Logos President Advises Korean Government, Corporate, and Public Health Leaders

Logos president Helio Fred Garcia was one of four international crisis experts to speak in Seoul, Korea to government, corporate, and public health officials in the wake of several major crises that rocked Koreans’ confidence in their leaders.

In the last two years Korea has seen two major crises that were both mishandled and deadly:

• An outbreak of Middle-East Respiratory Syndrome (MERS) from May to July, 2015, that was mishandled in a number of Korean hospitals, resulting in 136 cases of the disease and 36 fatalities.   The government’s failure, similar to the U.S. government’s slow and bungling response to the flooding of New Orleans after Hurricane Katrina in 2005, caused significant criticism of Korean president Park Geun-hye.
• A capsized ferry and bungled rescue effort in April, 2014 led to the deaths of 304 people.  Several bodies have not yet been recovered.

The two crises have elevated public and policy-maker appreciation of the need to have structures and capabilities in place to prepare, respond to, and recover from crises that affect public safety and security.

In response Cosunilbo, Korea’s largest newspaper, hosted the Chosun Issue Forum in Seoul on Monday, September 21.  The forum was titled Crisis Management in  Post-MERS Korea.  Other speakers were:

• Dr. Herbert Koch, President of International Association of Risk and Crisis Communication in Geneva.
• John Bailey, Managing Director of Ketchum Singapore.
• Melissa Agnes, President of Agnes+Day in Montreal.

More than more than 500 government, corporate, and public health officials attended the Chosun Issue Forum.

Cultural Barriers to Effective Crisis Response

The first speaker was Dr. Hoh Kim, director of The LABh in Seoul.

Dr. Kim is a crisis and executive leadership coach who studied with both Marshall Goldsmith and Robert Cialdini in the U.S.  In his context-setting comments Dr. Kim explored the reasons for ineffective crisis response in Korea.  He described four particular Korean challenges for effective management of crises:

1. A hierarchical culture.  He noted that Korean hierarchy is more rigid even than Japan’s and 50 percent more rigid than in the U.S.  As a result, subordinates are far less likely to challenge leaders who may want to ignore or underplay crises.
2. An imbalance in weight to minimizing legal risk rather than a focus on operational response or public support.
3. Fear of punishment or embarrassment, resulting in passivity in the face of crises.
4. Bureaucracy that often ignores expertise.

Dr. Kim quoted his teacher, Marshall Goldsmith, noting that

“The major challenge of most organizations is not understanding the practice of crisis management — it is practicing their understanding of crisis management.”

Showing You Care

Logos president Helio Fred Garcia was the first keynote speaker of the day.  His presentation focused first on the core principles of crisis management:

• Crisis management is the management of choices:
  • Of the kinds of structures and monitoring and response systems to build;
  • Of what to do and when to do it;
  • Of what to say and when to say it.
• Every problem is a business problem before it is a communication problem, and you can’t communicate your way out of a business problem.  So Effective Crisis Response = What We Do + What We Say.
• Trust is the consequence of expectations met; trust rises when expectations are met; trust falls when expectations are not met.
• Most mishandled crises begin with leaders asking the wrong question: What should we do?  This focuses attention on the leader, rather than on stakeholders.
• The more productive question is: What would reasonable people appropriately expect a responsible organization or leader to do in this situation?
• We can answer that question to a very granular level for each stakeholder group.
• But there is one expectation that applies to all stakeholders:  In a crisis, every stakeholder expects an organization and leader to care.
• So effective crisis response is a timely demonstration that we care; and a persistent demonstration that we still care; for as long as that expectation exists.

Garcia then, at the Forum organizers’ request, outlined how the U.S. Federal Emergency Management Agency (FEMA) had mishandled the flooding of New Orleans in 2005, leading to loss of trust and confidence in both FEMA and President George W. Bush.  Garcia then described the structural and other changes to FEMA since then that have restored FEMA to a place of trust and confidence.  Garcia also described the U.S. Centers for Disease Control and Prevention (CDC), and their response to the Ebola scare of 2014.

Crises from the European Perspective

Dr. Herbert Koch of the Association of Risk and Crisis Communication in Geneva described his organization’s work to put effective communication at the heart of all risk and crisis management.  He then shared the experience of ten crisis in Europe, including:

• The Costa Concordia cruise ship crisis, where the captain was later sentenced to 16 years in prison.
• The Air France crash in the Atlantic of a flight from Rio de Janeiro to Paris.
• The Germanwings plane crash caused by the pilot’s suicide/homicide.
• The Ikea scandal involving horsemeat in the company’s famed Swedish meatballs.
• The current crisis involving refugees from the Middle East into Europe.

He then provided a checklist to use to effectively understand and mitigate risk and prepare for crisis response.  Questions on the list include:

• Do I regularly update my risk management strategy to eliminate or reduce and transfer risks and to develop crisis preparedness?
• Do I define and analyze risk groups and improve their resiliency capacities?
• Have I prepared scenarios and selection procedures with regard to the most suitable crisis response strategies?

Best  Practices When There Are Fatalities:

“Failure to Prepare is a Breach of Directors’ Fiduciary Duties”

John Bailey, managing director of Ketchum Singapore, and an expert on airline crashes, discussed best practices in crisis management.  He noted that all crises are predictable, and therefore leaders and organizations should prepare for them.  He noted that failure to prepare is a breach of directors’ fiduciary duty, and that failure to manage crises effectively can cause permanent damage to business, reputation, and relationships.

He noted that crises typically escalate when:

• They reveal fundamental weaknesses or problems within the organization.
• They confirm or reinforce negative impressions of the company or its products.
• They cause the media or regulatory authorities to start “investigating.”
• The company’s public responses — or lack of them — antagonize the media or other stakeholders.

He noted the example of the BP Deepwater Horizon accident, which killed 11 people and wounded dozens.  BP’s ineffective response had significant consequences, including:

• A three-month drop in share price of 46 percent, a loss of $130 billion in market value.
• Total cash expenditures since the explosion of $54 billion so far.

He further noted that BP had a plan for such an explosion, but that the plan was not sufficient.  He concluded,

“A plan is not a substitute for judgment.”

Social Media and Crisis Response

The final keynote speaker was Melissa Agnes of the Montreal crisis management firm Agnes+Day.  Ms. Agnes is an expert in social media in crisis.  She noted the excellent work of Emory Healthcare when the Atlanta hospital system came under intense criticism for treating two doctors who had contracted Ebola in West Africa.

She noted that Emory was able to allay fears and panic by providing timely and emotionally resonant tweets and other social media postings illustrating both their capacity and readiness for treating Ebola patients and the way Ebola is transmitted.  In the end, although the Ebola scare remained high, Emory was able to maintain the trust and support of its stakeholders.

She also described the BBC’s work to help contain the disease at its source in West Africa.  BBC learned that a large number of people in West Africa communicated with each other via mobile phones on the WhatsApp application.  BBC also learned that many people were unaware that some traditional funeral practices — such as family members bathing a corpse before a funeral — had the unintended effect of transmitting the disease to all family members.  BBC launched a public education campaign using WhatsApp to educate people in West Africa about the disease, and about safe practices for caring for those who may be suffering from the disease.

Other sponsors of the Chosun Issue Forum included the Korean Ministry of Public Safety and Security and the Federation of Korean Industries.