Monday, January 31, 2011
Giving Away the Razor, Selling the Blades
The curious strategy of loss-leader marketing
One day I opened up my mailbox, and there inside was a box from Gillette containing a brand-new Mach3 razor. It turned out that the box was addressed to my neighbor, which is just as well: the idea of shaving with a triple-blade razor seemed a bit—excuse me—over the edge. That was just a few years ago, and since then, the Mach3 has been superseded by models with four and five blades, with or without a vibrating feature—the mind boggles. But the twin-blade Gillette SensorExcel razor I used for many years also came in the mail for free, and also, coincidentally, wasn’t addressed to me—I got it from a friend who didn’t want it. Still, exactly as Gillette hoped, I spent many, many dollars over the years on their obscenely overpriced blades before breaking down and buying an electric razor. Like countless other people, I was sucked in by the “give-away-the-razor-sell-the-blades” concept. Old-fashioned and counterintuitive, this marketing gimmick is still going strong.
Razor-Thin Profit Margins
Around 1900, a salesman named King Camp Gillette dreamed up the idea of disposable razor blades. Before that time, razor blades were thicker and were simply sharpened when dull—a time-consuming and imprecise (not to mention dangerous) process that no one enjoyed. Gillette’s innovation was to make the blades thin enough and inexpensive enough that they could simply be thrown away when they dulled. At first, he couldn’t sell the blades for as much money as it cost to make them, but then he had a wacky idea: he would give away the razor handles. People who got them perceived them as being valuable—but only when fitted with one of Gillette’s blades. So there was a subtle yet forceful psychological pressure to maintain that value by continually buying the blades. After a few months of blade sales, the cost of the handle was recovered and Gillette began to make a profit. Within a decade, Gillette’s company dominated the razor market and made its inventor extremely wealthy.
Nowadays, Gillette’s strategy has been—excuse me again—honed to a new level of sophistication. Each new model of razor has a unique design such that only blade refills made to those exact specifications will fit. When possible, the designs are patented so that third parties are prevented from selling their own refills; Gillette, meanwhile, charges a small fortune for their blades, and customers dutifully buy them. Predictably, when a patent expires, opening the market for generic competitors, Gillette releases a new design, along with a new marketing campaign geared toward making people with last year’s model feel like they’re no longer—sorry—on the cutting edge.
The Leading Edge
This strategy is technically a form of what’s called “loss-leader” marketing. In general terms, a loss leader is a product sold at a loss in order to generate secondary sales later on. In some cases, a loss-leader product doesn’t produce dependencies that lead to other sales directly, but rather builds brand image and goodwill among customers, in hopes that this will indirectly produce sales later on. In other cases, products are sold at a loss strictly to gain market share or monopolize shelf space; profits come from upgrades, add-ons, or other secondary sales.
One of the most common implementations of loss-leader marketing is cell phones. Almost every day I see an ad in a newspaper or magazine advertising a cell phone for free (or some trivially small amount of money), even though I know they cost quite a bit to manufacture. In this case, the “blades” are the monthly service fees. The cell phone company expects to recoup the cost of the phone—and then some—by selling you air time. Distributors guarantee they won’t lose money by building a clause into the contract stipulating that you must pay a “cancellation fee”—in other words, the cost of the phone—if you discontinue service before your contract expires.
Give Away This, Sell That
Any product that requires a service plan, periodic upgrades, or consumable refills is ripe for this type of marketing approach. Satellite TV providers will sometimes install an antenna on your roof and a receiver in your living room for free, as long as you make a one-year commitment to pay for monthly service. Another example is color inkjet printers, which used to be fairly expensive but now routinely sell for well under US$100. Replacement ink cartridges, however, often cost an arm and a leg, in some cases making your total cost per page higher over the long run than if you’d purchased a more expensive laser printer. But my favorite new implementation of “give-away-the-razor-sell-the-blades” comes from the Italian coffee company Illy. Illy offers a subscription program whereby you can receive two to six cans of gourmet coffee in the mail every month. But they also offer a special twist: you can buy a high-end espresso machine at a savings of about US$450 if you commit to a one-year membership. If I didn’t already have an even fancier espresso machine, I’d be all over that program.
It’s not just physical products that work with this sort of scheme either. Countless software developers, Web sites, and internet services follow the same model. If a company is giving away a product for free—whether it’s a Web browser, a news service, music, or whatever—it’s a fairly safe bet that there’s some moneymaking plan behind it, which may very well be a loss-leader strategy. Hmmmm, come to think of it, my company gives away digital products for free—including the very article you’re now reading—in order to produce advertising revenue and promote sales of subscriptions, audio recordings, merchandise, and so on. Has it worked? You’d better believe it. This strategy brings in enough money every month to buy inkjet refills and pay for my coffee subscription. —Joe Kissell
One day I opened up my mailbox, and there inside was a box from Gillette containing a brand-new Mach3 razor. It turned out that the box was addressed to my neighbor, which is just as well: the idea of shaving with a triple-blade razor seemed a bit—excuse me—over the edge. That was just a few years ago, and since then, the Mach3 has been superseded by models with four and five blades, with or without a vibrating feature—the mind boggles. But the twin-blade Gillette SensorExcel razor I used for many years also came in the mail for free, and also, coincidentally, wasn’t addressed to me—I got it from a friend who didn’t want it. Still, exactly as Gillette hoped, I spent many, many dollars over the years on their obscenely overpriced blades before breaking down and buying an electric razor. Like countless other people, I was sucked in by the “give-away-the-razor-sell-the-blades” concept. Old-fashioned and counterintuitive, this marketing gimmick is still going strong.
Razor-Thin Profit Margins
Around 1900, a salesman named King Camp Gillette dreamed up the idea of disposable razor blades. Before that time, razor blades were thicker and were simply sharpened when dull—a time-consuming and imprecise (not to mention dangerous) process that no one enjoyed. Gillette’s innovation was to make the blades thin enough and inexpensive enough that they could simply be thrown away when they dulled. At first, he couldn’t sell the blades for as much money as it cost to make them, but then he had a wacky idea: he would give away the razor handles. People who got them perceived them as being valuable—but only when fitted with one of Gillette’s blades. So there was a subtle yet forceful psychological pressure to maintain that value by continually buying the blades. After a few months of blade sales, the cost of the handle was recovered and Gillette began to make a profit. Within a decade, Gillette’s company dominated the razor market and made its inventor extremely wealthy.
Nowadays, Gillette’s strategy has been—excuse me again—honed to a new level of sophistication. Each new model of razor has a unique design such that only blade refills made to those exact specifications will fit. When possible, the designs are patented so that third parties are prevented from selling their own refills; Gillette, meanwhile, charges a small fortune for their blades, and customers dutifully buy them. Predictably, when a patent expires, opening the market for generic competitors, Gillette releases a new design, along with a new marketing campaign geared toward making people with last year’s model feel like they’re no longer—sorry—on the cutting edge.
The Leading Edge
This strategy is technically a form of what’s called “loss-leader” marketing. In general terms, a loss leader is a product sold at a loss in order to generate secondary sales later on. In some cases, a loss-leader product doesn’t produce dependencies that lead to other sales directly, but rather builds brand image and goodwill among customers, in hopes that this will indirectly produce sales later on. In other cases, products are sold at a loss strictly to gain market share or monopolize shelf space; profits come from upgrades, add-ons, or other secondary sales.
One of the most common implementations of loss-leader marketing is cell phones. Almost every day I see an ad in a newspaper or magazine advertising a cell phone for free (or some trivially small amount of money), even though I know they cost quite a bit to manufacture. In this case, the “blades” are the monthly service fees. The cell phone company expects to recoup the cost of the phone—and then some—by selling you air time. Distributors guarantee they won’t lose money by building a clause into the contract stipulating that you must pay a “cancellation fee”—in other words, the cost of the phone—if you discontinue service before your contract expires.
Give Away This, Sell That
Any product that requires a service plan, periodic upgrades, or consumable refills is ripe for this type of marketing approach. Satellite TV providers will sometimes install an antenna on your roof and a receiver in your living room for free, as long as you make a one-year commitment to pay for monthly service. Another example is color inkjet printers, which used to be fairly expensive but now routinely sell for well under US$100. Replacement ink cartridges, however, often cost an arm and a leg, in some cases making your total cost per page higher over the long run than if you’d purchased a more expensive laser printer. But my favorite new implementation of “give-away-the-razor-sell-the-blades” comes from the Italian coffee company Illy. Illy offers a subscription program whereby you can receive two to six cans of gourmet coffee in the mail every month. But they also offer a special twist: you can buy a high-end espresso machine at a savings of about US$450 if you commit to a one-year membership. If I didn’t already have an even fancier espresso machine, I’d be all over that program.
It’s not just physical products that work with this sort of scheme either. Countless software developers, Web sites, and internet services follow the same model. If a company is giving away a product for free—whether it’s a Web browser, a news service, music, or whatever—it’s a fairly safe bet that there’s some moneymaking plan behind it, which may very well be a loss-leader strategy. Hmmmm, come to think of it, my company gives away digital products for free—including the very article you’re now reading—in order to produce advertising revenue and promote sales of subscriptions, audio recordings, merchandise, and so on. Has it worked? You’d better believe it. This strategy brings in enough money every month to buy inkjet refills and pay for my coffee subscription. —Joe Kissell
Essays by Julian Assange- His logic and reasoning.
CRYPTOME -10 July 2010
These essays on conspiracies by Julian Assange (me@iq.org) were retrieved website iq.org. The first from
Novermber 10, 2006, and the second at archive.org, dated December 3, 2006.
http://iq.org/conspiracies.pdf
http://web.archive.org/web/20070110200827/http://iq.org/conspiracies.pdf
Julian Assange: http://web.archive.org/web/20071020051936/http://iq.org/
Sun 31 Dec 2006 : The non linear effects of leaks on unjust systems of governance
You may want to read The Road to Hanoi or Conspiracy as Governance [second
essay following]; an obscure motivational document, almost useless in light of its
decontextualization and perhaps even then. But if you read this latter document
while thinking about how different structures of power are differentially affected
by leaks (the defection of the inner to the outer) its motivations may become clearer.
The more secretive or unjust an organization is, the more leaks induce fear and
paranoia in its leadership and planning coterie. This must result in minimization of efficient internal communications mechanisms (an increase in cognitive "secrecy tax") and consequent system-wide cognitive decline resulting in decreased ability to hold onto power as the environment demands adaption.
Hence in a world where leaking is easy, secretive or unjust systems are nonlinearly hit relative to open, just systems. Since unjust systems, by their nature induce opponents, and in many places barely have the upper hand, mass leaking leaves them exquisitely vulnerable to those who seek to replace them with more open forms of governance.
Only revealed injustice can be answered; for man to do anything intelligent he has to know what's actually going on.
More: http://web.archive.org/web/*/http://iq.org
State and Terrorist Conspiracies
me @ iq.org
November 10, 2006
Behind the ostensible government sits enthroned an invisible government owing no allegiance and acknowledging no responsibility to the people. To destroy this invisible government, to befoul this unholy alliance between corrupt business and corrupt politics is the first task of statesmanship.
(President Theodore Roosevelt)
While you here do snoring lie,Open-eyed conspiracy His time doth take.
(The Tempest; Ariel at II, i)
Introduction
To radically shift regime behavior we must think clearly and boldly for if wehave lea rned anything, it is that regimes do not want to be changed. We must think beyond those who have gone before us, and discover technological changes that embolden us with ways to act in which our forebears could not.
Firstly we must understand what aspect of government or neocorporatist behavior we wish to change or remove. Secondly we must develop a way of thinking about this behavior that is strong enough carry us through the mire of politically distorted language, and into a position of clarity. Finally must use these insights to inspire within us and others a course of ennobling, and effective action.
Authoritarian power is maintained by conspiracy Conspiracy, Conspire: make secret plans jointly to commit a harmful act; working together to bring about a particular result, typically to someone’s detriment. ORIGIN late Middle English : from Old French conspirer, from Latin conspirare agree, plot, from con- together with spirare breathe.
The best party is but a kind of conspiracy against the rest of the nation. (Lord Halifax)
1Where details are known as to the inner workings of authoritarian regimes,
we see conspiratorial interactions among the political elite not merely for preferment
or favor within the regime but as the primary planning methodology behind
maintaining or strengthening authoritarian power.
Authoritarian regimes give rise to forces which oppose them by pushing
against the individual and collective will to freedom, truth and self realization.
Plans which assist authoritarian rule, once discovered, induce resistance. Hence
these plans are concealed by successful authoritarian powers. This is enough to
define their behavior as conspiratorial.
Thus it happens in matters of state; for knowing afar off (which
it is only given a prudent man to do) the evils that are brewing,
they are easily cured. But when, for want of such knowledge, they
are allowed to grow until everyone can recognize them, there is no
longer any remedy to be found.
(The Prince, Niccolo Machiavelli [1469-1527])
Terrorist conspiracies as connected graphs
Pre and post 9/11 the Maryland Procurement Office (National Security Agency
light cover for academic funding, google for grant code “MDA904”) and others
have funded mathematicians to look at terrorist conspiracies as connected graphs
(no mathematical background is needed to follow this article).
We extend this understanding of terrorist organizations and turn it on the
likes of its creators where it becomes a knife to dissect the power conspiracies
used to maintain authoritarian government.
We will use connected graphs as way to harness the spatial reasoning ability
of the brain to think in a new way about political relationships. These graphs are
easy to visualize. First take some nails (“conspirators”) and hammer them into
a board at random. Then take twine (“communication”) and loop it from nail
to nail without breaking. Call the twine connecting two nails a link. Unbroken
twine means it is possible to travel from any nail to any other nail via twine and
intermediary nails. Mathematicians say the this type of graph is connected.
Information flows from conspirator to conspirator. Not every conspirator
trusts or knows every other conspirator even though all are connected. Some
are on the fringe of the conspiracy, others are central and communicate with
many conspirators and others still may know only two conspirators but be a
bridge between important sections or groupings of the conspiracy.
Separating a conspiracy
If all links between conspirators are cut then there is no conspiracy. This is
usually hard to do, so we ask our first question: What is the minimum number
of links that must be cut to separate the conspiracy into two groups of equal
number? (divide and conquer). The answer depends on the structure of the
2conspiracy. Sometimes there are no alternative paths for conspiratorial information
to flow between conspirators, othertimes there are many. This is a useful
and interesting characteristic of a conspiracy. For instance, by assassinating one
“bridge” conspirator, it may be possible to split the conspiracy. But we want
to say something about all conspiracies.
