Crisis Management Case Study … What Should BMW Do Now?
Why ARE parked BMWs spontaneously catching fire across the country? Owners demand answers as dozens of the luxury German cars burst into flames while the engines were OFF. This sounds like an awesome crisis management case study. It is especially true for loyal 25 years BMW owners, like me.
A new report finds more than 40 cases of US BMWs catching fire in the past five years. In each case, the cars were parked and not under recall by the German carmaker. Various models between one and 15 years old have been implicated in the ABC News report.
Is there a colossal crisis management issue brewing for BMW?
Does your business have a crisis management plan? Answer the following honestly now … what would you recommend for BMW with the looming issue? Specifically, the question is what BMW should do now.
It is just logical that as businesses engage with all sorts of customers, and no matter how good they are, they need to have contingency plans in place.
Contingencies for all sorts of problems, mistakes, and failures are required. How well they deal with these will determine whether they will be addressing a major crisis or a minor hiccup.
ABC News is reporting that there are multiple reports of parked BMWs catching fire in North America. All of the reports are coming from owners whose cars have been parked for various periods of time, ranging from hours to days. The cars have been catching fire while parked and turned off, which seems to be causing some confusion.
Concern over the safety of BMW cars is mounting in the wake of a new report that found dozens of examples of mysterious fires breaking out in vehicles that had been parked for as long as several days.
More than 40 parked BMWs that are not under an open recall have caught fire in the US over the past five years, with similar incidents in Sweden, China, India, and South Korea.
BMW initial response
BMW is denying that they’ve found ‘any pattern related to quality or component failure’ and says that out of the 4.9million vehicles it has on US roads, fire incidents are exceedingly rare.
After a spate of BMW fires in South Korea, a government investigation found a possible fuel leak, leading to a 1,700-car recall, but it is unknown if the American fires are related to that issue.
BMW has commented on the matter, stating that “With approximately 4.9 million BMW vehicles on U.S. roads, fire incidents involving BMWs are very rare. BMW takes every incident very seriously and has a dedicated team prepared to work with BMW owners, insurance companies, and authorities to investigate any vehicle fire incident that is brought to our attention.”
With the cars parked and the engines off, there’s typically very little to start a fire other than an electrical issue, due to maybe a damaged wire or improperly secured battery terminal. Though, BMW claims it’s investigated these instances and claims that it hasn’t seen and product defect-related patterns. To be fair, it must be incredibly difficult to spot a pattern, due to the wide variety of vehicles that are reported in these incidents. The BMWs involved in these fires range from 1-15 years old, so electrical systems, chassis and engines vary greatly.
Here’s BMW’s full statement:
We at BMW empathize with anyone who has experienced a vehicle fire. We understand it is a traumatic event and the safety of our customers is of utmost importance to us.
BMW has a long reputation for engineering excellence and is known as a pioneer in safety technology. We have full confidence in our products and strive always to provide the best possible owner’s experience.
With approximately 4.9 million BMW vehicles on U.S. roads, fire incidents involving BMWs are extremely rare. BMW takes every incident very seriously and has a team dedicated to working with BMW owners, insurance companies and authorities to investigate vehicle fire incidents brought to our attention.
We have investigated and in some cases inspected the vehicles identified by ABC News. These vehicles span an age range of 1-15 years, accumulated mileage of up to 232,250 miles and multiple generations and model types. In cases that we have inspected and can determine root cause, we have not seen any pattern related to quality or component failure. Vehicle fires can result from a wide variety of external reasons and can range from improper accident damage repair, unauthorized aftermarket modifications (such as remote starters, stereo installations, etc.), previous vehicle flooding, rodent nesting, lack of, or improper preventative maintenance and even arson.
So what now, BMW?
Why not use the FMEA or FMECA process and keep owners up to speed with results?
Failure Mode and Effects Analysis (FMEA) and Failure Modes, Effects and Criticality Analysis (FMECA) are methodologies designed to identify potential failure modes. They apply for a product or process, to assess the risk associated with those failure modes and to rank the issues regarding importance. They are also used to identify and carry out corrective actions to address the most serious concerns.
