Optus cyber-attack: Could they have responded any better?

The recent cyber-attack on telco giant, Optus, has revealed and continue to demonstrate that no organisation is anywhere near clear from being vulnerable to crises. It also demonstrates, just like in many other incidents, how the data market and the appetite for it, has grown.

Data has always formed the basis for big businesses’ continuity. More so in the new cyber world, big data is big money – the bigger the data a corporation holds the more competitive advantage it has in service marketing, brand positioning, and product situating. Data helps in making informed decisions and big data is good for both legitimate business, and in malicious phishing or for ransoms.

According to reports, the Optus data breach is a result of a basic security incompetence following Optus leaving possible entry points into their system, unsecure. Unfortunately, the breach has resulted in a potentially long-term reputation and credibility damage for the corporation. As we speak, data for almost 2 million of the nearly 10 million customers risked, has already found its way out , and a further 7.7 million customers impacted in one data stream or another.

Now, what does the whole incident remind us about the damaging characteristics of crises? Well, in the modern operating environment, no corporation or business is less vulnerable to crises. As such, leadership for corporations require to be crises-ready more than they had ever been decades ago. That entails having crisis conversant executives within rank and file, but also having crisis-ready guidelines that could easily spell how information is gathered and shared with the public.

When Optus announced, on 22nd September that its customer data bank had been attacked, they seemed to have taken an internal process to accompany the announcement with an assurance to its customers. For example, part of Optus’ announcement read that:

‘Information which may have been exposed includes customers’ names, dates of birth, phone numbers, email addresses, and, for a subset of customers, addresses, ID document numbers such as driver's licence or passport numbers’

However, the coordination of information had been very problematic for Optus. It was evident the information was trickling from a disjointed source, and often incomplete. It portrayed that Optus had resolved the issue as soon as it emerged. However, that was not the case. For example, customer data had been exposed beyond what Optus initially advised. It transpired that more customer details, including Medicare details, may have been risked. Observably, it seemed Optus did not initially have a full comprehension of the depth of the crisis judging from the piece-meal communication with its customers.

The uncertain nature of crises can leave executives blurred of sense-making of what is unfolding before them. With customers still grappling for more information and alternatives for identity recovery proving slow and difficult, the amount of damage the data breach has caused to both the corporation and its individual customers is yet to be fully comprehended, and will take long to recover from. Optus will need to devise measures that minimises further harm to an already disenfranchised and uncertain customer base.

In addition, crises take a toll on organisational employees. More so on the executives, who are often the face of the corporation and brand, during crisis moments. As the Optus data breach crisis was unfolding, it was evident that the CEO Kelly Bayer Rosmarin was visibly tired, at times opting to communicate through recorded audio and videos. Optus failed to provide emotional and mental relief from such assault. Optus board could have done better by offering alternative spokesperson throughout the crisis communication. As soon as Federal Government issued its position statement, Optus board should have taken over the public engagement.

On a positive end, Optus response also cements the importance of information sharing and collaborating with stakeholders who are on your side. Optus collaborated with government agencies including the Police and other agencies to help the issuance of new documents such as a Drivers’ Licence and passports (which Optus has committed to pay for the renewal fees on behalf of the customer). In addition, the involvement of external Government agencies, such as Americas’ FBI, to help with the investigation within an Australian jurisdiction, informs how much importance the Federal Government has placed on the crisis and the security of its citizens’ data.

Crises affect corporations’ business returns, including its reputation and market share, among others. Optus may have scored in the operational response with its stakeholder collaboration in the crisis. However, with a disgruntled customer, continued bad media publicity, and a Federal Government still breathing down its neck for accountability and transparency, the crisis relief that Optus is seeking may be far out of its sight.

#crisismanagement #reputation #publicrelations #Optus #brandreputation #crisis #cyber

Boeing 737 MAX: Navigating its future.

In the period between October 2018 and March 2019, The Boeing Company found its reputation at risk of suffering a crisis following two tragic accidents involving its plane brand – the Boeing 737 MAX.

The two accidents – one involving a Lion Air Flight 610 in October 2018, and another involving an Ethiopian Airline Flight 302 in March 2019 – precisely occurred 5 months apart. Initially, the accidents were attributed to human mistakes on the plane – pointing towards potential error by pilots navigating the birds. In a media interview in April 2019, the Chairman, President, and Chief Executive Officer (CEO) for Boeing, Dennis Muilenburg made it clear that,

‘I can tell you with confidence that we understand our planes, we understand how the design was accomplished, how the certification was accomplished and we remain fully confident in the product that we put in the field.’

Following more information coming out, as well as expert analyses of the two accidents, Boeing started shifting its narrative to accepting that the accidents were resultant of an error on its software system known as the Manoeuvring Characteristics Augmentation System (MCAS), installed on the 737 MAX, as part of the plane’s automated functions.

The 737 MAX became one of the sought after brand by renowned airlines in the world. However, the crashing down of Ethiopian Airline Flight 302 was the last straw for Boeing and several airlines to revisit the brand’s suitability for the market. In the following weeks, airlines across the world grounded the 737 MAX brand. Many others that placed orders of the plane’s brand eventually put their orders on hold - affecting the production line and the corporation’s financial revenue. Crises cost corporations financially much as it affects corporation’s reputation and clients’ emotions. These two accidents left Boeing with a US$1 billion damage to its bottom line, and 346 lives lost – delivering sad news to families of those who died, as well as shocking the world over.

