Restoring a damaged reputation
How do companies cope with a crisis on the scale of Samsung’s exploding Galaxy handsets and restore the reputation of their brand?
The comeback staged by the city of Matera is as good a way as any to illustrate the three phases of crisis management.
There are few places as enchantingly beautiful as the Sassi di Matera, an ancient city built into the rock of a steep ravine. The warren of natural caves attracts not only tourists from around the globe, but has also seduced filmmakers, from Pier Paolo Pasolini and Mel Gibson to Patty Jenkins.
It took several decades to transform Matera from a squalid, disease-ridden slum to a UNESCO World Heritage site, but the steps taken are the same that companies must implement in order to restore a tarnished reputation. Of course, companies need to be a lot more efficient and do not have the luxury of waiting 50 years to turn things around.
Here are the three phases:
1. Take responsibility: do not lock yourself into a state of denial
In crisis management, the first step is always to acknowledge that you have a problem and to take responsibility for it. In 1950, Italy’s Prime Minister Alcide de Gasperi admitted the situation in Matera was “shameful” and promised action.
It is important to be honest and transparent. Although it is easier to point the finger, accusing someone else always creates a negative impression.
2. Take action to stop it happening again
Within two years of De Gasperi’s statement, the Italian government began the phased relocation of the Sassi cave dwellers to other areas of the city. Admittedly it was a controversial move and many were unhappy with their new homes, but the vision was right.
Though divisive, the move provided a platform for the eventual regeneration of the Sassi. At first, squatters moved in, but gradually artisans, shopkeepers and young professionals took their place.
In 2016, Samsung overhauled their quality control procedures, introducing multi-layer safety measures and an eight-point battery check. They told the world what they were doing because keeping quiet would have had a much higher cost in terms of loss of consumer trust.
3. Innovate and promote
Matera’s new cave dwellers, after the squatters moved out, repaired crumbling roofs and installed modern plumbing. Completing Matera’s renaissance, the local and regional authorities began investing in tourism, with the help of the European Union and UNESCO.
In terms of raising Matera’s profile, it helps that a host of movies, ranging from Gibson’s ‘The Passion of the Christ’ to ‘Wonder Woman,’ were shot in the Sassi. A major promotional campaign is now underway after Matera defeated rival bids to become the European Capital of Culture for 2019.
Likewise, Samsung invested heavily in the quality, safety and craftsmanship of the new generation of Galaxy S8 devices. The Galaxy S8 is currently regarded as the best phone on the market.
An ostrich was the star of a multi-award winning advertisement that kicked off a major campaign for the Galaxy S8. At the time of writing, the video had more than 24 million views on YouTube.