- Crisis Management
As Japan sorts through three separate disasters: the earthquake, the tsunami, and the potential nuclear meltdown, the media has focused on the disaster appropriately from the perspective of lives lost, and the potential for things to get even worse. Lost to the back pages, however, is a potential disaster looming in the background for Tokyo Electric Power Company (TEPCO).
For those of you old enough to remember, we have seen this kind of disaster in the making before at Three Mile Island (TMI) in 1979. I was just starting my career when this accident unfolded on my birthday that year. All of us held our breath as one of the worst handled crises turned into a media frenzy of oversized proportions as a result of poorly handled corporate communications and a popular movie (The China Syndrome, which had come out only two weeks before about a nuclear meltdown and cover up). What can TEPCO learn from that crisis, and how can TEPCO and Japan seize the opportunity that lurks right around the corner in every crisis?
Here are five opportunities waiting for TEPCO to carpe diem on.
Opportunity #1: Both TEPCO and the Japanese government have an opportunity to seize the moment and capitalize on the desire of Japanese society to act as one to rebuild Japan. Clearly, Prime Minister Kan gets this by his declaration that he is personally taking responsibility for the site. This is similar to then-Pennsylvania Governor Dick Thornburgh’s heroic efforts at TMI. TEPCO, on the other hand, is notorious for its cover-ups during previous crises. What kind of company does TEPCO want to be in the Japan that will emerge post crisis?
Opportunity #2: TEPCO also has an opportunity to gain credibility and demonstrate that it cares about being a trustworthy institution. Commonwealth Edison was slow to understand this at TMI, but they eventually did through a strong collaboration with government and media. TEPCO, on the other hand, has been criticized for using language like “might” or “may have” rather than definitive language. The people of Japan want to know the truth about what is going on, and then want to be able to make the right decisions for themselves and their families.
Opportunity #3: To tell it all and tell it fast. The Japanese are known for using euphemisms and not directly acknowledging crises when they are happening. Reporters at a TEPCO briefing earlier this week lost their temper because of ritual apologies rather than hard answers to tough questions. Culture needs to take a back seat to the realities of this situation. At TMI, everyone soon realized that it was easier to tell the whole story and tell it fast (thank you Frank Corrado!) rather than let information drip out behind a barrage of euphemism in the midst of a media circus.
Opportunity #4: To work with government to solve this crisis. Problems of this magnitude need the support of government. Imagine if the World Trade Center had not collaborated with the US and NYC government after 9/11. Instead politicians are relying on TEPCO for information. In a telling outburst, Prime Minister Kan berated power company officials for not informing the government of two explosions at the plant earlier this week. “What in the world is going on?” said Kan in front of journalists stating that he saw television reports of the explosions before he heard about them from TEPCO.
Opportunity #5: To learn from your mistakes. After the Three Mile Island crisis, so much was written about the incident that it became textbook fodder for how to deal with a crisis of major proportions. Why, for example, in the 21st Century did it take TEPCO until Monday to assemble a dedicated crisis management team? This learning is so basic, so obvious, that we gloss over it in textbooks today.
I lived in Japan for over a year in the late ‘80s and early ‘90s, and I was supposed to be there this week. My heart goes out to my Japanese friends and colleagues as they face this disaster. Let’s hope that TEPCO can fix the problem and avoid a major and horrific disaster. In the meantime, however, they could do the Japanese and the world a favor and tell us what is really happening inside those reactors.
Professor Paul Argenti
Tuck School of Business
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