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Sending the wrong signal

Optimize Blog - July 15, 2010 - 0 comments

Hard on the heels of our last blog where we commented on BP’s inability to effectively manage it’s PR and communications in a crisis situation, we now have Apple making the exact same mistake although certainly their commercial crisis is not coupled with any environmental impact thank goodness.
The story revolves around the iPhone 4 and the annoying habit of a loss of reception and dropped calls should you hold the device incorrectly – not that previously we knew there was a way to hold one correctly….
Tests carried out this week by Consumer Reports confirmed a problem with the iPhone 4’s reception. In what was seen by many analysts as a blow to Apple, Consumer Reports said it could not recommend the phone to users.
Now, whilst this has not seemingly affected sales of the device – consumers just can’t get enough of the Apple brand – it has impacted the share price and importantly has concerned the analysts with Apple’s apparent arrogance over the issue. First there was denial and then a degree of acceptance but no real strategy to address the issue.
And then there is the matter of the email from Steve Jobs, Apple’s founder and CEO purportedly written to in a response to a question regarding the issue. Mr Jobs reply included the comment “You are getting all worked up over a few days of rumours. Calm down”.
We ask then “Is Apple the new Toyota?” becoming so big, arrogant and believing its own press that it forgets the basics of quality control. We should make no mistake, a recall for the iPhone 4 will cost probably in excess of $1.5 bn and certainly has the analysts concerned. This is a first for Apple and like Toyota, the company seems ill prepared and overly inward-focused relying on past achievements and defaulting to denial rather than proactive management of the situation.
Two weeks after finally accepting that there may be an issue with the iPhone signal Apple has called a surprise news conference so we will have to see what transpires but in business two weeks is a long time and the critics have been having a field day impacting the value of the company – the competition must be rubbing their hands with glee.
“It seems there has been a real crisis of leadership here,” said Patrick Kereley, senior digital strategist for Levick Strategic Communications which deals in crisis management and reputation protection. He goes on to say “There are so many conflicting reports about this issue and a lot of confusion in the marketplace. They need a plan of attack. Today’s companies have to react quickly before chatter on Facebook or Twitter turns into news headlines as is the case here”.
This reaffirms crisis management as one of the key tests of leadership and even more so in the current media rich business environment where every day counts. Apple has not given details regarding its news conference set for the 16th but here at Zeitgeist we’ll be looking at how the Apple leadership responds and what lessons there might be for us going forward……
Remember that “It won’t happen to me” is not a strategy.

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