Cobblers, the Note 7, and Crisis Management
Nathan Whipple | On 08, Nov 2016
Once upon a time, a cobbler lived in a village not too far from where you are now. He was quite skilled at his craft; in fact, there was one year where he even outsold a quite renowned cobbler a few villages over. This was thanks in part to a beautiful new pair of shoes he constructed that same year, and they were truly the talk of the townsfolk. “The best in all the land!” the people sang. One evening, there was a grand ball in the biggest village, and all the fair maidens (and gentlemen too) wore these shoes. The night was simply superb until a stroke of bad luck made it so a large number of the shoes spontaneously burst into flame.
Not to be shaken, the cobbler created replacement pairs of shoes and distributed them accordingly. By the time the next ball came around, his shoes were still seen on the feet of those in attendance, and everything seemed to be in order. That is, of course, until the shoes caught on fire once more. All the major delivery services either made stringent rules on how to return them or even worse, refused to take them at all. The cobbler found himself in a precarious situation.
Just to make sure we’re fully on the same page, the cobbler here is named Samsung, these shoes are in fact the Note 7, and, well, they are indeed catching on fire. However, this is not an article that aims to demonize Samsung and their products, but rather to analyze their response to this crisis in comparison to historically relevant examples of product recalls and their subsequent handling.
Let’s warm up our time machine with a recall that occurred early this year: Chipotle. Unless you were living in some small village with cobblers, you remember that strain of E. Coli that was found lurking in burritos around the Pacific Northwest and scattered states across the country. While seemingly still popular with the younger demographic during this period, the outbreak rattled the organization, and trust in the company waned. Yet here you are, craving a burrito bowl as I speak. What kind of wizardry did Chipotle employ to make this so?
First and foremost, they were transparent. This screenshot from their website circa November 2015 provides clarity, details, and Chipotle’s response to the incident in clear, digestible language. In addition, they added a page here about their food safety standards and the steps they’re taking to ensure that all their food meets certain health requirements. They also shut down all stores on February 8 the following year in order to educate employees on new food handling procedures and to discuss the situation.
On the consumer end, Chipotle responded with numerous marketing campaigns and advertisements aimed at winning back consumers, the most notable of these examples being Chiptopia, the summer-long program that rewarded customers with the only thing better than Chipotle: free Chipotle. Even before the promotion, company stocks were back up four percent, and although it seemed like confidence has yet to return to previous levels, faith in the company seems to be (at least partially) restored. The final verdict? Transparency and an investment back into company safety seems to have paid off for one of the largest casual dining chains in the country, and Chipotle looks like it’s going to make it after all.
On the other side of the spectrum may reside the mother of all bad PR management: BP. After their oil platform Deepwater Horizon spilled an estimated 1.39 billion barrels of oil into the Gulf of Mexico, making it the largest accidental marine oil spill in history, CEO Tony Hayward didn’t seem all that concerned, as he reminded people that the Gulf of Mexico is “very big” in comparison to the “relatively tiny” spill. Poor Tony didn’t get a whole lot of praise for that one, and as such expressed his contempt for the ordeal claiming that, “You know, I’d like my life back.”
To be fair, he later apologized for the remark, and BP began to take an accelerated approach towards the clean up efforts and their overall image. They launched a brand new division to handle the company’s response to the incident and developed a media campaign totaling fifty million dollars. Our dear friend, Tony, however, try as he might to save face, was fired in the following months.
Poor, poor Tony.
So, where does Samsung fall in the spectrum of crisis management? For having delivered batch after batch of exploding phones, it’s not as bad as you might think.
They’ve launched a page on their website detailing steps to take regarding the recall of the phone, and information about where Note 7 users can go from here. In addition, they’ve decided to completely cancel production of the phone altogether, which may seem like a no-brainer, but keep in mind that this is being called one of the costliest product safety failures ever. Reports are also coming in about Samsung leaning towards retiring the “Note” brand after the debacle, and faith in the company could continue to wane if it were to continue. Seeing as it’s now a federal crime to bring a Note 7 on an airplane, this news doesn’t come as much of a shock.
Here’s the bottom line: While Samsung may not be running around giving out free phones willy nilly, they’re doing what they can to save themselves and consumers from any more damage. For being in what can only be described as uncharted territory in the world of product recalling, the situation as of now seems to have stabilized, and only time will tell how they continue to monitor and handle the Note brand and regain the loyalty of customers and shareholders alike.
Make no mistake though: this cobbler isn’t going anywhere anytime soon.
Sources: PBS, Samsung — Recall Info, AFR, Android Central, Forbes, Samsung — Galaxy Splash Page, CNET, The Verge, FDA, CNBC, Wayback Machine, Chipotle, CNN, Smithsonian, The Guardian, CNN, Reuters, The Verge
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