Could it be that the plane was rushed into air to counter the Airbus, and keep Boeing competitive on the market?

Much as the corporate brand may not have suffered significant reputational damage, it can be contended that, at this moment, the world is holding its breath as to how Boeing will navigate around the future of the 737 MAX.

How has and how will Boeing move with the 737 MAX brand crisis? The grounding of the planes and shifting the official statement from the initial positioning showed that Boeing is embracing a more empathetic approach. Boeing further set aside funds to support victims of the two accidents. In July 2019, the Chairman, President and CEO said,

‘..the tragic loss of life in both accidents continue to weigh on all of us at Boeing, and we have the utmost sympathy for the loved ones of those on board.’

Boeing has assured the market that the MCAS is now fixed - and is assuring its customers of the safety of the plane. Regardless, it can be vied that Boeing will have trust issues with the 737 MAX brand. Consumer perception of the brand performance, now, is in bad taste. Once the MAX 737 is back in the skies, passengers will surely be curious to know what plane they have been booked on for their trip. Boeing needs to do a lot more than just assuring the market that the software system is fixed.

An organisational leader's demeanour during crises sets a tone on how the entire organisation responds in crisis moments. Would, having the Boeing CEO, flying intercontinental on the 737 MAX recoup the market and passenger trust in the plane brand (once reintroduced)?

Perhaps Boeing need to psychologically phase out the 737 MAX by upgrading and promoting a brand close to it - just may be that could erase the negative perceptions associated with the MAX 737 brand failure. Could a 737 MAX Plus be an ideal reincarnation?

#ReputationManagement #Boeing #BrandReputation #737MAX

Product recall for crisis management: Why should it be considered?

Product recall is costly, but taking the product off the market, corporation are potentially averting a major crisis whilst at the same time investing in consumer trust for future or continued relationship. Actually, corporations that recall products from the market are not only protecting their brand reputation (which may otherwise be badly affected if the product is left on the market), but also protecting their consumers from further harm. It is the best approach to reach out and own up for their oversight whilst steering clear of a reputation crisis.

Product recall is not a very recent or new phenomenon. For years, companies that care about their market and brand reputation have resorted to product recall once the first impacts of product malfunction are felt on the market. Even so, other corporations get to do it the hard way - when they are forced by consumer protection bodies or commissions to invoke or adopt such policies.

For companies that have built great brands, their brand reputation and its value-offering is their number one bank account from which they can ‘withdraw’ to protect their brand when things do not go well. As such, recalling products is one such effort to salvage brand reputation from any crises that may arise from product malfunctions. With issues mapping and crisis management plans in place, such corporations can (at the slightest signal of their brand having issues that may escalate into a crises), invoke a product recall policy.

In 2006, Dell, a leading global seller of personal computers at the time, was affected by a crisis in which its laptop computers were renowned for exploding. It all started with an article featured in an online technology news in June 2006. The article stated that a Dell Inc laptop exploded and went up in flames at a Japanese business conference. The cause of the explosion was from overheating batteries (which were supplied by Sony). It soon became apparent that the problem may have been rampant throughout the Dell laptop market. For example, as early as 2003, a Dell laptop caught fire in South Africa, causing second-degree burns to a fifteen-year-old girl. Again in July 2006, a truck in Nevada-USA, caught fire after a Dell laptop left in the cab of the vehicle exploded. The media frenzy around the issues after the June 2006 incident, coupled with increased public and stakeholder reaction, escalated the issues into a crisis to the extent that airlines started banning passengers from carrying Dell laptops with them.

Although delayed, Dell, in a joint initiative with Sony eventually recalled 4.1 million laptop batteries from its global market. Even though the recall cost approximately US $300 million, the beauty in it was that the industry regulations for making, transporting and using laptop batteries was scrutinised and has been improving since. The crisis eventually affected Dell’s market leadership for so many years, since.

As recent as June 2016, Toyota Motor Corp (Japan) recalled 3.37 million cars from the global market because of a possible deficiency affecting vehicles’ airbags and emission control units. No injuries have been associated with the manufacturing deficiency yet, but Toyota nevertheless took an initiative immediately to recall their vehicles before the issue could turn into a major talking point. It is yet to be seen how much more this plays out in terms of consumer trust and brand loyalty as Toyota Corporation has had many recalls in the recent years.

When executed promptly, product recall can not only serve corporations better in dealing with issues and avoiding crises, but also assist in retaining consumer trust and improving certain procedures in the production line. Product recall is in essence a corporation accepting responsibility for the problem and any crisis that may arise thereafter. Crises can affect the physical as well as the psychological wellbeing of consumers. It is therefore ethical for a corporation to recall product to reduce harm on its brand reputation, but most importantly for their consumers’ wellbeing. Although it can be an expensive undertaking, product recall positions a corporation’s actions as taking into account the fears, frustrations, anger and other emotions end-users may go through if they continued using the product.

Product recall expounds on the notion that the best actions in issues and crisis management must always be taken in the best interest of all parties that may be affected by issues and crises.

#BrandReputation #CrisisManagement #Marketing #PJElwyns #ReputationManagement #CorporateCulture