Some conspirators dance closer than others
Conspirators are discerning, some trust and depend each other, others say little.
Important information flows frequently through some links, trivial information
through others. So we expand our simple connected graph model to include not
only links, but their “importance”.
Return to our board-and-nails analogy. Imagine a thick heavy cord between
some nails and fine light thread between others. Call the importance, thickness
or heaviness of a link its weight. Between conspirators that never communicate
the weight is zero. The “importance” of communication passing through a
link difficult to evaluate apriori, since it its true value depends on the outcome
of the conspiracy. We simply say that the “importance” of communication
contributes to the weight of a link in the most obvious way; the weight of a
link is proportional to the amount of important communication flowing across
it. Questions about conspiracies in general won’t require us to know the weight
of any link, since that changes from conspiracy to conspiracy.
Conspiracies are cognitive devices. They are able to out
think the same group of individuals acting alone
Conspiracies take information about the world in which they operate (the conspiratorial
environment), pass it around the conspirators and then act on the
result. We can see conspiracies as a type of device that has inputs (information
about the environment) and outputs (actions intending to change or maintain
the environment).
What does a conspiracy compute? It computes the next
action of the conspiracy
Now I we ask the question: how effective is this device? Can we compare it to
itself at different times? Is the conspiracy growing stronger or weakening? This
is a question that asks us to compare two values.
Can we find a value that describes the power of a conspiracy?
We could count the number of conspirators, but that would not capture the
difference between a conspiracy and the individuals which comprise it. How do
they differ? Individuals in a conspiracy conspire. Isolated individuals do not.
We can capture that difference by adding up all the important communication
3
power.
Total conspiratorial power
This number is an abstraction. The pattern of connections in a conspiracy
is unusually unique. But by looking at this value which in indepndent of the
arrangement of conspiratorial connections we can make some generalisations.
If total conspiratorial power is zero, there is no conspiracy
If total conspiratorial power is zero, there is no information flow between the
conspirators and hence no conspiracy.
A substantial increase or decrease in total conspiratorial power almost always
means what we expect it to mean; an increase or decrease in the ability of the
conspiracy to think, act and adapt.
Separating weighted conspiracies
I now return to our earlier idea about cleaving a conspiracy into halves. Then
we looked at dividing a conspiracy into two groups of equal numbers by cutting
the links between conspirators. Now we see that a more interesting idea is to
split the total conspiratorial power in half. Since any isolated half can be viewed
as a conspiracy in its own right we can continue splitting indefinitely.
How can we reduce the ability of a conspiracy to act?
We can marginalise a conspiracy’s ability to act by decreasing total conspiratorial
power until it is no longer able to understand, and hence respond effectively
to, its environment.
We can split the conspiracy, reduce or eliminating important communication
between a few high weight links or many low weight links.
Traditional attacks on conspiratorial power groupings, such as assassination,
have cut high weight links by killing, kidnapping, blackmailing or otherwise
marginalizing or isolating some of the conspirators they were connected to.
An authoritarian conspiracy that can not think efficiently,
can not act to preserve itself against the opponents it induces
When we look at a conspiracy as an organic whole, we can see a system of
interacting organs, a body with arteries and veins whos blood may be thickened
and slowed till it falls, unable to sufficiently comprehend and control the forces
in its environment.
4
Conspiracy as Governance
me @ iq.org
December 3, 2006
Conspiracy, Conspire: make secret plans jointly to commit
a harmful act; working together to bring about a particular
result, typically to someone’s detriment. ORIGIN
late Middle English : from Old French conspirer, from
Latin conspirare agree, plot, from con- together with spirare
breathe. (OED)
The best party is but a kind of conspiracy against the rest
of the nation. (Lord Halifax)
Security gives way to conspiracy.
(Julius Caesar, act 2, sc. 3. The
soothsayer’s message, but Caesar is too busy to look at it)
Introduction
To radically shift regime behavior we must think clearly and boldly for if we
have learned anything, it is that regimes do not want to be changed. We must
think beyond those who have gone before us and discover technological changes
that embolden us with ways to act in which our forebears could not.
We must understand the key generative structure of bad governance1
We must develop a way of thinking about this structure that is strong enough
to carry us through the mire of competing political moralities and into a position
of clarity.
Most importantly, we must use these insights to inspire within us and others
a course of ennobling and effective action to replace the structures that lead to
bad governance with something better.
1Everytime we witness an act that we feel to be unjust and do not act we become a party
to injustice. Those who are repeatedly passive in the face of injustice soon find their character
corroded into servility. Most witnessed acts of injustice are associated with bad governance,
since when governance is good, unanswered injustice is rare. By the progressive diminution
of a people’s character, the impact of reported, but unanswered injustice is far greater than
it may initially seem. Modern communications states through their scale, homogeneity and
excesses provide their populace with an unprecidented deluge of witnessed, but seemingly
unanswerable injustices.
Conspiracy as governance in authoritarian regimes
Where details are known as to the inner workings of authoritarian regimes, we
see conspiratorial interactions among the political elite, not merely for preferment
or favor within the regime, but as the primary planning methodology
behind maintaining or strengthening authoritarian power.
Authoritarian regimes create forces which oppose them by pushing against a
people’s will to truth, love and self-realization. Plans which assist authoritarian
rule, once discovered, induce further resistance. Hence such schemes are concealed
by successful authoritarian powers until resistance is futile or outweighed
by the efficiencies of naked power. This collaborative secrecy, working to the
detriment of a population, is enough to define their behavior as conspiratorial.
Thus it happens in matters of state; for knowing afar off (which
it is only given a prudent man to do) the evils that are brewing,
they are easily cured. But when, for want of such knowledge, they
are allowed to grow until everyone can recognize them, there is no
longer any remedy to be found.
(The Prince, Niccolo Machiavelli [1469-1527])
Terrorist conspiracies as connected graphs
Pre and post 9/11 the Maryland Procurement Office2 and others have funded
mathematicians to look at terrorist conspiracies as connected graphs (no mathematical
background is needed to follow this article).
We extend this understanding of terrorist organizations and turn it on the
likes of its paymasters; transforming it into a knife to dissect the conspiracies
used to maintain authoritarian power structures.
We will use connected graphs as a way to apply our spatial reasoning abilities
to political relationships. These graphs are very easy to visualize. First take
some nails (“conspirators”) and hammer them into a board at random. Then
take twine (“communication”) and loop it from nail to nail without breaking.
Call the twine connecting two nails a link. Unbroken twine means it is possible
to travel from any nail to any other nail via twine and intermediary nails.
Mathematicians say that this type of graph is connected.
Information flows from conspirator to conspirator. Not every conspirator
trusts or knows every other conspirator even though all are connected. Some
are on the fringe of the conspiracy, others are central and communicate with
many conspirators and others still may know only two conspirators but be a
bridge between important sections or groupings of the conspiracy.
Separating a conspiracy
If all conspirators are assassinated or all the links between them are destroyed,
then a conspiracy no longer exists. This is usually requires more resources than
2National Security Agency light cover for academic funding, google for grant code
“MDA904”
2
we can deploy, so we ask our first question: What is the minimum number
of links that must be cut to separate the conspiracy into two groups of equal
number? (divide and conquer). The answer depends on the structure of the
conspiracy. Sometimes there are no alternative paths for conspiratorial information
to flow between conspirators, othertimes there are many. This is a useful
and interesting characteristic of a conspiracy. For instance, by assassinating one
“bridge” conspirator, it may be possible to split a conspiracy. But we want to
say something about all conspiracies.
Some conspirators dance closer than others
Conspirators are often discerning, for some trust and depend each other, while
others say little. Important information flows frequently through some links,
trivial information through others. So we expand our simple connected graph
model to include not only links, but their “importance”.
Return to our board-and-nails analogy. Imagine a thick heavy cord between
some nails and fine light thread between others. Call the importance, thickness
or heaviness of a link its weight. Between conspirators that never communicate
the weight is zero. The “importance” of communication passing through a
link is difficult to evaluate apriori, since its true value depends on the outcome
of the conspiracy. We simply say that the “importance” of communication
contributes to the weight of a link in the most obvious way; the weight of a
link is proportional to the amount of important communication flowing across
it. Questions about conspiracies in general won’t require us to know the weight
of any link, since that changes from conspiracy to conspiracy.
Conspiracies are cognitive devices. They are able to outthink
the same group of individuals acting alone
Conspiracies take information about the world in which they operate (the conspiratorial
environment), pass through the conspirators and then act on the
result. We can see conspiracies as a type of device that has inputs (information
about the environment), a computational network (the conspirators and their
links to each other) and outputs (actions intending to change or maintain the
environment).
Deceiving conspiracies
Since a conspiracy is a type of cognitive device that acts on information acquired
from its environment, distorting or restricting these inputs means acts based on
them are likely to be misplaced. Programmers call this effect garbage in, garbage
out.
Usually the effect runs the other way; it is conspiracy that is the agent of
deception and information restriction. In the US, the programmer’s aphorism
is sometimes called “the Fox News effect”.
3
What does a conspiracy compute? It computes the next
action of the conspiracy
Now we ask the question: how effective is this device? Can we compare it to
itself at different times? Is the conspiracy growing stronger or is it weakening?
This question asks us to compare two values over time.
Can we find a value that describes the power of a conspiracy?
We could count the number of conspirators, but that would not capture the key
difference between a conspiracy and the individuals which comprise it. How do
they differ? In a conspiracy, individuals conspire, while when isolated they do
not. We can show most of this difference by adding up all the important communication
(weights) between all the conspirators. Call this total conspiratorial
power.
Total conspiratorial power
This number is an abstraction. The pattern of connections in a conspiracy is
usually unique. But by looking at a value that is independent of the arrangement
of connections between conspirators we can say something about conspiracies
in general.
If total conspiratorial power is zero, there is no conspiracy
If total conspiratorial power is zero, then clearly there is no information flow
between the conspirators and hence no conspiracy.
A substantial increase or decrease in total conspiratorial power almost always
means what we expect it to mean; an increase or decrease in the ability of the
conspiracy to think, act and adapt.
Separating weighted conspiracies
We now return to our earlier idea about cleaving a conspiracy into halves. Then
we looked at dividing a conspiracy into two groups of equal numbers by cutting
the links between conspirators. Now we see that a more interesting idea is to
split the total conspiratorial power in half. Since any isolated half can be viewed
as a conspiracy in its own right we can continue separating indefinitely.
Throttling weighted conspiracies
Instead of cutting links between conspirators so as to separate a weighted conspiracy
we can achieve a similar effect by throttling the conspiracy — constricting
(reducing the weight of) those high weight links which bridge regions of
equal total conspiratorial power.
4
Attacks on conspiratorial cognitive ability
A man in chains knows he should have acted sooner for his ability to influence
the actions of the state is near its end. To deal with powerful conspiratorial
actions we must think ahead and attack the process that leads to them since
the actions themselves can not be dealt with.
We can deceive or blind a conspiracy by distorting or restricting the information
available to it.
We can reduce total conspiratorial power via unstructured attacks on links
or through throttling and separating.
A conspiracy sufficiently engaged in this manner is no longer able to comprehend
its environment and plan robust action.
Traditional vs. modern conspiracies
Traditional attacks on conspiratorial power groupings, such as assassination,
cut many high weight links. The act of assassination — the targeting of visible
individuals, is the result of mental inclinations honed for the pre-literate societies
in which our species evolved.
Literacy and the communications revolution have empowered conspirators
with new means to conspire, increasing the speed of accuracy of the their interactions
and thereby the maximum size a conspiracy may achieve before it
breaks down.
Conspirators who have this technology are able to out conspire conspirators
without it. For the same costs they are able to achieve a higher total conspiratorial
power. That is why they adopt it.
For example, remembering Lord Halifax’s words, let us consider two closely
balanced and broadly conspiratorial power groupings, the US Democratic and
Republican parties.
Consider what would happen if one of these parties gave up their mobile
phones, fax and email correspondence — let alone the computer systems which
manage their subscribes, donors, budgets, polling, call centres and direct mail
campaigns?
They would immediately fall into an organizational stupor and lose to the
other.
An authoritarian conspiracy that cannot think is powerless
to preserve itself against the opponents it induces
When we look at an authoritarian conspiracy as a whole, we see a system of
interacting organs, a beast with arteries and veins whose blood may be thickened
and slowed until it falls, stupefied; unable to sufficiently comprehend and control
the forces in its environment.
Later we will see how new technology and insights into the psychological
motivations of conspirators can give us practical methods for preventing or
reducing important communication between authoritarian conspirators, foment strong resistance to authoritarian planning and create powerful incentives for more humane forms of governance.
These essays on conspiracies by Julian Assange (me@iq.org) were retrieved website iq.org. The first from
Novermber 10, 2006, and the second at archive.org, dated December 3, 2006.
http://iq.org/conspiracies.pdf
http://web.archive.org/web/20070110200827/http://iq.org/conspiracies.pdf
Julian Assange: http://web.archive.org/web/20071020051936/http://iq.org/
Sun 31 Dec 2006 : The non linear effects of leaks on unjust systems of governance
You may want to read The Road to Hanoi or Conspiracy as Governance [second
essay following]; an obscure motivational document, almost useless in light of its
decontextualization and perhaps even then. But if you read this latter document
while thinking about how different structures of power are differentially affected
by leaks (the defection of the inner to the outer) its motivations may become clearer.
The more secretive or unjust an organization is, the more leaks induce fear and
paranoia in its leadership and planning coterie. This must result in minimization of efficient internal communications mechanisms (an increase in cognitive "secrecy tax") and consequent system-wide cognitive decline resulting in decreased ability to hold onto power as the environment demands adaption.
Hence in a world where leaking is easy, secretive or unjust systems are nonlinearly hit relative to open, just systems. Since unjust systems, by their nature induce opponents, and in many places barely have the upper hand, mass leaking leaves them exquisitely vulnerable to those who seek to replace them with more open forms of governance.
Only revealed injustice can be answered; for man to do anything intelligent he has to know what's actually going on.
More: http://web.archive.org/web/*/http://iq.org
State and Terrorist Conspiracies
me @ iq.org
November 10, 2006
Behind the ostensible government sits enthroned an invisible government owing no allegiance and acknowledging no responsibility to the people. To destroy this invisible government, to befoul this unholy alliance between corrupt business and corrupt politics is the first task of statesmanship.
