Over the last few months, Brand China has suffered a slew of hard hits, and with the holiday season fast approaching it looks like Santa might not be flying East to fill his sack this year. So what has the country done? It’s taken a decidedly American approach and consulted with a good PR firm. To find out what can be done to save China’s reputation, FastCompany.com talked with Scott Kronick, President of Ogilvy PR in China.
How did you first get involved with the recall issue in China?
Since the middle of this year, Ogilvy PR has provided advice and training to the State Food and Drug Administration in responding to international media requests regarding issues related to the export of illegal or sub-quality products from China: toxic pet food early in the summer, followed by poor quality seafood being exported in late June, and then of course lead in toys, among others. We provide this advice and these training programs through a partnership we have with Tsinghua University, which is a joint venture think tank that provides information and education to public officials with regard to location branding.
What’s your own background? How did you make it to China from the United States?
I’m from Michigan. I went to school at Syracuse in upstate New York and then worked in PR in the city for a while. I’ve been with Ogilvy for 21 years. I moved to Taiwan in 1991 and then to China in 1995 to set up our offices here; I’ve been here ever since.
Every business school was talking about the rise of Asia. There were some people at Ogilvy who were doing very well out there. And I wasn’t married to New York.
How do you handle the language issues?
When I first moved to Asia, I knew no Chinese. People would argue I still don’t. I’m tone deaf and Chinese is a language that’s based on tones! No I’m kidding — we speak Chinese at home and my kids’ first language is Chinese.
Who specifically in the Chinese government do you deal with?
I’ve dealt with both AQSIQ (the Administration of Quality Supervision, Inspection and Quarantine) and the state’s FDA. I also deal with lots of the state council information offices — these are essentially spokespeople for the government.
Have you ever handled a crisis like this before?
During the SARS period in China, we were brought in by the Ministry of Health to do a training session about what is expected in recovery communications. I was part of that process, and then I was brought into some interesting conversations later on when the export issues started festering. We haven’t done a lot of crisis work around countries in the past; we’ve been more involved in location branding: promoting investment and tourism.
What work is Ogilvy PR doing for the Chinese government?
We have tried to encourage them to talk more. Our major role has been in providing a view of what the world expects from China and how it should respond. Coverage of China is often quite negative and this results sometimes more from lack of understanding and communication than anything else.
Are you saying that the food and toy scandals were over blown?
I think there is a tendency to demonize China in the global press, and this comes more from a lack of communication and transparency than anything else. There is cause for reporting and informing the public but sometimes it can be unbalanced, largely because the press have to report in a vacuum since they don’t have anybody from the government explaining what they’re doing. There are reporters who say the whole export system is awry, that China has no export systems in place. If the government doesn’t admit that they know there is a problem and that they have experts out there who are creating stringent controls to address this, these views will continue.
What should the Chinese government be doing?
The government needs to be accessible and address things openly and honestly. They should not blame the foreign media, but focus more on what they are doing to reassure people that they are taking measures to control the situation. The government is taking action and they need to communicate this. They have put in charge Vice Premier Madam Wu Yi, who is considered to be one of the most effective politicians in handling China issues and crises. They have also assigned a working group to look into the issues and are working to ensure the Ministries involved work together to solve the problems, as now one of the chief problems is a lack of coordination.
There is a need for some kind of third party certification so that people believe exports have gone through some a certified process. They are looking into setting up bodies to do this.
Given the nature of the problem, setting up a working group and appointing someone new doesn’t seem all that impressive. Shouldn’t there be something more?
You need to understand that when China sets up a working group it’s not a watered down version of “well, we’ll look into this.” They really look at how to address the most fundamental issues. I wouldn’t read a working group as some impotent organization that won’t do much. I have confidence that there will be some key outcomes from this. They have developed a five-year plan, but have also made short-term moves related to areas like inspection, enforcement, and the punishment of violators. Madam Wu Yi was the same person assigned to the SARS incident years ago and she is known as being the official that can get things done here.
Did these controls and inspection procedures really not exist before the crisis? Or was there a problem with implementation due to factors like corruption and apathy?
They certainly had laws beforehand, but there wasn’t a high degree of attention to this issue before. Manufacturers were cutting corners to save cost and that isn’t acceptable. With China’s exponential growth in exports, there are bound to be problems. The issue is to make sure controls are in place before products leave China. If there is a silver lining out of this, it is that the situation has forced everyone to look at the systems and processes that exist.
Could China be facing less of an image crisis now if it had handled things differently when the first few product recalls were issued?
This is largely an organizational issue: five different ministries are responsible for China’s exports and they are poorly coordinated. The whole export crisis has created a focus on how to provide an umbrella organization to help coordination between these. This situation has arisen because of the coming together of many issues at one time: the problems with seafood, pet food ,and lead paint in toys all came to light at about the same time. This has focused people’s attention on the weaknesses in the system and the overdependence of the world on China. The crisis at hand is ultimately a result of the Chinese economy’s breakneck pace of growth and the flaws in the system are now coming through.
It sounds like something has to change in the way goods are produced and not just in quality inspection at the border. Do you see that happening?
To be honest I don’t know a whole lot about the production process. One thing I can tell you though is that things are changing and this is a different China from what it was 13 years ago. It is much more open; there are much greater flows of global business coming in and out. It is an international business center — one of the most vibrant in the world today. With that vibrancy I’ve watched officials react differently. They are quite open and collaborative.
Do you think it’s reached the point where parents are looking to see where the toys they buy were made?
I’ve been in conversations with parents who say they certainly do that now. And that’s the challenge that brand China has: the recalls have had an emotional impact on people that it now needs to recover from. Personally, I’m a parent and I don’t look at the labels. But I know there are people who do so maybe I’m not really representative.
What kind of message did China’s July execution of Zheng Xiaoyu, the former head of the State Food and Drug Administration, send to the world about China’s commitment to product safety?
China certainly imposes harsh penalties on those who violate the law, but Zheng’s execution was punishment for corruption and is largely unrelated to the present issues. Many speculate, though, that the government chose to execute him at this time to somehow show the world they were serious about the present crisis, but that is just speculation.