Crisis Management: Reducing Severity and Impact of Recalls

Catching product issues before they create big problems is key to reducing the reputation impact of recalls

There has been a serious increase in recalls over the past several years. In large part this is due to greater awareness – consumers are VERY aware of how to let companies and their peers know when there’s a product issue. Another major factor is that smart companies have seen hard evidence of the costs that accompany a failure to identify issues, and made it a priority to be the ones to catch their own problems before they unfold into disaster.

Interviewed by the London School of Economics and Political Science Business Review, BCM president Jonathan Bernstein shared his thoughts on the issue:

One of the things driving the rise in recalls is the fact that manufacturers have increased their in-house testing of products and are being more diligent about complying with government rules for self-disclosure of health and safety threats, says Jonathan Bernstein, president of Bernstein Crisis Management.

“Companies are more aware that if they get caught, their legal and reputational risk is much higher than it might have been in the past,” says Bernstein.

In other words, if consumers or regulators discover an issue they’re going to want to know why YOU didn’t catch it already, and how exactly your product got to market with a dangerous flaw.

Pre-internet, the only people who knew about most recalls were the ones who got a letter in the mail. Now, within minutes of an announcement, searches for your company’s name can and will bring up coverage, social media pundits will be commenting, and you’ll face all of the reputation threats that accompany those items.

While stakeholders can be accepting of an occasional problem, demonstrating repeatedly that your product has a potential for danger (and that you’re inept when it comes to spotting said problems early on) can quickly crush a reputation.

The BCM Blogging Team
www.bernsteincrisismanagement.com

Comments 2

  1. Leslie J. Kelsay

    Reading consumer comments associated with coverage of product recalls, I see two trends:

    –More consumers are asking “Why did this product even leave the plant?”

    –There is additional skepticism about recalls issued under conglomerate owner names rather than the brand name. The current recall of P. F. Chang’s frozen entrees and appetizers is a good illustration. Consumers can’t open their freezer door and easily spot ConAgra food, but they sure know if they bought P. F. Chang’s Mongolian Beef.

    1. Post
      Author
      Erik Bernstein

      Good points Leslie. The questions about quality control are often damaging to trust. The practice of burying brand names is a bad one for a couple of reasons. Not only does it directly tell the public you’re trying to be sneaky, but it also creates more danger of someone actually consuming tainted food and falling ill.

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