Social media driving up crisis for Asian cos

Two-thirds of Asian businesses admit that digital and social media have driven up the cost of a crisis. However, a majority of Asian businesses said they do not have a crisis management plan in place, although they expect to be hit by one within a year.

A new digital crisis communications study, conducted by Burson-Marsteller, a leading global public relations and communications firm, and its sister firm Penn Schoen Berland, a global research-based consultancy, revealed risks and benefits of social media.

In Asia, the world’s fastest growing region for manufacturing, two-thirds (67 percent) of business decision-makers surveyed said they have experienced a crisis, with product safety issues ranking as the predominant source. In the coming year, a majority (53 percent) expects to have a product safety crisis, and two-thirds say digital and social media have driven up the cost of crisis. However, only 64 percent of respondents said they had a crisis management plan.

“With so many senior business leaders predicting a crisis with digital dimensions for their company and admitting their current lack of readiness, there is an urgent need for organizations in Asia to protect them by putting into place a modern crisis communications infrastructure,” said Bob Pickard, Burson-Marsteller’s Asia-Pacific chief executive.

“Social technology creates the power to make any local crisis explode onto the global stage, so every company needs to know what to do when things go wrong and this can only be achieved through planning and simulation before incidents occur,”  Pickard said.

Key findings from the study include:

• 81 percent of business decision-makers in Asia say new media is playing an increasing role in driving reputation during a crisis;
• 70 percent said the rise of digital communications has increased their company’s vulnerability to crisis;
• 66 percent believed new media, including social media, has significantly increased the costs of a crisis;
• 58 percent believed after a crisis, new media, including social media, has made it easier to recover from a crisis;
• Product safety (40 percent) and online/digital security (35 percent) are perceived as the greatest risks to reputation;
• 75 percent created their crisis communications plan after experiencing a crisis.

The study also found companies in Asia consider preparing for a crisis difficult because of the need to respond quickly, increased public demand for transparency, and the globalized nature of communications.

“The permeation of digital and social media across all customer and stakeholder segments means organizations must respond quickly, accurately, honestly and consistently across multiple channels,” said Charlie Pownall, managing director and Asia-Pacific lead digital strategist. “Despite identifying online and social media as a top crisis communications challenge, most companies in Asia do not monitor their reputations online, nor are prepared to manage crises on the Internet,”  Pownall said.