectivity businesses, as well as growing client segments such as 2-in-1s, gaming and home gateways.

These changes will result in the reduction of up to 12,000 positions globally -- approximately 11 percent of employees -- by mid-2017 through site consolidations worldwide, a combination of voluntary and involuntary departures, and a re-evaluation of programs. The majority of these actions will be communicated to affected employees over the next 60 days with some actions spanning in to 2017.

Intel expects the program to deliver $750 million in savings this year and annual run rate savings of $1.4 billion by mid-2017. The company will record a one-time charge of approximately $1.2 billion in the second quarter.

Webcast Intel also announced first-quarter 2016 earnings today. The company will discuss the restructuring initiative during the earnings webcast scheduled today at 2:00 pm PDT on its Investor Relations website at www.intc.com. A webcast replay and audio download will also be available on the site.

According to Krzanich, the layoffs will result in "the highest revenue per employee in Intel's history."

For a while in class, I used former Intel CEO Paul Otellini's email announcing layoffs of about 1,000 managers. That seems like child's play now.

Discussion Starters: 

• How would you summarize Krzanich's rationale for the layoffs?
• 12,000 is a big number. How well does Krzanich justify the decision? What should be done internally? 

Nordstrom: Latest Company Laying Off Employees

Although Nordstrom has been a "Wall Street darling," as a Seattle Times article says, the company has announced layoffs of up to 400 employees. Sales for Nordstrom and discount store Nordstrom Rack are falling. The news comes after 120 technology positions and 14 manager positions were cut earlier this year. 

In a press release, the company emphasized keeping up with changing market demand.

A Business Insider article explains the conundrum between facing an American consumer who doesn't want to pay full price and the company's desire to maintain its identify as a high-end retailer. According to one writer, heavy discounting "will ultimately drag everything down with it, including brand image, potentially quality and essentially the value of all things."

Image source.

Discussion Starters: 

• How should Nordstrom deliver the news internally? 
• Write an email that the company could send to its employees announcing the decision. Try to adapt the press release to an internal audience. 

Harsh Rejection Letters

Business Insider has gathered a fun lot of rejection letters to people who went on to have successful careers. One, to Andy Warhol, appears in Chapter 8 of the text book; others are to Harry Potter writer J.K. Rowlings and movie director Tim Burton. 

Many are harsh. Forget about a "buffer" and letting the receiver down gracefully. The one shown here, about fantasy writer Ursula Le Guin's novel, starts with a short compliment, and then doesn't mince words. A letter to Gertrude Stein mocks her book: "Hardly one copy would sell here. Hardly one. Hardly one." 

Some, although tough, probably gave good advice. A letter to comic book artist Jim Lee told him, "Your work looks as if it were done by four different people," and explains which parts were best and what he should work on: "Resubmit when your work is consistent and when you learn to draw hands." The artist agreed with the rejection. 

Specific feedback is best, but it doesn't have to cut to the bone.

Discussion Starters: 

• How do these examples differ from business rejections today? Why do think there is a difference? Consider the era and industry. 
• What is the harshest rejection you have received? How did you react, and what did you learn from it?