Although the purpose, terminology and other details can vary according to type (e.g. Process FMEA, Design FMEA, etc.), the basic methodology is similar for all. Are you implementing this process, BMW? What have you learned?
Keep customers informed as to your actions
We live in a world where the truth can be uncovered quickly. Being caught lying about your organization’s inappropriate actions can devastate your organization. Attempted cover-ups can turn a reporter into a folk hero. The payoff for uncovering organizational wrongdoing is huge.
Organizations have less than a day to tell their version of the truth. After that, the media and other external stakeholders will have tapped into secondary and tertiary experts who will have their views on what has happened.
Keep your cool
There will indeed be cases where illegitimate feeds of information will somehow seep into the airwaves, giving false information or unsourced explanations surrounding the crisis.
While it’s tempting to react aggressively towards these feeds by attempts to censor the information or threaten legal action, it is advisable that you don’t. Doing so could further chink the integrity of your brand and lead users to think you have something to hide.
Keep employees and dealers in the loop
After the smoke has cleared, employees often claim they were not able to find out what was going on in their organization while the crisis was occurring.
You do not want your employees, especially the dealers, to have to rely on the evening news as their source of information about their company. It is demeaning and dangerous to discount those who will be key to your organization’s survival.
Designate one spokesperson and surround him with experts
The easiest way to deliver a consistent message during a crisis is to have one senior executive as a spokesperson. To this end, all senior executives should go through crisis communication training. The lessons are invaluable and relatively easy to learn. When a crisis hits, the spokesperson should be surrounded by experts who can elaborate on answers to technical questions.
Crisis management case study … steer the conversation
In times of negativity, social media will often be the first place customers head to – not just for information, but to give their insight and perhaps even bash your brand in the process.
Don’t let the conversation get out of control – decide on an appropriate hashtag for the events to follow and use this as a symbol across all your platforms for all trustworthy, reliable and honest information surrounding the crisis.
Doing this from the very beginning will not only inhibit people from devising their illegitimate hashtags which can confuse customers. It will ensure your brand is the leading, go-to source of information for everything to do with the crisis.
Crisis management case study … timing is everything
Communications with customers on issues at hand is all about timing. Waste no time diving into the conversation the moment a crisis strikes, and silence should NOT be an option. The sooner you can prove to customers that you are present and dedicated to addressing an issue; you will earn your customers’ trust.
If possible, making customers aware of a potential product issue like this one, before it has even happened is highly advised. Not only will this show transparency and garner more respect for your brand; it will also give you a chance to offer instructions to customers and allow them to make appropriate preparations for the storm.
Make time to learn when post-crisis has passed
When the threshold of the crisis has passed, and business is returning to normal, there is a tendency to want to move on, to get past the trauma that has occurred, to get back to the typical rhythm of business and leave the crisis behind. But, when you do this, you miss extraordinary opportunities for organizational learning.
The details that will enable your organization to do better next time are best captured when they are fresh, whether through focused meetings of groups of crisis respondents or through individual discussions with internal and external stakeholders who took part in the crisis response.
The time invested in examining what happened, and making adjustments to plans and practices, can pay off when the next crisis occurs, or when you are fortunate enough to be able to avert the next crisis.
The bottom line
What is most important is that you create a crisis management plan when everything is running smoothly, and everyone involved can think clearly. By planning in advance, all parties will have time to seriously think about the ideal ways to manage different types of crises.
As you develop your crisis management plan, seek advice from the experts that include your leadership team, employees, customers, communications experts, investment bankers, exit planners, lawyers and financial managers. Each of these individuals can provide you valuable insight that could be critical should a crisis strike your company.
A quick, honest, full disclosure response to a crisis is the best way of controlling damage, maintaining the trust of your customer base and minimizing loss of sales, which in most cases is inevitable.
All that’s left then is to deliver a trustworthy, responsible and genuinely useful stream of updates that your customers can truly depend on.
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Mike Schoultz is the founder of Digital Spark Marketing, a digital marketing and customer service agency. With 40 years of business experience, he blogs on topics that relate to improving the performance of your business. Find them on G+, Twitter, and LinkedIn.
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