Embed Size (px)
Citation preview
7/27/2019 Managing Recalls.pdf
http://slidepdf.com/reader/full/managing-recallspdf 1/2
in my opinion by tim luckett
Managing recalls and the threat to reputation
Consider the "three Rs" of readiness, response and reb uildinga best-practice approach to com mu nicat ion dur ing a recall
ave you been tempted to order that
sleek new Toyota this year? Even it
you've never driven one, the sheer
., . n u m b e r ofvehicles recalled in 2010
and the vt-ay the Japanese auto giant has handled
the crisis can't have escaped your attention. In
todays 24-hour world of fervent consumerism
and social networking, product recalls are bigger
news than ever before. Toyota's response has
been well documented—a slow drip of bad
news, one of the key things to avoid.
Of course, the most effective crisis manage-
ment takes place well before the problem esca-
lates out of control .
T h e key to resolving negative
publicity quickly and effectively is
to be prepared by deve lop ing ,
implementing and mainta ining a
plan for managing a product recall.
Companies that respond quickly
and openly in these scenarios recover
more quickly, and subsequent ly
outperform those that fail to
respond effectively. As Rory R
Knigh t and Deborah J. Pretty
s howed in the ir 1997 Oxford
Executive Research Briefing The
Impact of Catastrophes on Shareholder Value., a
company's ability to recover trom a public catas-
t rophe is a key de te rminan t of future share-
holder value. In a report studying the impact of
15 major corporate catastrophes, incltiding six
highly public product recalls, the researchers
determined that in all cases the event had a sig-
nificant negative impact on shareholder value.
In my extensive experience working withcompan ie s to manage product recalls . Id high-
light the "three Rs' ot readiness, response and
rebuilding as a best-practice approach to ensur-
ing proper communicat ion. Readiness is abou t
the basics ot good business and supply chain
monitoring-—for example , havuig a s imple
process for people to follow and a regular train-
ing program for any staff involved in a recall.
T h i s mus t cove r communica t ion wi th all
potential stakeholders, because early dialogue
From the minute
a produc t fault is
identified, the
company is on a
journey to rebuild
customers' trust.
with suppliers may avert the crisis.
Response is the part most often associated
with recalls because it's the part that 's immedi-
ately visible to thepublic . Aconsumer learning
of a product recall has three questions: Have
you sold me a produc t of inferior quality, have
you sold me a product tha t puts me or my fam-
ily at risk, and howpainless are you going to
make this whole process for me? Manag ing
recalls effectively has to be about address ing
these concerns clearly, quickly and honestly.
Customers need reassurance—mixed messages
invariably lead to anxiety.
The rebuilding phase becomes crucial to man-
aging a product recall because its
success should be evaluated in
terms of the company's ability to
recover from the incident quickly.
This means making a concerted
effort to mitigate the lasting effects
a recall mayhave on a company's
or product's reputation. From the
minu te a product fault is identi-
fied, the company is on a journeyto rebuild customers ' trust.
Research from rhe U.K. th ink
tank Oxford Metrica shows that a
crisis that strikes at the heart of brand values has
the ability to do the most damage. For years,
Toyota had built its reputation on qtiality and
reliability, and anything that questions this is
particularly threatening. Therefore, consider this
advice: Undertake a product recall audit and put
a conting ency plan in place well before there is an
actual or perceived problem. Identify and train a
designated team to handle product safety issues.Always act honestly and transparently, and never
a t t empt todownplay the seriotisness of the situa-
t ion. Be quick to spread the word about the
recall, using whatever m ethods are approp riate—
for example, point-ot-sale intormation or tradi-
tional and social media advertisements.
Most important, rehearse and rehearse again.
A recall is easy to simulate, whether through a
desktop oroperational exercise, but very hard to
get right in practice. •
about the authorTim Luckett is managing director
of issues and crisis managem ent
for Hill Si Know lton in Europe,
Middle East and Africa, and is
based inLondon. A former tabloid
journ alist, he is a regular speaker
and writer on crisis management
and reputa tional issues.
what's you r op inion?
I f you feel s trongly about acomm unication issue, tel l us.
Send articles for consideration
to [email protected]. Please
include your name, orga nization
and contact information. Art icle
may be edited for length and
clarity.
4 8 Communication World* July-AugJit 2010 www.iabc.com/cw
7/27/2019 Managing Recalls.pdf
http://slidepdf.com/reader/full/managing-recallspdf 2/2
Copyright of Communication World is the property of International Association of Business Communicator and
its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's
express written permission. However, users may print, download, or email articles for individual use.