(President Theodore Roosevelt)
While you here do snoring lie,Open-eyed conspiracy His time doth take.
(The Tempest; Ariel at II, i)
Introduction
To radically shift regime behavior we must think clearly and boldly for if wehave lea rned anything, it is that regimes do not want to be changed. We must think beyond those who have gone before us, and discover technological changes that embolden us with ways to act in which our forebears could not.
Firstly we must understand what aspect of government or neocorporatist behavior we wish to change or remove. Secondly we must develop a way of thinking about this behavior that is strong enough carry us through the mire of politically distorted language, and into a position of clarity. Finally must use these insights to inspire within us and others a course of ennobling, and effective action.
Authoritarian power is maintained by conspiracy Conspiracy, Conspire: make secret plans jointly to commit a harmful act; working together to bring about a particular result, typically to someone’s detriment. ORIGIN late Middle English : from Old French conspirer, from Latin conspirare agree, plot, from con- together with spirare breathe.
The best party is but a kind of conspiracy against the rest of the nation. (Lord Halifax)
1Where details are known as to the inner workings of authoritarian regimes,
we see conspiratorial interactions among the political elite not merely for preferment
or favor within the regime but as the primary planning methodology behind
maintaining or strengthening authoritarian power.
Authoritarian regimes give rise to forces which oppose them by pushing
against the individual and collective will to freedom, truth and self realization.
Plans which assist authoritarian rule, once discovered, induce resistance. Hence
these plans are concealed by successful authoritarian powers. This is enough to
define their behavior as conspiratorial.
Thus it happens in matters of state; for knowing afar off (which
it is only given a prudent man to do) the evils that are brewing,
they are easily cured. But when, for want of such knowledge, they
are allowed to grow until everyone can recognize them, there is no
longer any remedy to be found.
(The Prince, Niccolo Machiavelli [1469-1527])
Terrorist conspiracies as connected graphs
Pre and post 9/11 the Maryland Procurement Office (National Security Agency
light cover for academic funding, google for grant code “MDA904”) and others
have funded mathematicians to look at terrorist conspiracies as connected graphs
(no mathematical background is needed to follow this article).
We extend this understanding of terrorist organizations and turn it on the
likes of its creators where it becomes a knife to dissect the power conspiracies
used to maintain authoritarian government.
We will use connected graphs as way to harness the spatial reasoning ability
of the brain to think in a new way about political relationships. These graphs are
easy to visualize. First take some nails (“conspirators”) and hammer them into
a board at random. Then take twine (“communication”) and loop it from nail
to nail without breaking. Call the twine connecting two nails a link. Unbroken
twine means it is possible to travel from any nail to any other nail via twine and
intermediary nails. Mathematicians say the this type of graph is connected.
Information flows from conspirator to conspirator. Not every conspirator
trusts or knows every other conspirator even though all are connected. Some
are on the fringe of the conspiracy, others are central and communicate with
many conspirators and others still may know only two conspirators but be a
bridge between important sections or groupings of the conspiracy.
Separating a conspiracy
If all links between conspirators are cut then there is no conspiracy. This is
usually hard to do, so we ask our first question: What is the minimum number
of links that must be cut to separate the conspiracy into two groups of equal
number? (divide and conquer). The answer depends on the structure of the
2conspiracy. Sometimes there are no alternative paths for conspiratorial information
to flow between conspirators, othertimes there are many. This is a useful
and interesting characteristic of a conspiracy. For instance, by assassinating one
“bridge” conspirator, it may be possible to split the conspiracy. But we want
to say something about all conspiracies.
Some conspirators dance closer than others
Conspirators are discerning, some trust and depend each other, others say little.
Important information flows frequently through some links, trivial information
through others. So we expand our simple connected graph model to include not
only links, but their “importance”.
Return to our board-and-nails analogy. Imagine a thick heavy cord between
some nails and fine light thread between others. Call the importance, thickness
or heaviness of a link its weight. Between conspirators that never communicate
the weight is zero. The “importance” of communication passing through a
link difficult to evaluate apriori, since it its true value depends on the outcome
of the conspiracy. We simply say that the “importance” of communication
contributes to the weight of a link in the most obvious way; the weight of a
link is proportional to the amount of important communication flowing across
it. Questions about conspiracies in general won’t require us to know the weight
of any link, since that changes from conspiracy to conspiracy.
Conspiracies are cognitive devices. They are able to out
think the same group of individuals acting alone
Conspiracies take information about the world in which they operate (the conspiratorial
environment), pass it around the conspirators and then act on the
result. We can see conspiracies as a type of device that has inputs (information
about the environment) and outputs (actions intending to change or maintain
the environment).
What does a conspiracy compute? It computes the next
action of the conspiracy
Now I we ask the question: how effective is this device? Can we compare it to
itself at different times? Is the conspiracy growing stronger or weakening? This
is a question that asks us to compare two values.
Can we find a value that describes the power of a conspiracy?
We could count the number of conspirators, but that would not capture the
difference between a conspiracy and the individuals which comprise it. How do
they differ? Individuals in a conspiracy conspire. Isolated individuals do not.
We can capture that difference by adding up all the important communication
3
power.
Total conspiratorial power
This number is an abstraction. The pattern of connections in a conspiracy
is unusually unique. But by looking at this value which in indepndent of the
arrangement of conspiratorial connections we can make some generalisations.
If total conspiratorial power is zero, there is no conspiracy
If total conspiratorial power is zero, there is no information flow between the
conspirators and hence no conspiracy.
A substantial increase or decrease in total conspiratorial power almost always
means what we expect it to mean; an increase or decrease in the ability of the
conspiracy to think, act and adapt.
Separating weighted conspiracies
I now return to our earlier idea about cleaving a conspiracy into halves. Then
we looked at dividing a conspiracy into two groups of equal numbers by cutting
the links between conspirators. Now we see that a more interesting idea is to
split the total conspiratorial power in half. Since any isolated half can be viewed
as a conspiracy in its own right we can continue splitting indefinitely.
How can we reduce the ability of a conspiracy to act?
We can marginalise a conspiracy’s ability to act by decreasing total conspiratorial
power until it is no longer able to understand, and hence respond effectively
to, its environment.
We can split the conspiracy, reduce or eliminating important communication
between a few high weight links or many low weight links.
Traditional attacks on conspiratorial power groupings, such as assassination,
have cut high weight links by killing, kidnapping, blackmailing or otherwise
marginalizing or isolating some of the conspirators they were connected to.
An authoritarian conspiracy that can not think efficiently,
can not act to preserve itself against the opponents it induces
When we look at a conspiracy as an organic whole, we can see a system of
interacting organs, a body with arteries and veins whos blood may be thickened
and slowed till it falls, unable to sufficiently comprehend and control the forces
in its environment.
4
Conspiracy as Governance
me @ iq.org
December 3, 2006
Conspiracy, Conspire: make secret plans jointly to commit
a harmful act; working together to bring about a particular
result, typically to someone’s detriment. ORIGIN
late Middle English : from Old French conspirer, from
Latin conspirare agree, plot, from con- together with spirare
breathe. (OED)
The best party is but a kind of conspiracy against the rest
of the nation. (Lord Halifax)
Security gives way to conspiracy.
(Julius Caesar, act 2, sc. 3. The
soothsayer’s message, but Caesar is too busy to look at it)
Introduction
To radically shift regime behavior we must think clearly and boldly for if we
have learned anything, it is that regimes do not want to be changed. We must
think beyond those who have gone before us and discover technological changes
that embolden us with ways to act in which our forebears could not.
We must understand the key generative structure of bad governance1
We must develop a way of thinking about this structure that is strong enough
to carry us through the mire of competing political moralities and into a position
of clarity.
Most importantly, we must use these insights to inspire within us and others
a course of ennobling and effective action to replace the structures that lead to
bad governance with something better.
1Everytime we witness an act that we feel to be unjust and do not act we become a party
to injustice. Those who are repeatedly passive in the face of injustice soon find their character
corroded into servility. Most witnessed acts of injustice are associated with bad governance,
since when governance is good, unanswered injustice is rare. By the progressive diminution
of a people’s character, the impact of reported, but unanswered injustice is far greater than
it may initially seem. Modern communications states through their scale, homogeneity and
excesses provide their populace with an unprecidented deluge of witnessed, but seemingly
unanswerable injustices.
Conspiracy as governance in authoritarian regimes
Where details are known as to the inner workings of authoritarian regimes, we
see conspiratorial interactions among the political elite, not merely for preferment
or favor within the regime, but as the primary planning methodology
behind maintaining or strengthening authoritarian power.
Authoritarian regimes create forces which oppose them by pushing against a
people’s will to truth, love and self-realization. Plans which assist authoritarian
rule, once discovered, induce further resistance. Hence such schemes are concealed
by successful authoritarian powers until resistance is futile or outweighed
by the efficiencies of naked power. This collaborative secrecy, working to the
detriment of a population, is enough to define their behavior as conspiratorial.
Thus it happens in matters of state; for knowing afar off (which
it is only given a prudent man to do) the evils that are brewing,
they are easily cured. But when, for want of such knowledge, they
are allowed to grow until everyone can recognize them, there is no
longer any remedy to be found.
(The Prince, Niccolo Machiavelli [1469-1527])
Terrorist conspiracies as connected graphs
Pre and post 9/11 the Maryland Procurement Office2 and others have funded
mathematicians to look at terrorist conspiracies as connected graphs (no mathematical
background is needed to follow this article).
We extend this understanding of terrorist organizations and turn it on the
likes of its paymasters; transforming it into a knife to dissect the conspiracies
used to maintain authoritarian power structures.
We will use connected graphs as a way to apply our spatial reasoning abilities
to political relationships. These graphs are very easy to visualize. First take
some nails (“conspirators”) and hammer them into a board at random. Then
take twine (“communication”) and loop it from nail to nail without breaking.
Call the twine connecting two nails a link. Unbroken twine means it is possible
to travel from any nail to any other nail via twine and intermediary nails.
Mathematicians say that this type of graph is connected.
Information flows from conspirator to conspirator. Not every conspirator
trusts or knows every other conspirator even though all are connected. Some
are on the fringe of the conspiracy, others are central and communicate with
many conspirators and others still may know only two conspirators but be a
bridge between important sections or groupings of the conspiracy.
Separating a conspiracy
If all conspirators are assassinated or all the links between them are destroyed,
then a conspiracy no longer exists. This is usually requires more resources than
2National Security Agency light cover for academic funding, google for grant code
“MDA904”
2
we can deploy, so we ask our first question: What is the minimum number
of links that must be cut to separate the conspiracy into two groups of equal
number? (divide and conquer). The answer depends on the structure of the
conspiracy. Sometimes there are no alternative paths for conspiratorial information
to flow between conspirators, othertimes there are many. This is a useful
and interesting characteristic of a conspiracy. For instance, by assassinating one
“bridge” conspirator, it may be possible to split a conspiracy. But we want to
say something about all conspiracies.
Some conspirators dance closer than others
Conspirators are often discerning, for some trust and depend each other, while
others say little. Important information flows frequently through some links,
trivial information through others. So we expand our simple connected graph
model to include not only links, but their “importance”.
Return to our board-and-nails analogy. Imagine a thick heavy cord between
some nails and fine light thread between others. Call the importance, thickness
or heaviness of a link its weight. Between conspirators that never communicate
the weight is zero. The “importance” of communication passing through a
link is difficult to evaluate apriori, since its true value depends on the outcome
of the conspiracy. We simply say that the “importance” of communication
contributes to the weight of a link in the most obvious way; the weight of a
link is proportional to the amount of important communication flowing across
it. Questions about conspiracies in general won’t require us to know the weight
of any link, since that changes from conspiracy to conspiracy.
Conspiracies are cognitive devices. They are able to outthink
the same group of individuals acting alone
Conspiracies take information about the world in which they operate (the conspiratorial
environment), pass through the conspirators and then act on the
result. We can see conspiracies as a type of device that has inputs (information
about the environment), a computational network (the conspirators and their
links to each other) and outputs (actions intending to change or maintain the
environment).
Deceiving conspiracies
Since a conspiracy is a type of cognitive device that acts on information acquired
from its environment, distorting or restricting these inputs means acts based on
them are likely to be misplaced. Programmers call this effect garbage in, garbage
out.
Usually the effect runs the other way; it is conspiracy that is the agent of
deception and information restriction. In the US, the programmer’s aphorism
is sometimes called “the Fox News effect”.
3
What does a conspiracy compute? It computes the next
action of the conspiracy
Now we ask the question: how effective is this device? Can we compare it to
itself at different times? Is the conspiracy growing stronger or is it weakening?
This question asks us to compare two values over time.
Can we find a value that describes the power of a conspiracy?
We could count the number of conspirators, but that would not capture the key
difference between a conspiracy and the individuals which comprise it. How do
they differ? In a conspiracy, individuals conspire, while when isolated they do
not. We can show most of this difference by adding up all the important communication
(weights) between all the conspirators. Call this total conspiratorial
power.
Total conspiratorial power
This number is an abstraction. The pattern of connections in a conspiracy is
usually unique. But by looking at a value that is independent of the arrangement
of connections between conspirators we can say something about conspiracies
in general.
If total conspiratorial power is zero, there is no conspiracy
If total conspiratorial power is zero, then clearly there is no information flow
between the conspirators and hence no conspiracy.
A substantial increase or decrease in total conspiratorial power almost always
means what we expect it to mean; an increase or decrease in the ability of the
conspiracy to think, act and adapt.
Separating weighted conspiracies
We now return to our earlier idea about cleaving a conspiracy into halves. Then
we looked at dividing a conspiracy into two groups of equal numbers by cutting
the links between conspirators. Now we see that a more interesting idea is to
split the total conspiratorial power in half. Since any isolated half can be viewed
as a conspiracy in its own right we can continue separating indefinitely.
Throttling weighted conspiracies
Instead of cutting links between conspirators so as to separate a weighted conspiracy
we can achieve a similar effect by throttling the conspiracy — constricting
(reducing the weight of) those high weight links which bridge regions of
equal total conspiratorial power.
4
Attacks on conspiratorial cognitive ability
A man in chains knows he should have acted sooner for his ability to influence
the actions of the state is near its end. To deal with powerful conspiratorial
actions we must think ahead and attack the process that leads to them since
the actions themselves can not be dealt with.
