Troubled firms busy with damage control

By Yoon Ja-young

Readers of The Korea Times may have noticed notices of apology from companies that caused problems during the past few months.

These follow the communication manual for crisis management, but apologies without an overhaul of the system that gave rise to it is only allowing the same problem to happen again and again.

On March 8, KT ran an advertisement on the front page of The Korea Times and a number of local dailies. It apologized for leaks of personal information data, saying, “We will change ourselves totally, taking customer information as valuable as our life.”

The apology went on, “We will rectify wrong policies so that such accidents won’t happen again, and innovate our security system from ground zero as soon as possible…We apologize, again.”

It was not the first personal data leak this year. On the front page of the Jan. 22 edition of The Korea Times, Lotte Card, KB Kookmin Card and NH Card jointly ran an apology, following an apology by KB Kookmin Card in the newspaper of the previous day.

It read, “We will be credit card companies that take customer information as seriously as our lives.” There was apology for an incident other than the personal data leak as well. GS Caltex ran an apology for an oil leak on Feb. 11.

James Chung, CEO of Strategy Salad, a crisis management consultancy, said it is a part of the crisis management manual to run the apology advertisement. “When a business faces crisis, there are two sides to deal with.

“The management of the current situation will be done by IT or the security team, improving the internal system. The communication team and CEO line will deal with communication, taking care of the company’s reputation, customer trust and corporate image,” he said.

Chung warned that such an approach may not work if the same problem repeats itself, pointing out that we have seen too many front-page apologies during the past few months. “I think it’s the problem of controlling crisis rather than the problem of communication. After going through a certain crisis, let’s name it “Crisis A,” you communicate to customers that you will do your best to prevent it. However, you do it in words only. You say you will make efforts for prevention, but you don’t make efforts,” he said, pointing out that NH, Kookmin Bank and KT already have had customer data leaks on a few occasions. They are going through the same kind of crisis again and again.

The crisis management expert expected that as the customer information data leaks continue, they may not be categorized as crises in the future. “As it occurs again, the media will criticize the companies, and the companies will make apologies following the manual. It will be like an annual event. Customers may become immune.”

Regarding the data leak, Professor Kim Seung-joo at Korea University said that the country is experiencing the same problem, though there was not much progress in hacking technology. “The fundamental problem is that the companies have no idea where the channels of the leak are. You should first find out how many gates are there in the wall, and locate guards or shut the gates, minimizing the channels, but neither the government nor the companies are doing this.”

He also pointed out that the penalties are too lenient on the firms that cause crises. “Target in the United States faced $3.6 billion in compensation for customers for its data breach. Penalties here, costing a mere 6 million won or 10 million won, won’t change anything.”