2.0 Outstanding Management Incidents/Stories/Anecdotes
2.1 How South Korea Is Beating Coronavirus Without a Lockdown
As of May 4, 2020, South Korea had just over 10.801 confirmed coronavirus cases, which puts it among
the top 10 countries for total cases. But South Korea has another distinction: Health experts are noting that
recently the nation has managed to significantly slow the number of new cases. And the country appears
to have reined in the outbreak without some of the strict lockdown strategies deployed elsewhere in the
world. Instead of physical lockdown, they fought the virus through an epidemiological approach such as
wide diagnostic testing and isolation of contacts, while encouraging people’s voluntary cooperation for
social distancing. They believed this was more effective than forcible measures and indeed it paid off.
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It wasn’t looking good for South Korea in mid-February. The nation had the world’s second highest
number of coronavirus cases after China, owing to a cluster of infections that arose from the Shincheonji
Church in the city of Daegu, some 150 miles south of the capital Seoul. But thanks to early preparations,
and a robust public health response based around extensive testing and tech-powered contact tracing, the
nation’s tally of infections has been kept to just 10,801, about half directly related to Shincheonji. More
impressive still, no major lockdown or restrictions on movement have been imposed, save a few scattered
curfews. Legislation enacted gave the government authority to collect mobile phone, credit card, and other
data from those who test positive to reconstruct their recent whereabouts. That information, stripped of
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personal identifiers, is shared on social media apps that allow others to determine whether they may have
crossed paths with an infected person.
South Korea learned the importance of preparedness the hard way. In 2015, a South Korean businessman
came down with Middle East respiratory syndrome (MERS) after returning from a visit to three Middle
Eastern countries. He was treated at three South Korean health facilities before he was diagnosed with
MERS and isolated. By then, he had set off a chain of transmission that infected 186 and killed 36,
including many patients hospitalized for other ailments, visitors, and hospital staff. Tracing, testing, and
quarantining nearly 17,000 people quashed the outbreak after 2 months. The specter of a runaway
epidemic alarmed the nation and dented the economy. That experience showed that laboratory testing is
essential to control an emerging infectious disease. The MERS experience certainly helped them to
improve hospital infection prevention and control.
After the novel coronavirus emerged in China, Korea Centers for Disease Control and Prevention (KCDC)
raced to develop its tests and cooperated with diagnostic manufacturers to develop commercial test kits.
The first test was approved on 7 February, when the country had just a few cases, and distributed to
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regional health centers. Just 11 days later, a 61-year-old woman, known as “Case 31,” tested positive. She
had attended 9 and 16 February services at the Shincheonji megachurch in Daegu, about 240 kilometers
southeast of Seoul, already feeling slightly ill. Upward of 500 attendees sit shoulder to shoulder on the
floor of the church during 2-hour services, according to local news reports.
The country identified more than 2900 new cases just in the next 12 days, the vast majority Shincheonji
members. On 29 February alone, KCDC reported more than 900 new cases, bringing the cumulative total
to 3150 and making the outbreak the largest by far outside mainland China. The surge initially
overwhelmed testing capabilities and KCDC’s 130 disease detectives couldn’t keep up, Kim says. Contact
tracing efforts were concentrated on the Shincheonji cluster, in which 80% of those reporting respiratory
symptoms proved positive, compared with only 10% in other clusters.
High-risk patients with underlying illnesses get priority for hospitalization. Those with moderate
symptoms are sent to repurposed corporate training facilities and spaces provided by public institutions,
where they get basic medical support and observation. Those who recover and test negative twice are
released. Close contacts and those with minimal symptoms whose family members are free of chronic
diseases and who can measure their own temperatures are ordered to self-quarantine for 2 weeks. A local
monitoring team calls twice daily to make sure the quarantined stay put and to ask about symptoms.
Quarantine violators face up to 3 million won ($2500) fines. If a recent bill becomes law, the fine will go
up to 10 million won and as much as a year in jail.
Major Takeaway:
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Utilizing lessons from previous similar incidents: MERS experience certainly helped them to
face this condition
Taking right decision at right time: If they had delayed developing test kits by a month, without
prior and proactive consultation and cooperation with the private sector, our current system based
around quick, mass testing couldn’t have been established.
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Utilizing technology effectively: Tracing patients through credit card usage, CCTV, mobile
phone location tracing, and so on helps them to learn about a patient’s travel time, route and
location quickly, and can also help to identify close contacts of the patient.
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Considering potential risk and take action accordingly: Risk of cross infection between the
medical professionals and visitors needs to be given importance. So they prefer Drive-thru
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screening to ordinary screening clinics. Drive-thru screening clinics are much faster and safer than
ordinary screening clinics. Examination, temperature check, and specimen collection are done
while the driver is still sitting in the car. Conventional specimen collection may take half an hour
compared with only ten minutes in total for drive-thru.
2.2 From A 'Cultural Meme' to A Comeback Kid: How Samsung Overcame Its
Galaxy Note 7 Fiasco
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In 2017, Samsung pulled a successful comeback from its exploding phones fiasco previous year,
with its brand value up 9%, according to Interbrand.