We can deceive or blind a conspiracy by distorting or restricting the information
available to it.
We can reduce total conspiratorial power via unstructured attacks on links
or through throttling and separating.
A conspiracy sufficiently engaged in this manner is no longer able to comprehend
its environment and plan robust action.
Traditional vs. modern conspiracies
Traditional attacks on conspiratorial power groupings, such as assassination,
cut many high weight links. The act of assassination — the targeting of visible
individuals, is the result of mental inclinations honed for the pre-literate societies
in which our species evolved.
Literacy and the communications revolution have empowered conspirators
with new means to conspire, increasing the speed of accuracy of the their interactions
and thereby the maximum size a conspiracy may achieve before it
breaks down.
Conspirators who have this technology are able to out conspire conspirators
without it. For the same costs they are able to achieve a higher total conspiratorial
power. That is why they adopt it.
For example, remembering Lord Halifax’s words, let us consider two closely
balanced and broadly conspiratorial power groupings, the US Democratic and
Republican parties.
Consider what would happen if one of these parties gave up their mobile
phones, fax and email correspondence — let alone the computer systems which
manage their subscribes, donors, budgets, polling, call centres and direct mail
campaigns?
They would immediately fall into an organizational stupor and lose to the
other.
An authoritarian conspiracy that cannot think is powerless
to preserve itself against the opponents it induces
When we look at an authoritarian conspiracy as a whole, we see a system of
interacting organs, a beast with arteries and veins whose blood may be thickened
and slowed until it falls, stupefied; unable to sufficiently comprehend and control
the forces in its environment.
Later we will see how new technology and insights into the psychological
motivations of conspirators can give us practical methods for preventing or
reducing important communication between authoritarian conspirators, foment strong resistance to authoritarian planning and create powerful incentives for more humane forms of governance.
A world after Wikileaks
by Bill Thompson- BBC
Wikileaks founder Julian Assange has caused outcry from governments around the world.Things will be different after Wikileaks, but not in ways we might expect, says regular commentator Bill Thompson.
Wikileaks founder Julian Assange may not be Time Magazine Person of the Year for 2010 - that distinction has gone to Facebook's Mark Zuckerberg - but he has certainly managed to dominate the global conversation over the past few weeks.The reverberations of Wikileaks publication of so many confidential and secret documents will be felt for many years, and he has attracted a large band of supporters, but the support for Assange is as much about his personal situation as it is an expression of support for what Wikileaks does or proposes to do.
To properly understand the philosophy that underlies his activity or his long-term goals, people should read Aaron Bady's compelling analysis of Assange's politics, as published on the zunguzungu blog. Bady uses a close reading of an essay by Assange on State and Terrorist Conspiracies to argue that Assange sees modern governance as a conspiracy by those with power that goes against the interests and desires of the governed, and that Wikileaks exists in order to undermine the ability of governments to communicate secretly and diminish the power of authoritarian states.
Doing this, he believes, will force openness and lead to more progressive forms of government - or at least, less repressive ones. It will also, inevitably, lead to a response from the institutions targeted, and in the last few weeks we have seen what happens when a state feels threatened. Although it is not pleasant neither is it surprising: governments, like other complex systems, will act to preserve themselves and seek to damage or neutralise opposition, and nothing the US or other governments have done so far is exceptional.
Net conflict
In a statement dictated to his mother from his jail cell Assange said "we now know that Visa, Mastercard, PayPal and others are instruments of US foreign policy", referring to the way in which these large companies had decided not to provide service to Wikileaks. But nobody who has observed the growth of the internet could have been surprised by this.
Tim Wu and Jack Goldsmith wrote about this back in 2006 in their excellent book Who Rules the Internet, where they pointed out that government will always go after gatekeepers and choke points in their attempts to regulate online activity. We have called forth the network age, and yet carried on in our daily lives as if nothing has really changed”In that same year, Visa and Mastercard refused to pass funds to the Russian music download site allofmp3.com, even though the site was legal within Russia, but that attracted little attention because it was about cheap music and not freedom of expression.
Now we face a different sort of conflict, and it appears to be one that will shape the political landscape for years to come. In the finale of the film Ghostbusters the eponymous heroes are obliged to challenge the god Gozer, but before he appears they are told that they must "choose the form of your destructor". Gozer, they realise, will materialise in whatever monstrous form they imagine, and Venkman tells the others not to visualise anything. Unfortunately, it is too late - Ray has already thought of "the gentlest thing he could, something that would never hurt me" - at which point a giant Stay Puft Marshmallow Man appears and proceeds to wreak havoc on New York.
Something similar lies behind the emergence of Wikileaks. Over the past two decades we have built the internet and the web and completed a process of digitisation that has turned most of the world's operational data into electronic form, from bank records to love letters to diplomatic cables.
Status quo
We have called forth the network age, and yet carried on in our daily lives as if nothing has really changed.
As a result we made this moment inevitable, even if it was impossible to predict the form our "destructor" would take.
Will Wikileaks usher in a new era of control, wonders Bill Thompson
Now it has materialised as a stateless, shapeless "international new media non-profit organisation that publishes submissions of otherwise unavailable documents from anonymous news sources and news leaks", as Wikipedia describes it.That organisation is threatened from outside by some of the most powerful states in the world, whose capacity for action is enormous. It is also challenged from the inside, as internal mails and documents, made available online on the Cryptome site reveal.
But what really matters is that the disruptive power of the internet has been conclusively demonstrated, and the old order has been provoked to respond.
This is democracy's Napster moment, the point at which the forms of governance that have evolved over 200 years of industrial society prove wanting in the face of the network, just as the business models of the recording industry were swept away by the ease with which the internet could transmit perfect digital copies of compressed music files.
Napster was neutered by court action in the US, but its failure inspired peer-to-peer services that were far harder to control. The sharing of music is now unstoppable, and Wikileaks and the organisations that come after it will ensure that the same is now true of secrets.
Of course we should never underestimate the power of the state to reinvent itself, just as modern capitalism and constitutional monarchy seem able to do.
Wikileaks has exposed the inadequacies in the way governments control their internal flow of information, and organisations dedicated to transparency and disclosure will observe the tactics used to shut it down and adapt accordingly. But the state can learn too, and has the resources to implement what it learns.
I fear that Wikileaks is as likely to usher in an era of more effective control as it is to sweep away the authoritarian regimes that Julian Assange opposes. He may look to a day when the conspiratorial power of the state is diminished, but I think we are more likely to see new forms of government emerge that exploit the capabilities of the network age to ensure their power is undiminished.
Bill Thompson is an independent journalist and regular commentator on the BBC World Service programme Digital Planet. He is currently working with the BBC on its archive project.
Sunday, January 30, 2011
Mental Health in the workplace matters
Dianne Buckner, CBC News
When it comes to the pressing priorities of an average entrepreneur, managing the mental health of staff is probably not at the top of the list. Concern about whether or not employees are feeling good about their work and their lives likely has to take a back seat to issues related to surviving this tough economy, such as improving sales or reducing expenses.But touchy-feely as emotional well-being may sound, the fact is that issues such as anxiety, depression and burnout present some very real costs — and not just to individual enterprises, but to the economy as a whole.Whether or not small business owners are feeling the heat to address these issues, the pressure is there on a number of fronts.
"For the first time in Canadian history, employers are confronted with a legal duty to maintain not only a physically safe workplace, but also a psychologically safe work environment." So says a report done for the Mental Health Commission of Canada by Dr. Martin Shain of the University of Toronto.'Mental health disability claims have been on the rise for several years in Canada. In fact, it's predicted that mental health will be the leading cause of disability claims very soon.'
—Julie Holden, Banyan Work Health SolutionsThe report, called Tracking the Perfect Legal Storm, outlines a variety of developments in Canadian courtrooms that indicate the legal system is less tolerant of workplace factors that threaten psychological "safety." Increasingly large fines are being imposed on companies that don't consider the toll their workplace policies may take on employees' mental health. And as Shain points out, many employers are unaware of this "brewing legal storm."
And there are not just legal risks connected to ignoring mental health. Even when burnt-out or psychologically damaged employees don't sue, there's the risk of lost productivity. "Mental health disability claims have been on the rise for several years in Canada," says Julie Holden of Banyan Work Health Solutions. "In fact, it's predicted that mental health will be the leading cause of disability claims very soon."
This all sounds very alarming — but it also sounds very familiar.
Eight years ago, while working at Venture, I reported on the growing awareness around "work-life balance." Researchers at Labour Canada, as well as independent private sector consultants, were warning companies that they had to do better in terms of helping employees balance the demands of their jobs and their home lives. Absenteeism was climbing, along with the cost of company health plans, as employees took advantage of subsidized prescriptions for anti-depressants and anti-anxiety pills.
The most striking aspect of the report (at least to my mind) was that for years, companies had actually been trying to do something, adopting all sorts of new strategies to help employees cope. On-site daycares and gyms, work-at-home strategies, and even "mental health days" had become common.But these methods didn't seem to be working. The worrying statistics kept pouring in, and worsening.
Since then, I'd say that awareness of mental health issues has continued to rise, as has the instinct to address them. So the fact that Shain and Holden are again sounding the alarm bells isn't a surprise, but a solution doesn't appear to be any more imminent now than then.Widespread, unavoidable doses of stress seem the norm in our 21st-century lives, and it doesn't just come from our modern, hyper-competitive workplaces, but also from a wide variety of societal and cultural influences. Small business owners may be interested to know that companies with fewer than 20 employees appear to be doing better than larger firms, according to Statistics Canada. Absenteeism is lower with those employers, running around eight lost days a year in 2009. By comparison, workers in transportation and warehousing lost 14 days in 2009. It was 13 for health care and social assistance workers, and 12.6 in the public sector.But on the other hand, larger companies have more resources and flexibility when it comes to handling a mental health crisis. (There are free resources on the subject of mental health in the workplace, and entrepreneurs could look under the section aimed at "senior leaders.")"I had to get rid of an employee who'd been with us 11 years," says an entrepreneur who spoke to me off the record. "She was poisoning the atmosphere. Everything was bad, her outlook was completely negative."He spoke to the employee, and although she stayed with his company for another year, things didn't improve. "I had no choice but to fire her." I'm trying to be the quintessential liberal-minded employer," says the entrepreneur, who has just six employees. "I want to be fair, but I don't think any small business owner can afford to keep someone who isn't pulling their weight."
Of course, large companies have entire departments devoted to human resources. Stephen Fletcher works in HR at Newalta, a Canadian waste management company with 3,000 employees coast-to-coast.The company has a comprehensive mental health program, including a "flex benefit" program where employees can choose from a variety of stress-busting goodies such as fitness club memberships, counselling and even fishing or hunting licences. Even so, "stress claims are edging up," admits Fletcher, noting that anyone from top performers to less-stellar employees can fall victim to overload.
And it's hard to add up what it costs organizations."There are so many hidden costs," says Fletcher. "Absence alone doesn't reflect the effect on other workers, their productivity, on customers, and so on. There's a major ripple effect that has a lot of soft costs that are very difficult to track." Ihere are more than enough reasons for employers large and small to do their best with this particular challenge, not the least of which is human decency. And daunting as managing mental health may be, Fletcher tells me "it does make a difference to try."
I believe him.
When it comes to the pressing priorities of an average entrepreneur, managing the mental health of staff is probably not at the top of the list. Concern about whether or not employees are feeling good about their work and their lives likely has to take a back seat to issues related to surviving this tough economy, such as improving sales or reducing expenses.But touchy-feely as emotional well-being may sound, the fact is that issues such as anxiety, depression and burnout present some very real costs — and not just to individual enterprises, but to the economy as a whole.Whether or not small business owners are feeling the heat to address these issues, the pressure is there on a number of fronts.
"For the first time in Canadian history, employers are confronted with a legal duty to maintain not only a physically safe workplace, but also a psychologically safe work environment." So says a report done for the Mental Health Commission of Canada by Dr. Martin Shain of the University of Toronto.'Mental health disability claims have been on the rise for several years in Canada. In fact, it's predicted that mental health will be the leading cause of disability claims very soon.'
—Julie Holden, Banyan Work Health SolutionsThe report, called Tracking the Perfect Legal Storm, outlines a variety of developments in Canadian courtrooms that indicate the legal system is less tolerant of workplace factors that threaten psychological "safety." Increasingly large fines are being imposed on companies that don't consider the toll their workplace policies may take on employees' mental health. And as Shain points out, many employers are unaware of this "brewing legal storm."
And there are not just legal risks connected to ignoring mental health. Even when burnt-out or psychologically damaged employees don't sue, there's the risk of lost productivity. "Mental health disability claims have been on the rise for several years in Canada," says Julie Holden of Banyan Work Health Solutions. "In fact, it's predicted that mental health will be the leading cause of disability claims very soon."
This all sounds very alarming — but it also sounds very familiar.
Eight years ago, while working at Venture, I reported on the growing awareness around "work-life balance." Researchers at Labour Canada, as well as independent private sector consultants, were warning companies that they had to do better in terms of helping employees balance the demands of their jobs and their home lives. Absenteeism was climbing, along with the cost of company health plans, as employees took advantage of subsidized prescriptions for anti-depressants and anti-anxiety pills.
The most striking aspect of the report (at least to my mind) was that for years, companies had actually been trying to do something, adopting all sorts of new strategies to help employees cope. On-site daycares and gyms, work-at-home strategies, and even "mental health days" had become common.But these methods didn't seem to be working. The worrying statistics kept pouring in, and worsening.
Since then, I'd say that awareness of mental health issues has continued to rise, as has the instinct to address them. So the fact that Shain and Holden are again sounding the alarm bells isn't a surprise, but a solution doesn't appear to be any more imminent now than then.Widespread, unavoidable doses of stress seem the norm in our 21st-century lives, and it doesn't just come from our modern, hyper-competitive workplaces, but also from a wide variety of societal and cultural influences. Small business owners may be interested to know that companies with fewer than 20 employees appear to be doing better than larger firms, according to Statistics Canada. Absenteeism is lower with those employers, running around eight lost days a year in 2009. By comparison, workers in transportation and warehousing lost 14 days in 2009. It was 13 for health care and social assistance workers, and 12.6 in the public sector.But on the other hand, larger companies have more resources and flexibility when it comes to handling a mental health crisis. (There are free resources on the subject of mental health in the workplace, and entrepreneurs could look under the section aimed at "senior leaders.")"I had to get rid of an employee who'd been with us 11 years," says an entrepreneur who spoke to me off the record. "She was poisoning the atmosphere. Everything was bad, her outlook was completely negative."He spoke to the employee, and although she stayed with his company for another year, things didn't improve. "I had no choice but to fire her." I'm trying to be the quintessential liberal-minded employer," says the entrepreneur, who has just six employees. "I want to be fair, but I don't think any small business owner can afford to keep someone who isn't pulling their weight."
