Companies Unprepared To Manage Recalls

Erik Bernstein Articles Crisis Prevention Leave a Comment

Companies Unprepared To Manage Recalls

Though this article was originally written in 2005, the lessons hold true. In the past 15+ product recalls have only grown in terms of scope and the attention they receive from both mainstream media and internet users.

There will be more than 1,000 recalls of health- or safety-threatening products by the end of the year, extrapolating from CPSC, FDA and USDA figures through the end of April 2005, and a leading crisis management consultant says that many companies are unprepared to conduct rapid and appropriate communications when recalls are needed.

“Too many CEO’s play ostrich about the possibility of a recall,” said Jonathan Bernstein, founder and chairman of national consultancy Bernstein Crisis Management and editor of “Crisis Manager,” an international email newsletter. “They wait until the recall is required and then try to figure out what to do, resulting in additional risk for consumers and the company’s reputation.”

Bernstein Crisis Management has been involved in crisis communications for multiple recalls and offers companies these tips:

  1. Remember that rapid response to a known product problem minimizes damage. The time to examine the systems you have in place for recall is now, not when you already have a product needing recall.
  2. Have a product recall plan ready to use anytime, one that covers the operational, legal and public relations (internal and external) components of making a recall. Hint: “We’ll wing it” is not a product recall plan.
  3. Have the core members of a product recall team identified and trained in advance. It may be necessary to have one team at a corporate level to direct recall activities overall, and individual teams more focused on the operational aspects of product recall at the sales/marketing and/or manufacturing levels. And you’d be amazed at how some people you think will be cool in a crisis actually aren’t, and vice versa – behavior that often is identified through training that includes simulating a recall.
  4. Have back-ups for critical people and recall systems. Assume that some recall-related lead personnel will not be available when you need them. Assume that the computer system where you maintain your stakeholder contact lists has crashed. Assume other similar worst-case scenarios and make your back-up plans accordingly.
  5. Have contact lists for all stakeholders set up on automated notification systems. This is particularly important for end-users and distributors of your products. You can’t rely on the media alone to reach them.
  6. Consider the use of virtual incident management. There are a number of Internet-centered systems that allow recall team members to exchange real-time information, access current communications documents, and keep team leaders updated even if the team is geographically scattered.
  7. Make recall-related decisions that are based on protecting your brand/reputation and not just on your legal risks. The infamous Bridgestone-Firestone recall started far too late because the company’s leadership was considering risks other than the most important one — the risk of aggravating the court of public opinion.
  8. Communicate internally and externally. Remember that every employee and, often, dedicated contractors are public relations representatives and crisis managers for your organization, whether you want them to be or not. You must empower them with reassuring messages about the recall suitable for use at their respective levels of the company, and you don’t want them to learn of the recall from external sources before they hear about it from you.
  9. Don’t wait for the CPSC, FDA, USDA or other regulatory agencies to protect your reputation. While each regulatory agency that can get involved in product recalls has its own process to follow, that process can often delay how much time passes before product consumers and distributors are notified — a delay which, in worst-case scenarios, can cause injuries or deaths. In that event, the court of public opinion may react very negatively to both your organization and the regulator — but you’re the one whose revenue and reputation will be most impacted.
  10. Focus special communications on highly disgruntled customers and distributors. In this Age of the Internet, and in a litigious society, a few angry people can make waves completely disproportionate to their numbers or even to the injury suffered (if any). The recall process should include an “Escalated Cases” team to focus on such complaints when they’re received.

“CEOs need to remember that the public expects them to do what’s right, not just what’s required,” said Bernstein. “Companies like Bridgestone/Firestone, and Merck, learned that lesson the painful way.”

Jonathan Bernstein
Founder & Chairman


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