Crisis management at Carrefour: too little, too late

Sam Flemming of the IWOM

Where would we be without the internet? Carrefour would not have had its national boycott and we would not have known how incompetent its management reacted on the fast emerging crisis. ESWN translates a piece at Sina, depicting the (lack of) crisis management. We follow (anonymized) PR-person Li Kuan of Carrefour in Shanghai, who smells after a few days that something is rotten:

After quickly looking up the earliest Internet posts, Li Kuan got worried. "Although Carrefour was not the initial target, this affair occurred under very special circumstances ..." But Carrefour headquarters did not give a clear explanation of the situation and its potential actions. This point was confirmed from another public relations worker at a Carrefour branch office. The branch office found out about this affair only on April 13, and they thought that April 13 was the first day when the Internet posts and mobile phone SMS went out for the Carrefour boycott. Thus, they were two days behind the headquarters in terms of awareness about the situation. It is not known what emergency meetings were held at Carrefour headquarters over those two days. But the slowness of communication was surprising. From April 14 on, the media began to descend on Carrefour. According to inside information, Carrefour did not have a consistent message when the media showed up. "The headquarters did not tell the various local public relations people what to say or respond. Everything was based upon their own careful handling by virtue of professional experience and guesswork!"

The power of the consumer emerged and has hit Carrefour by surprise. Only after a while counteraction started to emerge. One of the sound explanations is that Carrefour has been focusing on government relations since its start in 1995, when it faced major regulatory problems. It failed to understand fully the voice of the consumers, especially the internet word of mouth, as our speaker Sam Flemming of CIC would put it. Sam Flemming has been repeating his warnings as enterprise after enterprise found itself at the mercy of the emerging vocal consumers.
If you are interested in retaining Sam Flemming for a lecture, key note or otherwise, do get in touch with Chinabiz Speakers or drop me a line.

Update: Got a twitter from somebody who is more familiar with the Carrefour organization. He suggest that Carrefour is so decentralized, there is nobody who would make such a crisis plan. The only plan that they have is a plan to repatriate their foreign expats in case a new SARS crisis emerges.
Some more details from the same source. Carrefour in China now has an annual turnover of three billion Euros (which does not say much about its profitability). It has 49,000 employees, 500 of whom are expats. Only three percent of the company's worldwide sales come from China. Of its 112 China-stores 15 have been disrupted by the recent upheaval. It puts all a bit more in perspective and might explain why Carrefour has not really been very upset by the scale of actions up to now.