Of course, large companies have entire departments devoted to human resources. Stephen Fletcher works in HR at Newalta, a Canadian waste management company with 3,000 employees coast-to-coast.The company has a comprehensive mental health program, including a "flex benefit" program where employees can choose from a variety of stress-busting goodies such as fitness club memberships, counselling and even fishing or hunting licences. Even so, "stress claims are edging up," admits Fletcher, noting that anyone from top performers to less-stellar employees can fall victim to overload.
And it's hard to add up what it costs organizations."There are so many hidden costs," says Fletcher. "Absence alone doesn't reflect the effect on other workers, their productivity, on customers, and so on. There's a major ripple effect that has a lot of soft costs that are very difficult to track." Ihere are more than enough reasons for employers large and small to do their best with this particular challenge, not the least of which is human decency. And daunting as managing mental health may be, Fletcher tells me "it does make a difference to try."
I believe him.
Davos 2011: World Economic Forum sets up uncertain year
The World Economic Forum has ended with business and political leaders worrying whether the economic boom in Asia, Brazil, the US and Germany can last. Lacking a big theme, this year's meeting of the rich and powerful focused on global threats, from political turmoil to scarce resources.
European leaders used the stage in Davos to drive home their message that they will do anything to save the euro.And the UK and Gates Foundation joined forces in a push to eradicate polio.Prime Minister David Cameron said the UK government would double its funding for the fight against the debilitating disease to $60m (£38m) despite the "tough economic times". The Bill and Melinda Gates Foundation, meanwhile, will add $100m in funding. "There is an incredible opportunity to wipe out the last 1% of polio, saving lives now and preventing the threat of outbreaks in the future."
Guarded optimism
In 2009 and 2010, the annual meetings of more than 2,000 of the world's most powerful business leaders and politicians had been gloomy affairs, as the credit crunch was followed by a global economic crisis.
This year, company bosses showed plenty of optimism, but always tempered by warnings that the good times might not last.
Chanda Kochhar, chief executive of Indian bank ICICI, said that while it was important to look for optimism and opportunities, this had to be grounded in reality. "We are optimistic, but we are afraid to be optimistic," said Paul Bulcke, boss of food giant Nestle. Ellen Kullman, chief executive of DuPont, agreed, but acknowledged that 2010 had been "a fantastic year for growth, and 2011 will still be good."
Whoever one spoke to, whether it was Michael Dell, founder of the computer giant carrying his name, Kris Gopalakrishnan of IT services firm Infosys or Wei Jiafu of China Ocean Shipping Group: everybody reported really strong growth and predicted investments and expansion. One banker, at a private meeting, spoke of "boom times".
A survey of bosses from around the world, compiled by accounting firm Pricewaterhouse Coopers and published at the eve of the Forum, suggested that confidence levels were back to pre-crisis levels.Despite this, many of the discussions and sessions held during the five days of the forum focused on what could go wrong.Government debt, especially in Europe, soaring inflation, especially for food, and scarce resources from food to energy, and cyber threats were all on the long list of worries that dominated the Davos agenda.
Eurozone strength
Davos was set for a vigorous debate about the health of the eurozone, or rather the lack thereof. However, this was somewhat squashed when French President Nicolas Sarkozy and German Chancellor Angela Merkel launched a clearly co-ordinated pincer attack on speculators, bankers and investors to tell them in clear terms that they would do anything that was necessary to defend the euro and prop up weaker members of the currency union.
With the back-up of the region's central bankers, who made forceful statements in private sessions for leaders of the banking industry, they appeared to calm the nerves of most.Greek Prime Minister George Papandreou, meanwhile, also sat through a succession of meetings to make the case that the eurozone crisis had been contained and that Greece was on the way to recovery.
"The Sarkozy and Merkel statements put the markets at ease, put me at ease," said Jacob Wallenberg, chairman of Investor AB, the giant Swedish holding company. Still, there was some scepticism. "The eurozone is still a high risk area in 2011... another sovereign debt crisis is possible, and [government] deficit reduction will have a negative impact on economic growth," warned Wei Jiafu.
Egypt on the mind
As so often during the annual meetings in Davos, an outside crisis forced its way on to the agenda, the turmoil spreading through North Africa, from Tunisia to Egypt.A hastily organised session featured two of the technocrats now in ministerial positions in Tunisia's interim government, and throughout the hallways participants swapped the latest news from the unrest in Cairo's streets.However, with few Arab leaders in attendance this year, the discussions lacked the heft that the Davos event used to provide during previous crisis.
The rise and rise of India and China
If this year's Davos served one purpose, then it was confirmation of the fact that India and China are now fully grown players on the world stage, both politically and economically. Discussions at Davos at times appeared to measure the health of the global economy by the strength of growth in both countries.
Both countries had sent strong delegations to the forum, with neither politicians nor business leaders reluctant to assert their strength and authority.
Saturday, January 29, 2011
Friday, January 28, 2011
'Anonymous' defends the use of web attacks
Anonymous members launched web attacks in support of Julian Assange's Wikileaks
Web activist group Anonymous has criticised the arrest of its members claiming the web attacks they launched were a legitimate form of protest.Five men were arrested yesterday in connection with web attacks carried out in support of Wikileaks.Overnight, US law enforcers said they had executed 40 search warrants in conjunction with UK operation.Anonymous said the action was a "serious declaration of war" by the UK government against it.Despite Anonymous' claims, in an open letter published online that denial of service attacks are a legitimate way to protest, UK law says such attacks, which bombard sites with data, are illegal.
The arrests of five of its members was "a sad mistake" by the UK authorities, Anonymous.Distributed denial of service (DDoS) attacks should not be confused with malicious hacking, instead be regarded as "a new way of voicing civil protest", it added.
A Distributed Denial of Service (DDoS) attack aims to make websites inaccessible. Attackers commonly use networks of compromised computers - called a botnet - that they control to launch the attacks. However, the Anonymous attacks recruited volunteers to download a tool to create a "virtual" botnet. By overwhelming the target site with requests, the attackers can ensure that genuine visitors cannot reach the site.These requests look like genuine web traffic so can be hard to filter out.Typically, such attacks have been aimed at high-profile websites, such as those belonging to government departments, banks and political organisations
They are illegal in most countries
Q&A: Web Attacks
Detectives from the Metropolitan Police's Central e-Crime Unit arrested five men, aged between 15 and 26 in connection with offences under the Computer Misuse Act 1990.The men were arrested at residential addresses in the West Midlands, Northamptonshire, Hertfordshire, Surrey and London.
Not so anonymous
That legislation makes it clear that launching DDoS attacks is illegal, said Graham Cluley, senior security analyst at Sophos."Most of the people that took part in the attacks in support of Wikileaks volunteered to do so," he told BBC News.The web attacks were mounted against firms such as Mastercard, PayPal and Amazon which had withdrawn their services to Wikileaks, in the wake of its publication of leaked embassy cables.The DDoS attacks launched against those companies was done using a web toll known as the Low Orbit Ion Cannon (Loic).That made it easy for authorities to locate those responsible, as Loic does nothing to mask the IP address of those initiating the flood of web traffic, said Cluley.
"Once you know someone's IP address it's relatively simple to find their physical address," he said.
In December two Dutch teenagers were taken into custody and subsequently released over allegations that they had helped coordinate the attacks. The five men arrested in the UK have been released on bail.
Jet Blue Crisis Management
Out of the Blue:A Primer on Crisis Management in the Context of JetBlue’s response
by Debra J. Smith
Executive Summary
On Valentine’s Day, 2007 JetBlue, a company known for stellar customer service was forced by a severe winter storm to cancel 1,095 flights stranding thousand of customers.It immediately became clear that the company had no contingency plan in place to handle such an event. In the first hours of the crisis the company failed on every measure of service quality. Disgruntled passengers armed with today’s technology broadcast their plight on the internet and in the media. JetBlue had a full blown crisis on its hands. This paper outlines the crisis and the delayed but finally quite effective response of JetBlue’s CEO David Neeleman. While acknowledging that every crisis is unique, seven basic principles for effective crisis management are reported along with six steps for digital crisis management. In the final analysis, however, the best solution is to have a contingency plan in place to deal with events which may be impossible to predict but essential to prepare for. In the final analysis a crisis must be defined and met head on.
The Crisis
On Valentines Day 2007 Jet Blue, a company that was known for stellar customer service blew it. They really blew it. When a snow storm hit the East Coast of the United States they were forced to cancel 1,096 flights the result of which was that thousands of passengers and flight crews were stranded. In the first twelve hours JetBlue demonstrated that it had no contingency plan for such an event. People were stranded for up to nine hours on planes with nothing to do. Passengers were literally left out in the cold for hours on end without food, proper rest room facilities or basic necessities. People were not happy and with today’s technology they vented that displeasure onto the world wide web and in the media. Pictures from cell phones and blogs from stranded passengers became immediately available for anyone who wanted to commiserate. This blunder could have ushered in the end of JetBlue. This paper discusses how JetBlue failed its customers and how it redeemed itself. It also considers the methods for crisis management and how JetBlue could have done even better.
A Valentine’s Day Card (A report Card)
On the basis of the Service Quality model (Parasuraman et al. 1985), JetBlue has been rated for the purposes of this paper on the five service quality determinants as demonstrated in the first hours of the snow storm crisis.
1. Reliability: The company did not have the ability to perform the promised service dependably. Grade: failed
2. Responsiveness: The company appeared to have no willingness to provide help or prompt service in the early stage of the crisis. Grade: Failed
3. Assurance: Without a contingency plan the front line employees had no knowledge to share with their passengers and they lost the trust and confidence of the passengers. Grade: Failed
4. Empathy: While individual crew had and attempted to demonstrate great empathy, leaving passengers without information and without alternatives was perceived as indifference. Grade: Failed
5. Tangibles: Insufficient appropriate physical facilities, equipment, personnel and communication materials left passengers improperly tended. Grade: Failed
The White Knight Appears
One might argue that the situation was beyond JetBlue’s control. After all no one can control the weather. However, David Neeleman never took that approach publicly. Just when most CEOs would have been hunkering down behind closed doors or blaming others, Neeleman stepped up to the plate and said and did something surprising and very wise. He took responsibility. He took action quickly and in a highly visible manner. He calmed the storm of controversy by doing something profound. He communicated heart felt apologies on every major media. He diffused the situation with the basic human skill of clearly communicating that he ‘got it’, that he was sorry and that he would make it right. David Neeleman wrote a public letter of apology to Jet Blue customers. The letter was in response to what Neeleman refers to as the worst operational week in Jet Blue's history. It starts ' We are sorry and embarrassed. But most of all, we are deeply sorry.' The letter's last paragraph starts 'You deserved better — a lot better — and we let you down . Nothing is more important than regaining your trust... ' The letter is short, direct and sincerely remorseful. (2)
He promised to make it right. His actions would make it right not just for this time but by introducing a customer’s bill of rights he made it clear that his intent was to make it right for all customers in the future as well. He made it concrete too. He announced a detailed list of how the company would treat passengers in troubling situations including the monetary compensation for delayed flights that escalated with the length of the delay. Neeleman chose the right path to diffuse anger and mend relationships.
Crisis Management
Crisis management cannot be distilled into a step by step recipe. Perhaps that is because the first ingredient may be rare. Winston Churchill said, "Courage is the first of human qualities because it is the quality that guarantees all others." Neeleman exhibited courage and he demonstrated creative thinking. Every situation is unique. Take for example, the Tylenol crisis that Johnson and Johnson had to bear, the snow storm that plagued Jet Blue and the Taco Bell e-coli incident. The only thing these events appear to have in common are that they are crises. Even so, appropriate tactics must be developed based on certain core principles that underlie successful crisis management for an event that cannot be predicted. This preparation enables an organization’s leadership to remain focused and effective as crises unfold.
At the following web address I found a wonderful listing of the seven basic principles for effective crisis management: :http://www.bioe2e.org/slides/BioE2E_Aug_6_03_handout_seven-principles.pdf
They are listed below with my additional comments added.
Seven basic principles underlay an appropriate and effective response to a crisis. They include:
Understand media interest in your story The media are the prime driver of most crises.... They are very much accustomed to the crisis environment in a way that executives are not. In fact, many reporters delight in the crisis environment in a way that executives do not. It is important to understand the media, much the way you understand your customers and competitors. Never rely exclusively on the media to deliver your message. I would add that it is vital to understand that the media’s mandate and the mandate of those managing the crisis for the company are very different. As long as the crisis is ongoing the media has a story and a motivation to keep it going.
Define the real problem and determine your strategy accordingly An organization must first make certain that it is addressing the core problem and not a vexing but ultimately tangential side issue. Once management has defined the problem, they can best determine the goals of the crisis management process and the strategy to drive it. The chosen strategy must be flexible and tailored to the problem management is trying to solve rather than be an artificially imposed standard of ‘good’ or ‘bad’ crisis management. To this I would add that it takes clear vision and a collaborative outlook along with fresh perspectives to ensure that the problem has been fully defined and that the path underfoot is the right path leading to the right solution. Course correction might be necessary at any point.
Ensure legal/regulatory compliance The appropriate response to a crisis is likely driven by SEC rules and/or guidelines set by other regulatory bodies such as the FDA. Securing in-house or external expertise on legal/regulatory parameters is essential prior to a crisis response. Obviously, the opinion must be solicited and obtained very quickly. Do not waste time consulting anyone on whom you will not feel confident in casting the entire weight of the dilemma. They must be informed of all the facts and then trusted for a reliable response.
Manage the flow of information The media often spread misinformation, deliberately or not. Such misinformation can flow back unchecked to internal audiences and distort internal perceptions and proper corporate decision-making. Therefore, aggressively managing the full flow of information is critically important in a crisis situation. This is a vital point. If the inner workings of your team begin to doubt the message or operate from a different play book the damage to the message and to the outcome could be incalculable. Just as dangerous is information that leaks from the company team in unauthorized versions. Every team member must understand who will do the talking for the company and abide by that decision faithfully.
