Monthly Archives: August 2010

Surviving a Recall

Published on 31st August 2010 by . 1 Comment. Click to add yours.

“Recalls undermine trust in a specific brand and it can take the company a long time to recover from the damage to its reputation, but it doesn’t have to take a long time if the company uses good crisis management tactics,” Manpreet Hora, an assistant professor in Georgia Tech’s College of Management, said in a study analyzing 500 recalls. “Consumers are forgiving, so if a firm apologizes, acknowledges the problem, and doesn’t make the mistake again and again, consumers will continue to be loyal to that brand.”

This quote, from a post by Ilya Leybovich on the Industry Market Trends blog, is right on the money in terms of the role crisis management and people skills play in protecting and rehabilitating brands which have been faced with product recalls. While the initial damage will obviously vary from one situation to another, with careful handling and honest business practices even seemingly dire situations like Toyota’s recent massive recall can become “history” and not an ongoing issue.

The BCM Blogging Team
http://www.bernsteincrisismanagement.com/

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Insurance for Eggs

Published on 29th August 2010 by . 1 Comment. Click to add yours.

Egg producers are no strangers to recalls, but following the most recent salmonella outbreak, one of the largest in U.S. history, some are looking towards an emerging service that could lend a hand in recall crisis management. BusinessInsurance.com explains:

The recall of half a billion eggs tainted by salmonella linked to chicken feed likely will cost hundreds of millions of dollars and ignite further debate over whether food producers should buy product recall insurance, experts say.
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While interest in the coverage has increased as a result of several recent high-profile recalls, the market for product recall coverage is still developing, they say.

Some recall insurance extends so far as to cover not only losses from business interruptions, bodily injury and product loss but also the critical phase of reputation rehab, including advertising and consumer education, without which it becomes difficult to move past the incident and return to normal operation.

The BCM Blogging Team
http://www.bernsteincrisismanagement.com/

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Philippine Police Problems

Published on 27th August 2010 by . Leave a Comment

The Philippine police force is facing international criticism after their bungling of the recent hostage situation in Manila cost eight Hong Kong tourists their lives. Broadcast on nearly every major television network, the incident has destroyed any last remaining shreds of good reputation the force held on to and exposed its lackadaisical crisis management methods. This quote from an article on TheStar.com explains:

Even when the situation looked dangerous, they appeared to be nonchalant and seemingly unconcerned about how the deadly kidnapping could end.

The police negotiators were seen joking and laughing with the disgruntled former cop who demanded to be reinstated in his job in return for releasing the hostages.

In fact, it even had the CNN newscaster asking at some point why the authorities were taking the whole situation so lightly.

This is not the only hostage incident to have taken place in the Philippines recently, and now national attention is being brought to the rising trend. If the issue is not corrected and the country’s image rehabilitated, the negative effects will trickle down to the region’s tourism and hospitality industries, costing both lives and money.

The BCM Blogging Team
http://www.bernsteincrisismanagement.com/

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Pirates Sink Their Own Ship

Published on 23rd August 2010 by . 1 Comment. Click to add yours.

Sports teams are vulnerable to crises just like any other business, sometimes even more so because of the large sums of money and public interest involved. Fans of Major League Baseball’s Pittsburgh Pirates have become accustomed to their team bringing up the rear, but careless handling of questions regarding team finances have landed the organization in hot water. The Meadville Tribune reports:

So how do the crisis management experts at the Pirates handle the news the Associated Press had gotten its hands on and was working on a story that showed the team had made nearly $30 million in 2007 and 2008 (they won 135 of 324 games during that time).

They invited four local media outlets to a press conference to address what they felt was going to be a story that misrepresented the Pirates financial situation.

“The presumed implication that anyone in the ownership group is lining their pockets is inappropriate,” Nutting told the four media outlets.

Hard to figure how anyone would come to that conclusion about a team that had $30 million in profits and consistently had one of the lowest payrolls in baseball.

The Associated Press, the one agency with a national reach and the one working the story was not invited to the press conference. The AP story was picked up by newspapers and every national sports outlet and website all over the country with no Pirate response, further making the Pirates look ridiculous.

Crisis management experts will tell you, “no response” is the same as an outright admission of guilt in the minds of the public. By neglecting to involve the national media or respond to the AP’s questioning, the Pirates have not only alienated and upset their fans, but attracted negative attention across the country.

The BCM Blogging Team
http://www.bernsteincrisismanagement.com/

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The Ostrich Syndrome

Published on 21st August 2010 by . Leave a Comment

There are many steps to be taken in a crisis, and while there are differing opinions as to which is most important, Davia Temin made a convincing case for one in a recent Forbes.com article. A quote:

Most important of all–in any crisis–is to short-circuit denial! It’s a human trait when disaster strikes to go straight into “this can not possibly be happening to me.” Or “if it is happening, it can not be that bad.” Or, “even if it IS that bad, no one will ever notice…” The more quickly you move beyond this denial, the more quickly you can put in the right fixes … and that makes all the difference to how the crisis will unfold, and how you will be remembered.

This “head in the sand” phenomena is encountered so frequently when assisting organizations with crisis management that the BCM mascot is lovingly known as “OhNo the Ostrich,” a humorous homage to a dangerous problem. As the quote states, moving quickly past this denial frees up the ability to control and direct the crisis and the opportunity to bolster your reputation in the process, while choosing not to is only delaying the inevitable.

The BCM Blogging Team
http://www.bernsteincrisismanagement.com/

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