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The company managed to pull the feat by holding itself accountable, getting to the root of the
cause and then communicating that effectively to its employees and consumers.
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It also used the opportunity to find a bigger brand purpose for itself and creating an internal culture
of change that encourages and prides itself on taking risks.
In 2016, Samsung was blowing up — quite literally. The phone maker was battling its biggest ever brand
crisis, after defective Galaxy Note 7 smartphones began exploding around the world. A battery
malfunction was threatening to permanently damage both its business and its reputation: its mobile sales
were down 15% by October 2016.
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“We became a cultural meme, a daily announcement on every flight,” said Pio Schunker, SVP of
integrated marketing communications at Samsung Mobile Communication, speaking at the Association
of National Advertisers’ Masters of Marketing Conference on Thursday. “There was wave after wave of
negative commentary — not just from the press, but from consumers as well.”
But a year later, the South Korean company seemed to be on the path to a full recovery. In 2017, it went
up from the seventh to the sixth position in the marketing consulting group Interbrand’s 2017 Best Global
Brands list, and saw a 9% increase in brand valuation despite the crisis. Samsungs’s profits were up in
2017 and its new Galaxy 8 sold well according to Marketwatch.
Here’s how Samsung managed to pull its comeback:
By embracing accountability: When disaster struck, Samsung knew that it had to be proactive and take
responsibility, according to Schunker.
“We knew we couldn’t afford the luxury of a fetal position and just lie there, so the first thing that we did
to make things right was to take accountability,” he said. “For Samsung, it wasn’t just the right thing to
do, it was the only thing to do.”
The company promptly held a press conference, in which it took full responsibility for the crisis. It was
also forthcoming in its admission that while it didn’t know what was causing the battery malfunction, it
would not rest until the actual cause was discovered.
The company then moved into decisive and meaningful action, getting 700 researchers and engineers,
200,000 phones and over 30,000 batteries tested in every extreme condition possible. In a company first,
Samsung also opened up to third party auditors.
When Samsung eventually figured out what exactly had gone wrong, it communicated that out to the
public. In January, it announced a quality assurance program and other safety features, including an 8point battery safety check, rolling them out the very next day.
By building ‘brand love’: Once the issue at hand was addressed, Samsung turned its attention towards
recovering people’s love and trust. It focused on finding a bigger purpose that both its employees and
consumers could rally around, made its brand more inclusive globally and tried to create an internal culture
of change.
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“This time the stakes were much higher, because we not only had to recover from all the damage that had
been done, but do it during one of the most competitive smartphone launch seasons we’d ever seen in
advance of the S8 launch,” he said. “We needed to reclaim our leadership.”
The brand sought to break away from its “immensely fragmented brand identity which lacked warmth and
humanity,” and instead inspire purpose beyond just its bottomline. It tapped into its inherent DNA of
relentless innovation, crystallizing that into a bigger brand purpose encapsulated in the tagline “Do What
You Can’t.”
Bringing all its regions and markets together around a common vision ended up propelling the brand even
further. “The brand focus was incredibly empowering, helping in creating great work and scaling up the
brand faster than HQ initiative could have done,” he said.
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By relying on its partners: Social media ‘war rooms’ — where brand and agency teams coalesced to
take on tentpole events on social media in real time — may be a thing of the past. But desperate times
call for desperate measures, as was Samsung’s case when its phone scandal broke out last year.
According to Schunker, Samsung and its agencies set up a war room in the immediate aftermath of the
crisis, monitoring media reports and consumer sentiment online day in and day out to make sure everyone
was on the same page and up to speed on the latest.
“They were instrumental, we could not have done this without our agency partners,” he said.
Major Takeaway:
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Brand reputation is hard won but easily lost: Samsung was a no-name brand twenty years ago
and has worked hard to build its brand. The company doesn’t just produce smartphones nor was
the Note 7 its only phone. Yet in a connected, social media-driven world that thrives on bad news,
its poor handling of the Note 7 saga has become a black mark against the Samsung name. The risk
is that this undermines key intangibles like customer loyalty, prestige, desirability and positive
brand recognition.
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Being accountable: When disaster strikes, one has to be proactive and take responsibility. When
one eventually figures out what exactly have gone wrong, it should be communicated to concerned
people.
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Ready to adapt to complexity: In a fast changing environment, one needs to be creative,
innovative and nimble to adapt to complexity.
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Ability to move forward: Every company in their journey has to go through a fair share of ups
and downs. It all seems hunky dory when things are looking up. It’s only when things are down
that the competency of the company are tested. Samsung can’t erase the Note 7 recall. But it has
move forward and regained its market position.
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Empowering humanity: We live in a highly visual world. If you want to attract the consumer’s
attention, you have to create a compelling visual, which Samsung is adept at. The company knows
that creating ads that merely portray the benefits of its products won’t do. The audience needs a
lot more to be convinced and that’s where Samsung’s marketing genius comes into the fray.
Consequently, the ads that come from Samsung show everyday people carrying out everyday tasks
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that are made easier with the help of the brand’s products. This helps in striking an emotional
chord with the audience, which in turn, influences their purchase decision to a large extent.
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