Assume the situation will escalate and get worse Start with the understanding that the situation is likely to get worse before it gets better. Be careful not to be overly optimistic or make categorical statements early on in a crisis. This is a marathon and not a sprint. Rotation and adequate rest cycles must be implemented and enforced. Tired minds make mistakes and delegation is essential.
Remember all your constituencies Employ the best technology you have at your disposal to communicate directly and effectively to all constituencies. Caught in the pressure of a real crisis, companies often overlook direct communications to affected constituencies, such as employees and advisory boards. This is a key area where advance preparation can help.
Remember those who are most deeply affected and deal with them with particular attentiveness. Also remember marginal groups and those who maybe tangentially affected.
Measure results in real time Crises evolve. It is imperative that you continually measure the effectiveness of your crisis management tactics to evaluate the overall impact of your crisis management strategy. For large companies, omnibus surveys, select polling and focus groups can quickly generate useful data regarding the public perception of the problem even within the first 48 hours. For smaller companies, a few quick check-in phone calls with key constituents can provide appropriate feedback.
From the information that I have gathered, one thing JetBlue lacked was a crisis Web site. Neeleman did however, enter the on line conversation with sincerity and humility. JetBlue leveraged new Web 2.0 tools like YouTube in a manner that was unprecedented. Neeleman turned the tide with this approach and started a dialogue rather than a lynching. It is wise for companies to create website to refer those affected by the situation to offline and have them ready to go in case a crisis occurs. An 800 number for customers to contact should be set up in advance and be ready to activate or publicize should the need arise. Ideally, the website would be updated every hour. At the following site I found the valuable information listed below:
Ed McLaughlin is vice president of e-business strategy at SVM E-Business Solutions. He can be reached at: emclaughlin@svmsolutions.com.
http://www.bulldogreporter.com/dailydog/issues/1_1/dailydog_barks_bites/6824-1.html
Here are six steps you can take to prepare and implement your organization’s “Digital Crisis Management Strategy”—before bad news strikes:
1. Identify your digital crisis management team. Digital crisis management is going to require a team that has technical know-how and digital media savvy. You can rely on internal or external resources, but recognize that the team will need to be made up of writers, digital designers, web developers, audio and video producers, and people with expertise in PR, crisis management and online communications. You should form that team now; don’t wait for a crisis to occur.
2. Prepare crisis information websites around potential crisis topics. Imagine what could go wrong—and get ready. For example, a fast food company might create a website that anticipated a crisis related to a food-born illness, such as an E-coli outbreak. A consumer product company might anticipate that one of its products is recalled for safety reasons.
Such crisis sites should be designed to answer this question: “If a certain type of crisis occurs, what information could we provide right now about that type of crisis that will help to assure the public that we are responsible and conscientious corporate citizens, handling the crisis proactively, honestly and openly?”
These websites should be designed as templates, leaving open the space that will be filled with information on the “who, what, where, when and why” of an actual crisis. They should contain background information on your company related to the type of crisis the site addresses. Beyond informing the public during a crisis, these websites will help define your company on your terms, so the crisis and the media (new and old) don’t become the only defining factors.
In addition to background information, the sites should include a media center where the press can obtain information related to the crisis. And it should encourage visitors to sign-up for email notifications, keeping people up-to-date on the crisis and allowing you to establish a one-to-one relationship with members of the public, something valuable during and after the crisis.
Until a crisis strikes, these sites will be inaccessible to the public, locked behind a password protected login, but hosted on production level web servers, ready to be opened to the public at a moment’s notice.
3. Perform keyword research. When a crisis strikes, a company’s ability to communicate directly with the consumer is critical. Keyword research with tools commonly used by pay-per-click and search engine marketers will provide you with insights into the language of the consumer as it relates to your industry, your company and your products and services, which may be different from your “corporate” language. You will use that research to populate the content of your crisis website, optimizing it for search engines. And when a crisis strikes, you will also leverage those keywords to get top visibility and traffic from pay-per-click ads and social media sites.
4. Identify your points of distribution. You will need to know in advance where you will be connecting with the consumer and media: Google, Yahoo, MSN (through their pay-per-click and news channels); YouTube, MySpace, blogs, podcast sites and other social media sites; and online press release distribution services. All these, plus whatever new online outlets emerge between now and the time of your crisis, need to be identified.
5. Be launch-ready. The time to learn how to manage a pay-per-click campaign, or post a video to YouTube is now, not in the heat of a crisis. Start using an online press release distribution service for your day-to-day media relations and be sure to pick a service that posts to the news sites of the top search engines. Use podcasts, blogs and video casts now to promote your brand. Regularly review and revise your crisis website’s content. Incorporating these tools and practices into your work now ensures that you and your team will know how to use them before a crisis.
6. Launch! When a crisis strikes, your team rolls into action. The first step is to incorporate information on the actual crisis into the crisis website, including the steps your organization is taking to address it, and then to open that site to the public. You’ll then leverage your knowledge of digital media and your points of distribution to immediately propagate your information on the crisis online and drive people to your crisis website, where you can engage them on your terms. The process or revising, appending and distributing content will last until the crisis is over.
Ed McLaughlin goes on to add: “When a crisis strikes, your company will be on YouTube, on Google News, in blogs, popping up on cell phones and handhelds—emerging wherever digital media can be created and consumed. The question isn’t whether or not digital media will have an impact on a company during crisis—it might even be the cause of a crisis. The question is, during a crisis, will digital media manage your company or will you manage it?”
A Happier Valentine’s Day
The ideal situation would have been to have a plan in place for dealing with an entirely unpredictable and yet inevitable event like a terrible winter storm. It should not have been an unanticipated event that in the winter storms ground planes. Contingency planning is simply responsible management. If they could prepare the customer’s bill of rights (Appendix A) on the spot mid crisis it is clear that it could have been done in advance. Several questions and their answers should have been determined from the start on the premise that excellent customer service is not optional at any time under any condition. These might include:
1. In the event of a delay who will be notified and how?
2. IN the event of cancellation, how will the customer be compensated?
3. How will they be compensated for long delays?
4. Should a plane be grounded with customers aboard, how will we care for those people?
5. How can we arrange for deboarding in such an event?
6. How will we provide for food, beverages, restrooms and medical care?
7. How will we care for the particularly vulnerable such as the frail elderly and the babies?
8. How will we house passengers stranded by our airline.
9. Can we provide any resources to provide communication to loved ones, to entertain or comfort our passengers?
10. Do we have a response team in place with the proper level of authority to ensure implementation of all of the plans that we have made?
11. How will the internal communication system work in the event of crisis?
A Right Way and a Wrong Way
In the final analysis there is no perfect way to handle a crisis but there are right ways and
wrong ways to handle people and events. Here is a list of some of the most important.
• Crises require leaders. Step up to the plate and lead from the top. Any CEO who does not take visible leadership during a crisis should not be permitted to lead at any time in the future.
• Do not guess at what the problem is. Get accurate information from multiple sources. Make information gathering a priority. Delegate.
• Ideally there is a contingency plan to be activated. If not, be creative and think on your feet.
• Take responsibility. Denial, mitigating, justifying or diminishing responsibility in the early stages of a crisis while tempting reduces credibility and increases hostility.
• Sincerely apologize. No hedging!
• Silence is NOT golden. It causes people to speculate and catastrophize the situation building tension and anxiety. Tense, anxious people are more angry, more retailatory and less rational. Talk to people.
• Say it loud, say it proud and then do it!
• Doing nothing is not an option. Do something in a visible manner to allay people’s fears. Provide for basic needs immediately especially for the vulnerable.
• Do not leave people in the dark. If help has been initiated tell people. People will wait and they will cooperate if they understand that the company “gets it”, that they understand the problem and that they will address it.
• Have you identified all of those who are affected by this crisis? Do not leave out or ignore some people.
• Clearly state how you will make it right. Make the offer concrete. Lofty intangible promises of future changes have no value.
• Be media wise. You must shape your own message or it will be shaped for you and the outcome could be disastrous.
• Where possible deal with the vocal and the angry as soon as possible to prevent the building of discontent and hostility. Diffuse difficult situations and people as calmly and as quickly as possible.
• Ensure that all of your legal obligations are met. Get advice you trust from someone you trust and do not waste time in consultation with people whose input you are not prepared to go with.
• Multiple messages are deadly. There should be one unified message coming from authorized speakers.
• Do not panic if things get worse before they get better. This is the normal course of a crisis and this too shall pass!
Conclusion
cri•sis (krī'sĭs) n., pl.
1.
a. A crucial or decisive point or situation; a turning point.
b. An unstable condition, as in political, social, or economic affairs, involving an impending abrupt or decisive change.
2. A sudden change in the course of a disease or fever, toward either improvement or deterioration.
3. An emotionally stressful event or traumatic change in a person's life.
4. A point in a story or drama when a conflict reaches its highest tension and must be resolved.
[Middle English, from Latin, judgment, from Greek krisis, from krīnein, to separate, judge.]
The definitions above clarify and point to the solutions or opportunities within the crisis circumstance. In the final analysis, how a crisis is handled is how you and your company will be defined, separated from the pack and judged. If it’s a crisis: deal with it!
References
Valerie A Zeithami, and Bittner, Mary-Jo. (1996), Services Marketing
New York: McGraw Hill, ch 2
Cite source of the quote of the open letter to the public
:http://www.bioe2e.org/slides/BioE2E_Aug_6_03_handout_seven-principles.pdf
http://www.bulldogreporter.com/dailydog/issues/1_1/dailydog_barks_bites/6824-1.html
http://www.jetblue.com/about/ourcompany/promise/index.html
Appendix A
JetBlue’s Customer Bill of Rights
Bill of Rights information
Above all else, JetBlue Airways is dedicated to bringing humanity back to air travel. We strive to make every part of your experience as simple and as pleasant as possible. Unfortunately, there are times when things do not go as planned. If you’re inconvenienced as a result, we think it is important that you know exactly what you can expect from us. That’s why we created our Customer Bill of Rights. These Rights will always be subject to the highest level of safety and security for our customers and crewmembers.
Information
Cancellations
Departure Delays
Overbookings
Onboard Ground Delays
INFORMATION
JetBlue will notify customers of the following:
Delays prior to scheduled departure
Cancellations and their cause
Diversions and their cause
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CANCELLATIONS
All customers whose flight is canceled by JetBlue will, at the customer’s option, receive a full refund or reaccommodation on a future JetBlue flight at no additional charge or fare. If JetBlue cancels a flight within 12 hours of scheduled departure and the cancellation is due to a Controllable Irregularity, JetBlue will also provide the customer with a Voucher valid for future travel on JetBlue in the amount paid by the customer for the roundtrip (or the oneway trip, doubled).
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DEPARTURE DELAYS
1. Customers whose flight is delayed prior to scheduled departure for 1-1:59 hours due to a Controllable Irregularity are entitled to a $25 Voucher good for future travel on JetBlue.
2. Customers whose flight is delayed prior to scheduled departure for 2-3:59 hours due to a Controllable Irregularity are entitled to a $50 Voucher good for future travel on JetBlue.
3. Customers whose flight is delayed prior to scheduled departure for 4-5:59 hours due to a Controllable Irregularity are entitled to a Voucher good for future travel on JetBlue in the amount paid by the customer for the oneway trip.
4. Customers whose flight is delayed prior to scheduled departure for 6 or more hours due to a Controllable Irregularity are entitled to a Voucher good for future travel on JetBlue in the amount paid by the customer for the roundtrip (or the oneway trip, doubled).
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OVERBOOKINGS (As defined in JetBlue’s Contract of Carriage)
Customers who are involuntarily denied boarding shall receive $1,000.
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ONBOARD GROUND DELAYS
For customers who experience an onboard Ground Delay for more than 5 hours, JetBlue will take necessary action so that customers may deplane. JetBlue will also provide customers experiencing an onboard Ground Delay with food and drink, access to restrooms and, as necessary, medical treatment.
Arrivals:
1. Customers who experience an onboard Ground Delay on Arrival for 30-59 minutes after scheduled arrival time are entitled to a $25 Voucher good for future travel on JetBlue.
2. Customers who experience an onboard Ground Delay on Arrival for 1-1:59 hours after scheduled arrival time are entitled to a $100 Voucher good for future travel on JetBlue.
3. Customers who experience an onboard Ground Delay on Arrival for 2-2:59 hours after scheduled arrival time are entitled to a Voucher good for future travel on JetBlue in the amount paid by the customer for the oneway trip, or $100, whichever is greater.
4. Customers who experience an onboard Ground Delay on Arrival for 3 or more hours after scheduled arrival time are entitled to a Voucher good for future travel on JetBlue in the amount paid by the customer for the roundtrip (or the oneway trip, doubled).
Departures:
1. Customers who experience an onboard Ground Delay on Departure for 3-3:59 hours are entitled to a $100 Voucher good for future travel on JetBlue.
2. Customers who experience an onboard Ground Delay on Departure for 4 or more hours are entitled to a Voucher good for future travel on JetBlue in the amount paid by the customer for the roundtrip (or the oneway trip, doubled).
by Debra J. Smith
Executive Summary
On Valentine’s Day, 2007 JetBlue, a company known for stellar customer service was forced by a severe winter storm to cancel 1,095 flights stranding thousand of customers.It immediately became clear that the company had no contingency plan in place to handle such an event. In the first hours of the crisis the company failed on every measure of service quality. Disgruntled passengers armed with today’s technology broadcast their plight on the internet and in the media. JetBlue had a full blown crisis on its hands. This paper outlines the crisis and the delayed but finally quite effective response of JetBlue’s CEO David Neeleman. While acknowledging that every crisis is unique, seven basic principles for effective crisis management are reported along with six steps for digital crisis management. In the final analysis, however, the best solution is to have a contingency plan in place to deal with events which may be impossible to predict but essential to prepare for. In the final analysis a crisis must be defined and met head on.
The Crisis
On Valentines Day 2007 Jet Blue, a company that was known for stellar customer service blew it. They really blew it. When a snow storm hit the East Coast of the United States they were forced to cancel 1,096 flights the result of which was that thousands of passengers and flight crews were stranded. In the first twelve hours JetBlue demonstrated that it had no contingency plan for such an event. People were stranded for up to nine hours on planes with nothing to do. Passengers were literally left out in the cold for hours on end without food, proper rest room facilities or basic necessities. People were not happy and with today’s technology they vented that displeasure onto the world wide web and in the media. Pictures from cell phones and blogs from stranded passengers became immediately available for anyone who wanted to commiserate. This blunder could have ushered in the end of JetBlue. This paper discusses how JetBlue failed its customers and how it redeemed itself. It also considers the methods for crisis management and how JetBlue could have done even better.
