When I speak on the topic of social media’s impact on supply chain management, there is sometimes a rather skeptical response on the part of senior managers.  That’s understandable. Initial perceptions on the overall value of either blogs, Twitter, YouTube or Facebook can be rather varied, and many firms frown or discourage use of these mediums on corporate systems.  However, I can quickly cite many recent situations where a failure to establish some immediate presence, acknowledgement or control to a particular or perceived risk incident caused social media to viral with inaccurate or damaging information.    Like it or not, this accelerating new era of Internet social media and mobile devices is dramatically changing the way people get their news and make their judgments about products and businesses.

The latest example has been the increased global media and online attention surrounding Rolls-Royce PLC, specifically its Trent 900 series aircraft engine that was involved in the recent in-air and fiery uncontrolled blowout failure of a Qantas Airways A380 aircraft, which resulted in an emergency landing in Singapore.  The implications of that incident resulted in the initial immediate grounding of all A380 aircraft which impacted multiple air carriers all Rolls customers. Another immediate impact was the YouTube videos taken by actual passengers, which global media outlets attached to their various reports and web postings. In this particular video, my perception was that the Qantas pilot and crew exhibited a calm confidence as well as being ‘in-control’ of the emergency. My other reaction: What the heck happened to that engine?  Thank goodness that airplane had back-up systems.

Shortly after the incident, rather than a designated spokesperson, The CEO of Qantas, Alan Joyce, chose to become a visible spokesperson for the airline, expressing regret, his airline’s sensitivity to the fact that there were no serious injuries among passengers, and the actions that the airline had undertaken to insure passengers would reach their destinations along with assuring steps regarding ongoing safety of the existing Qantas A380 fleet.   Media and blogs were quick to run with Mr. Joyce’s comments and presence as executive in control. Government regulators also took an external presence in outlining immediate measures to assure safety of A380’s equipped with these Rolls engines, and to assure airline travelers that safety was not going to be compromised.

Rolls senior management on the other hand, has chosen a path, up to now, of restrained public response, limiting incident comment to just two short public statements, while airline customers deal with the aftermath of concern. A recent Wall Street Journal article (paid subscription may be required) notes that this tight-lipped approach is frustrating Airbus, Qantas, and even some internal Rolls employees.  The Financial Times has a separate article directly quoting the President of Dubai based Emirates , the airline with the largest existing fleet of A380’s, who has also called on Rolls management to be more forthcoming about what’s actually going on concerning these engines, and what steps Rolls is taking to address concerns.

It is not just this particular incident.  In August, a Trent 1000 engine being ground tested for eventual use on Boeing’s new 787 Dreamliner program experienced an uncharacteristic blowout failure which was cited as one of the causes to again postpone first customer ship of the Dreamliner to 2011. Rolls has been similarly silent about that incident, which has caused some in the media and blogosphere to want to interrelate both incidents, even though the engines are different. Without any counter information, we and others can speculate why did this problem showed-up so late in the overall Dreamliner certification program.

Industry observers note that the Rolls corporate culture is highly engineering-oriented, with a tendency to let product and engineering performance be the public persona of the company. Others note that since Rolls’ customers are the airlines and other carriers, it need not be concerned with the impressions of the air traveler.   Legal and financial liability implications are of course, also at play.

The fact is, that like or not, the new normal is a business world where the Internet and social media can run with a story much quicker than any media outlet.  Stories and accounts of incidents can ‘go-viral’ in a matter of hours, relying on various known voices to steer commentary. In some cases, traditional media itself now features social media entities such as blogs to distribute a more personal voice.

That specifically is why this ongoing incident involving Rolls and its aircraft engines is important to observe.  Rolls senior management may well have definitive answers, or a plan to determine what exactly caused the Trent engine to have oil leakage and to fail.  Rolls management may also believe that its reputation to solve this problem should not be questioned.

The world of business, like it or not, has been impacted by a different and far more viral social media. What management may assume is obvious, either through history or reputation, may not be the conversational stream.  People fly on airplanes and demand assurances that airplanes they fly are safe.  Airlines operate networks that depend on consistent reliability and performance of aircraft.  Aerospace suppliers exist in this broad ecosystem, and if you needed any reminder, listen to any current Boeing TV ad, which communicates one consistent theme: “We know why we’re here, this is why we are here, we are Boeing.” There is no mention of snafus or recent incidents.

Business and supply chains exist in a new and highly viral medium of communication fueled by social media and mobility.  Executives need to understand this reality and leverage it to business needs.  Manufacturers may have the best, most highly engineered product, but when some unforeseen incident occurs, they cannot leave the narrative to others. Executives need to visible, with a presence of taking control, a determination to respond to all questions and needs.  That is the new normal of risk mitigation and in requires a visible presence.

Bob Ferrari