A Valentine’s Day Card (A report Card)
On the basis of the Service Quality model (Parasuraman et al. 1985), JetBlue has been rated for the purposes of this paper on the five service quality determinants as demonstrated in the first hours of the snow storm crisis.
1. Reliability: The company did not have the ability to perform the promised service dependably. Grade: failed
2. Responsiveness: The company appeared to have no willingness to provide help or prompt service in the early stage of the crisis. Grade: Failed
3. Assurance: Without a contingency plan the front line employees had no knowledge to share with their passengers and they lost the trust and confidence of the passengers. Grade: Failed
4. Empathy: While individual crew had and attempted to demonstrate great empathy, leaving passengers without information and without alternatives was perceived as indifference. Grade: Failed
5. Tangibles: Insufficient appropriate physical facilities, equipment, personnel and communication materials left passengers improperly tended. Grade: Failed
The White Knight Appears
One might argue that the situation was beyond JetBlue’s control. After all no one can control the weather. However, David Neeleman never took that approach publicly. Just when most CEOs would have been hunkering down behind closed doors or blaming others, Neeleman stepped up to the plate and said and did something surprising and very wise. He took responsibility. He took action quickly and in a highly visible manner. He calmed the storm of controversy by doing something profound. He communicated heart felt apologies on every major media. He diffused the situation with the basic human skill of clearly communicating that he ‘got it’, that he was sorry and that he would make it right. David Neeleman wrote a public letter of apology to Jet Blue customers. The letter was in response to what Neeleman refers to as the worst operational week in Jet Blue's history. It starts ' We are sorry and embarrassed. But most of all, we are deeply sorry.' The letter's last paragraph starts 'You deserved better — a lot better — and we let you down . Nothing is more important than regaining your trust... ' The letter is short, direct and sincerely remorseful. (2)
He promised to make it right. His actions would make it right not just for this time but by introducing a customer’s bill of rights he made it clear that his intent was to make it right for all customers in the future as well. He made it concrete too. He announced a detailed list of how the company would treat passengers in troubling situations including the monetary compensation for delayed flights that escalated with the length of the delay. Neeleman chose the right path to diffuse anger and mend relationships.
Crisis Management
Crisis management cannot be distilled into a step by step recipe. Perhaps that is because the first ingredient may be rare. Winston Churchill said, "Courage is the first of human qualities because it is the quality that guarantees all others." Neeleman exhibited courage and he demonstrated creative thinking. Every situation is unique. Take for example, the Tylenol crisis that Johnson and Johnson had to bear, the snow storm that plagued Jet Blue and the Taco Bell e-coli incident. The only thing these events appear to have in common are that they are crises. Even so, appropriate tactics must be developed based on certain core principles that underlie successful crisis management for an event that cannot be predicted. This preparation enables an organization’s leadership to remain focused and effective as crises unfold.
At the following web address I found a wonderful listing of the seven basic principles for effective crisis management: :http://www.bioe2e.org/slides/BioE2E_Aug_6_03_handout_seven-principles.pdf
They are listed below with my additional comments added.
Seven basic principles underlay an appropriate and effective response to a crisis. They include:
Understand media interest in your story The media are the prime driver of most crises.... They are very much accustomed to the crisis environment in a way that executives are not. In fact, many reporters delight in the crisis environment in a way that executives do not. It is important to understand the media, much the way you understand your customers and competitors. Never rely exclusively on the media to deliver your message. I would add that it is vital to understand that the media’s mandate and the mandate of those managing the crisis for the company are very different. As long as the crisis is ongoing the media has a story and a motivation to keep it going.
Define the real problem and determine your strategy accordingly An organization must first make certain that it is addressing the core problem and not a vexing but ultimately tangential side issue. Once management has defined the problem, they can best determine the goals of the crisis management process and the strategy to drive it. The chosen strategy must be flexible and tailored to the problem management is trying to solve rather than be an artificially imposed standard of ‘good’ or ‘bad’ crisis management. To this I would add that it takes clear vision and a collaborative outlook along with fresh perspectives to ensure that the problem has been fully defined and that the path underfoot is the right path leading to the right solution. Course correction might be necessary at any point.
Ensure legal/regulatory compliance The appropriate response to a crisis is likely driven by SEC rules and/or guidelines set by other regulatory bodies such as the FDA. Securing in-house or external expertise on legal/regulatory parameters is essential prior to a crisis response. Obviously, the opinion must be solicited and obtained very quickly. Do not waste time consulting anyone on whom you will not feel confident in casting the entire weight of the dilemma. They must be informed of all the facts and then trusted for a reliable response.
Manage the flow of information The media often spread misinformation, deliberately or not. Such misinformation can flow back unchecked to internal audiences and distort internal perceptions and proper corporate decision-making. Therefore, aggressively managing the full flow of information is critically important in a crisis situation. This is a vital point. If the inner workings of your team begin to doubt the message or operate from a different play book the damage to the message and to the outcome could be incalculable. Just as dangerous is information that leaks from the company team in unauthorized versions. Every team member must understand who will do the talking for the company and abide by that decision faithfully.
Assume the situation will escalate and get worse Start with the understanding that the situation is likely to get worse before it gets better. Be careful not to be overly optimistic or make categorical statements early on in a crisis. This is a marathon and not a sprint. Rotation and adequate rest cycles must be implemented and enforced. Tired minds make mistakes and delegation is essential.
Remember all your constituencies Employ the best technology you have at your disposal to communicate directly and effectively to all constituencies. Caught in the pressure of a real crisis, companies often overlook direct communications to affected constituencies, such as employees and advisory boards. This is a key area where advance preparation can help.
Remember those who are most deeply affected and deal with them with particular attentiveness. Also remember marginal groups and those who maybe tangentially affected.
Measure results in real time Crises evolve. It is imperative that you continually measure the effectiveness of your crisis management tactics to evaluate the overall impact of your crisis management strategy. For large companies, omnibus surveys, select polling and focus groups can quickly generate useful data regarding the public perception of the problem even within the first 48 hours. For smaller companies, a few quick check-in phone calls with key constituents can provide appropriate feedback.
From the information that I have gathered, one thing JetBlue lacked was a crisis Web site. Neeleman did however, enter the on line conversation with sincerity and humility. JetBlue leveraged new Web 2.0 tools like YouTube in a manner that was unprecedented. Neeleman turned the tide with this approach and started a dialogue rather than a lynching. It is wise for companies to create website to refer those affected by the situation to offline and have them ready to go in case a crisis occurs. An 800 number for customers to contact should be set up in advance and be ready to activate or publicize should the need arise. Ideally, the website would be updated every hour. At the following site I found the valuable information listed below:
Ed McLaughlin is vice president of e-business strategy at SVM E-Business Solutions. He can be reached at: emclaughlin@svmsolutions.com.
http://www.bulldogreporter.com/dailydog/issues/1_1/dailydog_barks_bites/6824-1.html
Here are six steps you can take to prepare and implement your organization’s “Digital Crisis Management Strategy”—before bad news strikes:
1. Identify your digital crisis management team. Digital crisis management is going to require a team that has technical know-how and digital media savvy. You can rely on internal or external resources, but recognize that the team will need to be made up of writers, digital designers, web developers, audio and video producers, and people with expertise in PR, crisis management and online communications. You should form that team now; don’t wait for a crisis to occur.
2. Prepare crisis information websites around potential crisis topics. Imagine what could go wrong—and get ready. For example, a fast food company might create a website that anticipated a crisis related to a food-born illness, such as an E-coli outbreak. A consumer product company might anticipate that one of its products is recalled for safety reasons.
Such crisis sites should be designed to answer this question: “If a certain type of crisis occurs, what information could we provide right now about that type of crisis that will help to assure the public that we are responsible and conscientious corporate citizens, handling the crisis proactively, honestly and openly?”
These websites should be designed as templates, leaving open the space that will be filled with information on the “who, what, where, when and why” of an actual crisis. They should contain background information on your company related to the type of crisis the site addresses. Beyond informing the public during a crisis, these websites will help define your company on your terms, so the crisis and the media (new and old) don’t become the only defining factors.
In addition to background information, the sites should include a media center where the press can obtain information related to the crisis. And it should encourage visitors to sign-up for email notifications, keeping people up-to-date on the crisis and allowing you to establish a one-to-one relationship with members of the public, something valuable during and after the crisis.
Until a crisis strikes, these sites will be inaccessible to the public, locked behind a password protected login, but hosted on production level web servers, ready to be opened to the public at a moment’s notice.
3. Perform keyword research. When a crisis strikes, a company’s ability to communicate directly with the consumer is critical. Keyword research with tools commonly used by pay-per-click and search engine marketers will provide you with insights into the language of the consumer as it relates to your industry, your company and your products and services, which may be different from your “corporate” language. You will use that research to populate the content of your crisis website, optimizing it for search engines. And when a crisis strikes, you will also leverage those keywords to get top visibility and traffic from pay-per-click ads and social media sites.
4. Identify your points of distribution. You will need to know in advance where you will be connecting with the consumer and media: Google, Yahoo, MSN (through their pay-per-click and news channels); YouTube, MySpace, blogs, podcast sites and other social media sites; and online press release distribution services. All these, plus whatever new online outlets emerge between now and the time of your crisis, need to be identified.
5. Be launch-ready. The time to learn how to manage a pay-per-click campaign, or post a video to YouTube is now, not in the heat of a crisis. Start using an online press release distribution service for your day-to-day media relations and be sure to pick a service that posts to the news sites of the top search engines. Use podcasts, blogs and video casts now to promote your brand. Regularly review and revise your crisis website’s content. Incorporating these tools and practices into your work now ensures that you and your team will know how to use them before a crisis.
6. Launch! When a crisis strikes, your team rolls into action. The first step is to incorporate information on the actual crisis into the crisis website, including the steps your organization is taking to address it, and then to open that site to the public. You’ll then leverage your knowledge of digital media and your points of distribution to immediately propagate your information on the crisis online and drive people to your crisis website, where you can engage them on your terms. The process or revising, appending and distributing content will last until the crisis is over.
Ed McLaughlin goes on to add: “When a crisis strikes, your company will be on YouTube, on Google News, in blogs, popping up on cell phones and handhelds—emerging wherever digital media can be created and consumed. The question isn’t whether or not digital media will have an impact on a company during crisis—it might even be the cause of a crisis. The question is, during a crisis, will digital media manage your company or will you manage it?”
A Happier Valentine’s Day
The ideal situation would have been to have a plan in place for dealing with an entirely unpredictable and yet inevitable event like a terrible winter storm. It should not have been an unanticipated event that in the winter storms ground planes. Contingency planning is simply responsible management. If they could prepare the customer’s bill of rights (Appendix A) on the spot mid crisis it is clear that it could have been done in advance. Several questions and their answers should have been determined from the start on the premise that excellent customer service is not optional at any time under any condition. These might include:
1. In the event of a delay who will be notified and how?
2. IN the event of cancellation, how will the customer be compensated?
3. How will they be compensated for long delays?
4. Should a plane be grounded with customers aboard, how will we care for those people?
5. How can we arrange for deboarding in such an event?
6. How will we provide for food, beverages, restrooms and medical care?
7. How will we care for the particularly vulnerable such as the frail elderly and the babies?
8. How will we house passengers stranded by our airline.
9. Can we provide any resources to provide communication to loved ones, to entertain or comfort our passengers?
10. Do we have a response team in place with the proper level of authority to ensure implementation of all of the plans that we have made?
11. How will the internal communication system work in the event of crisis?
A Right Way and a Wrong Way
In the final analysis there is no perfect way to handle a crisis but there are right ways and
wrong ways to handle people and events. Here is a list of some of the most important.
• Crises require leaders. Step up to the plate and lead from the top. Any CEO who does not take visible leadership during a crisis should not be permitted to lead at any time in the future.
• Do not guess at what the problem is. Get accurate information from multiple sources. Make information gathering a priority. Delegate.
• Ideally there is a contingency plan to be activated. If not, be creative and think on your feet.
• Take responsibility. Denial, mitigating, justifying or diminishing responsibility in the early stages of a crisis while tempting reduces credibility and increases hostility.
• Sincerely apologize. No hedging!
• Silence is NOT golden. It causes people to speculate and catastrophize the situation building tension and anxiety. Tense, anxious people are more angry, more retailatory and less rational. Talk to people.
• Say it loud, say it proud and then do it!
• Doing nothing is not an option. Do something in a visible manner to allay people’s fears. Provide for basic needs immediately especially for the vulnerable.
• Do not leave people in the dark. If help has been initiated tell people. People will wait and they will cooperate if they understand that the company “gets it”, that they understand the problem and that they will address it.
• Have you identified all of those who are affected by this crisis? Do not leave out or ignore some people.
• Clearly state how you will make it right. Make the offer concrete. Lofty intangible promises of future changes have no value.
• Be media wise. You must shape your own message or it will be shaped for you and the outcome could be disastrous.
• Where possible deal with the vocal and the angry as soon as possible to prevent the building of discontent and hostility. Diffuse difficult situations and people as calmly and as quickly as possible.
• Ensure that all of your legal obligations are met. Get advice you trust from someone you trust and do not waste time in consultation with people whose input you are not prepared to go with.
• Multiple messages are deadly. There should be one unified message coming from authorized speakers.
• Do not panic if things get worse before they get better. This is the normal course of a crisis and this too shall pass!
Conclusion
cri•sis (krī'sĭs) n., pl.
1.
a. A crucial or decisive point or situation; a turning point.
b. An unstable condition, as in political, social, or economic affairs, involving an impending abrupt or decisive change.
2. A sudden change in the course of a disease or fever, toward either improvement or deterioration.
3. An emotionally stressful event or traumatic change in a person's life.
4. A point in a story or drama when a conflict reaches its highest tension and must be resolved.
[Middle English, from Latin, judgment, from Greek krisis, from krīnein, to separate, judge.]
The definitions above clarify and point to the solutions or opportunities within the crisis circumstance. In the final analysis, how a crisis is handled is how you and your company will be defined, separated from the pack and judged. If it’s a crisis: deal with it!
References
Valerie A Zeithami, and Bittner, Mary-Jo. (1996), Services Marketing
New York: McGraw Hill, ch 2
Cite source of the quote of the open letter to the public
:http://www.bioe2e.org/slides/BioE2E_Aug_6_03_handout_seven-principles.pdf
http://www.bulldogreporter.com/dailydog/issues/1_1/dailydog_barks_bites/6824-1.html
http://www.jetblue.com/about/ourcompany/promise/index.html
Appendix A
JetBlue’s Customer Bill of Rights
Bill of Rights information
Above all else, JetBlue Airways is dedicated to bringing humanity back to air travel. We strive to make every part of your experience as simple and as pleasant as possible. Unfortunately, there are times when things do not go as planned. If you’re inconvenienced as a result, we think it is important that you know exactly what you can expect from us. That’s why we created our Customer Bill of Rights. These Rights will always be subject to the highest level of safety and security for our customers and crewmembers.
Information
Cancellations
Departure Delays
Overbookings
Onboard Ground Delays
INFORMATION
JetBlue will notify customers of the following:
Delays prior to scheduled departure
Cancellations and their cause
Diversions and their cause
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CANCELLATIONS
All customers whose flight is canceled by JetBlue will, at the customer’s option, receive a full refund or reaccommodation on a future JetBlue flight at no additional charge or fare. If JetBlue cancels a flight within 12 hours of scheduled departure and the cancellation is due to a Controllable Irregularity, JetBlue will also provide the customer with a Voucher valid for future travel on JetBlue in the amount paid by the customer for the roundtrip (or the oneway trip, doubled).
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DEPARTURE DELAYS
1. Customers whose flight is delayed prior to scheduled departure for 1-1:59 hours due to a Controllable Irregularity are entitled to a $25 Voucher good for future travel on JetBlue.
2. Customers whose flight is delayed prior to scheduled departure for 2-3:59 hours due to a Controllable Irregularity are entitled to a $50 Voucher good for future travel on JetBlue.
3. Customers whose flight is delayed prior to scheduled departure for 4-5:59 hours due to a Controllable Irregularity are entitled to a Voucher good for future travel on JetBlue in the amount paid by the customer for the oneway trip.
4. Customers whose flight is delayed prior to scheduled departure for 6 or more hours due to a Controllable Irregularity are entitled to a Voucher good for future travel on JetBlue in the amount paid by the customer for the roundtrip (or the oneway trip, doubled).
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OVERBOOKINGS (As defined in JetBlue’s Contract of Carriage)
Customers who are involuntarily denied boarding shall receive $1,000.
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ONBOARD GROUND DELAYS
For customers who experience an onboard Ground Delay for more than 5 hours, JetBlue will take necessary action so that customers may deplane. JetBlue will also provide customers experiencing an onboard Ground Delay with food and drink, access to restrooms and, as necessary, medical treatment.
Arrivals:
1. Customers who experience an onboard Ground Delay on Arrival for 30-59 minutes after scheduled arrival time are entitled to a $25 Voucher good for future travel on JetBlue.
2. Customers who experience an onboard Ground Delay on Arrival for 1-1:59 hours after scheduled arrival time are entitled to a $100 Voucher good for future travel on JetBlue.
3. Customers who experience an onboard Ground Delay on Arrival for 2-2:59 hours after scheduled arrival time are entitled to a Voucher good for future travel on JetBlue in the amount paid by the customer for the oneway trip, or $100, whichever is greater.
4. Customers who experience an onboard Ground Delay on Arrival for 3 or more hours after scheduled arrival time are entitled to a Voucher good for future travel on JetBlue in the amount paid by the customer for the roundtrip (or the oneway trip, doubled).
Departures:
1. Customers who experience an onboard Ground Delay on Departure for 3-3:59 hours are entitled to a $100 Voucher good for future travel on JetBlue.
2. Customers who experience an onboard Ground Delay on Departure for 4 or more hours are entitled to a Voucher good for future travel on JetBlue in the amount paid by the customer for the roundtrip (or the oneway trip, doubled).
Thursday, January 27, 2011
Davos 2011: Nicolas Sarkozy 'will not let euro fail'
French President Nicolas Sarkozy has said France and Germany will never let the euro fail.He acknowledged concerns about the future of the euro following bail-outs of Greece and the Irish Republic, as he addressed the World Economic Forum."Whether it be [German] Chancellor Merkel or myself, never will we turn our backs on the euro. Never will we abandon the euro," he said.
He added that those who bet against the euro should watch out for their money.
"The euro spells Europe. The euro is Europe and Europe has spelled 60 years of peace on our continent, therefore we will never let the euro go or be destroyed," he insisted.France currently holds the presidency of the G20 and Mr Sarkozy was speaking about his vision for the group.
He is keen to negotiate a deal on currency reform during his tenure. But his call for a new international monetary system has received a cool response from the US, which sees it as an attempt to undermine the dollar. The French president said he was not trying to weaken the US currency, adding that France was "deeply attached" to its friendship with the US.
"The dollar will continue to be the world's number one currency," he said.
He added that those who bet against the euro should watch out for their money.
"The euro spells Europe. The euro is Europe and Europe has spelled 60 years of peace on our continent, therefore we will never let the euro go or be destroyed," he insisted.France currently holds the presidency of the G20 and Mr Sarkozy was speaking about his vision for the group.
He is keen to negotiate a deal on currency reform during his tenure. But his call for a new international monetary system has received a cool response from the US, which sees it as an attempt to undermine the dollar. The French president said he was not trying to weaken the US currency, adding that France was "deeply attached" to its friendship with the US.
"The dollar will continue to be the world's number one currency," he said.
Wednesday, January 26, 2011
Can UN human rights guide for businesses work? By James Melik
Companies ignore the human rights of some governments so they can acquire cheap labour
Ethics arrive in business schools
New standards governing the operation of multinational companies do not go far enough to protect human rights if the framework is adopted in its current form, according to leading rights groups. Proposals drawn up by Harvard professor John Ruggie, the United Nations (UN) special representative for business and human rights, are being set up as global benchmarks.
"The point is to help devise universally acceptable rules for businesses, whether they are transnational or national, large or small, to better manage their adverse impacts on people and communities," says Dr Ruggie.
A list of standards for businesses have been drawn up to protect workers, local communities and the environment. The system is meant to work by assessing the risk of abuses, and setting up grievance mechanisms.
"The international community has become increasingly concerned with large scale impact of businesses in the mining industry, the oil industry, and the operation of sweatshops, so the UN has set out to develop a consensus around viable rules for better corporate practices," he says.
'Weak formulation'
The guidelines have received widespread government backing, they have been broadly welcomed by business, and the UN's Human Rights Council is expected to adopt them, in June. However, pressure groups such as Human Rights Watch have suggested that, as they stand, they are inadequate."By better managing their conflicts with workers and communities, corporations will be more sustainable in the long run” Professor John Ruggie
UN special representative
The guide encourages companies to protect employees, local communities and the environment, and to end corporate abuses, especially in low-cost sweatshops, the oil industry and in extractive industries.Audrey Gaughran, of the human rights organisation Amnesty International, points out that the UN Committee on Economic, Social and Cultural Rights has already enshrined what Professor Ruggie is suggesting. "For corporations to comply with their international obligations in relation to article 12, parties have to respect the enjoyment of the right to health in other countries, and to prevent third parties from violating the right in other countries, if they are able to influence these third parties by way of legal or political means, in accordance with the Charter of the United Nations and applicable international law," she says.
By contrast, Professor Ruggie's draft proposals say:
"States should encourage business enterprises domiciled in their territory and/or jurisdiction to respect human rights throughout their global operations, including those conducted by their subsidiaries and other related legal entities." Ms Gaughran insists this is a much weaker formulation. "The first requires concrete action," she says, "The second requires nothing specific and would be interpreted by many as requiring nothing at all."
Social sustainability
Some observers say the proposals are just a way to tame capitalism and while Professor Ruggie says that is not a bad description, he believes it is taming it it for its own sustainability. "This is really about the social sustainability of enterprises. By better managing their conflicts with workers and communities, corporations will be more sustainable in the long run."The guiding principles have not been adopted yet. They are available for public discussion until the end of January. "At the end of the month I will collect all of the comments which have been made, reflect on them, revise the final text, and then admit it for approval," he says.
"From the world of business we have had an excellent response.Just like a law against murder does not absolutely prevent murder, it can certainly reduce the number of cases” Professor John Ruggie
UN special representative
Professor Ruggie points out that he is not talking about companies that operate in countries such as Denmark, but those that operate in higher risk environments."Such companies are increasingly paying a high cost if they get it wrong, and they are quite willing to participate in various pilot projects to try to get it right," he says."Oil and gas companies are increasingly finding that their big risk factor is not financing, nor technical risk, it is what they call stakeholder risk - a push-back from communities in which they operate - whether it is indigenous or whatever, and they are looking for tools to manage these non-technical risks," he says.He recalls one anecdote at a speech given by a senior person in one of the international oil companies:"No petroleum or mining engineer would dream of drilling a hole in the ground without doing extensive seismic analysis - now they have to learn how to do social seismic analysis because that is where their problems are coming from."
Cost of failure
Some companies are already road-testing the proposals. "We are conducting a number of pilot projects in five countries, including Russia and China and Colombia," Professor Ruggie says.People are often made to work in hazardous conditions without proper protective clothing "Our team members visit these places to see if they are working as they are supposed to be and that their reports correspond to reality on the ground." There can be dire consequences if companies forget their duty to fundamental human rights."People can die. It happens all the time. It happens too frequently," Professor Ruggie says.
"To take an example that everyone knows about - Shell in Nigeria. Ken Saro-Wiwa and a number of his colleagues were executed by the military for issues that were related to demonstrations against Shell," he recalls.
"Demonstrations had gone on for many years because of gas flaring and pollution of the rivers, and it escalated to such an extent that the military was called in and they trumped up charges against the Ogoni and executed them.
"I am positive that everybody in the UK government at the time and everybody in Shell today wish things had gone differently."These guidelines can certainly reduce the number of incidents, but just like a law against murder does not absolutely prevent murder, it can certainly reduce the number of cases."
However, Audrey Gaughran feels that the guidelines will be undermined because "both company structure and globalised company operations facilitate corporate evasion of state jurisdiction".She maintains that the legal framework has not kept pace with the realities of globalisation. "While economic interests have been able to make the law work for them, those most affected by their operations have often seen the law and protection of the law recede in the face of corporate power," she says."The need to attract foreign investment, and provisions in trade and investment agreements have all squeezed any protection the law can provide for people affected by corporate operations - particularly in developing countries."
Tuesday, January 25, 2011
Whose Profit?
Too many people think only of their own profit. But business opportunity seldom knocks on the door of self-centered people. No customer ever goes to a store merely to please the storekeeper.
Kazuo Inamori
Kazuo Inamori
Report: Urgent action needed to avert global hunger
By Pallab Ghosh Science correspondent, BBC News
The report calls for an urgent change to food production in order to feed future generations
A UK government-commissioned study into food security has called for urgent action to avert global hunger.
The Foresight Report on Food and Farming Futures says the current system is unsustainable and will fail to end hunger unless radically redesigned.It is the first study across a range of disciplines deemed to have put such fears on a firm analytical footing.The report is the culmination of a two-year study, involving 400 experts from 35 countries.
According to the government's chief scientific adviser, Professor Sir John Beddington, the study provides compelling evidence for governments to act now.The report emphasises changes to farming, to ensure that increasing yields does not come at the expense of sustainability and to provide incentives to the agricultural sector that address malnutrition. It also recommends that the most resource-intensive types of food are curbed and that waste is minimised in food production."We know in the next 20 years the world population will increase to something like 8.3 billion people," he told BBC News.
"We know that urbanisation is going to be a driver and that something of the order of 65-70% of the world's population will be living in cities at that time. "We know that the world is getting more prosperous and that the demand for basic commodities - food, water and energy - will be rising as that prosperity increases, increasing at the same time as the population."
He warned: "We have 20 years to arguably deliver something of the order of 40% more food; 30% more available fresh water and of the order of 50% more energy. "We can't wait 20 years or 10 years indeed - this is really urgent."
Radical changes
Professor Beddington commissioned the study and was among the first to warn of "a perfect storm" of a growing population, climate change and diminishing resources for food production. The Foresight report says that the food production system will need to be radically changed, not just to produce more food but to produce it sustainably.
"There is an urgency in taking what may be very difficult policy decisions," the authors say.
"(But) 925 million people suffer hunger and perhaps a further billion lack micronutrients. The task is difficult because the food system is working for the majority of people but those at risk of hunger have least influence on decision-making."Professor Beddington also said he viewed the billion people who overeat and are therefore obese as another symptom of the failure of the food production system to deliver good health and well-being to the world's growing population. The report says that "piecemeal" changes are not an option: "Nothing less is required than a redesign of the whole food system to bring sustainability to the fore."The authors are calling for food and agriculture to move up the political agenda and be co-ordinated with efforts to tackle the impact of climate change, water and energy supplies and the loss of farm land.
They also warn that there is no "silver bullet" that will solve the problem but concerted action is needed on many fronts.
Facing reality
Professor Beddington said: "We've got to actually face up to the fact that this is a complicated problem which involves vastly different levels of society and we need to be persuading policy makers not to think about food in isolation, not to think about climate change in isolation, not to think about water in isolation, not to think about energy in isolation. All of them are intimately related." The report adds that new research can play an important role. It also says that the use of any particular technology, such as genetic modification, cloning and nanotechnology should not be ruled out. But it acknowledges that there is resistance to the application of controversial technologies."Achieving a strong evidence base (of the safety or otherwise) in controversial areas is not enough. Genuine public debate needs to play a crucial role," the report says.
However, by assessing 40 success stories from Africa the report authors say the spread of existing best-practice could treble food production. "Ending hunger is one of the greatest challenges to be considered by this project," the report observes.It calls for protection of the poorest from sharp price increases through government intervention and greater liberalisation of the trade in food in order to offset market volatility.
They also note that China has invested heavily in agriculture and is consequently one of the few countries to have met the Millenium Development Goal (MDG) of halving hunger. The report also calls for new measures to hold governments and food producers to account. This would involve developing objective measures on how well they are doing to reduce hunger, combat climate change and environmental degradation and boosting food production.
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