Product recall crisis fatalities

Not planning for a product recall escalating to crisis leaves a corporation, its brand and reputation extremely vulnerable. We have seen this in massive pharmaceutical, automotive, food, children’s toys and even pet food recalls.

No-one can forget the shockwaves that came out of the Tylenol Paracetamol cyanide poisoning in Chicago back in the 1980s when two mothers, two sisters, a bride, a 12 year-old girl and a stewardess all died from deliberate poisoning. The product crisis was immediate and tragic. Johnson & Johnson recalled Tylenol and, working with the Federal Drug Administration, developed a tamper-proof package for redistribution at a cost of $150 million.

Globally, there is a tightening of product safety controls. Regulators are looking for thorough, fast response to recalling a faulty or contaminated product in terms of consumer contact and recovery of products. The fact is, incidents of product recalls escalating to crisis are occurring with greater frequency than ever before.

Corporations need to establish crisis teams that can respond fast to a critical product recall. Threats need to be identified in advance. Product recall processes need to include a crisis trigger.

Deliberate contamination or threats to a product that might kill or injure are crises that require the immediate involvement of law enforcement agencies.

Running regular product recall and integrated crisis exercises will anticipate and deflect or reduce the impact of the worst case scenario.

CEO crisis manager

Good to see Qantas Chief Executive, Alan Joyce, extolling the virtues of crisis management in Business Review Weekly magazine. "Flexibility and adaptability is really key," says Alan Joyce, the diminutive, Irish-born Chief Executive of Qantas, without any hint of irony. "We have a fairly refined crisis management team and crisis management process, probably more so than many other companies." Joyce was talking about a broad range of threats including the volcano turmoil where Qantas lost $10 million during the threat to air travel. "It's what (my predecessor) Geoff Dixon calls the constant shock syndrome...we plan on a steady state and then we plan scenarios and risks around that. But the volcano would not have been on the risk register." (BRW May 6-12,2010 - Managing the Unmanageable)


There is determined growing recognition among CEOs that crisis management is part of day-to-day planning. The process, its respondents and its leaders need to have matured either in an arena of real crises or with the experience of test runs. Best practice is practice. CEOs and crisis teams need to practise together. Organisations never know when the worst case scenario can happen but they can be prepared to handle adversity and minimise the impact when it does.

Mining crisis next-of-kin

It's rare for a US President to directly blame a company and government for a major crisis. President Obama has blamed the country's worst coal mining disaster in 40 years on the Massey Energy Company and government mismanagement. The explosion in West Virginia on 5 April killed 29 men and injured two. The President said: "Owners responsible for conditions in the Upper Big Branch mine should be held accountable for decisions they made and preventative measures they failed to take."

Only four years ago at Sago Mine, also in West Virginia, 12 miners died in another horrific mine accident. This event will long be remembered for the devastating media coverage where it was stated "12 Miners Found Alive" when in fact 12 miners were later declared as fatalities.

Common to both these disasters were the sad and tragic faces of family members searching for information and confirmation. A scene too often presented in these industry emergencies.

Ahead of any major emergency or crisis, a number of essential actions will prepare an organisation to communicate with employees and next-of-kin. They are:

* designate who is accountable for coordinating communication with families
* pre-arrange internal training to deliver bad news to families
* make provision for counselling rooms to manage enquiries from families
* establish detailed records of families' names, addresses and phone numbers
* arrange protection of families from the media and outside stakeholders
* establish guidelines on communication with contractors
* develop a message strategy for spokespersons to update information
* establish a dedicated family call centre and train telephonists

Organisations will be judged on how they treat people in a crisis. Effective communication is the key.

Product recall crisis

Whether it's a food scare, a design defect, a health problem, a manufacturing error or product tampering, product recall is part of the manufacturing process. There are hundreds of thousands of product recalls worldwide every week and some of these can escalate to crisis.

One of the essential elements in every product problem is the ability of the manufacturer or maker to realise at what point the problem can escalate to crisis status. Is it just a safety check or minor issue, or could it develop into a serious event with the possibility of class action and a critical effect on brand and reputation?

Crisis teams need to work with issues managers, product development managers, marketing managers and product recall teams to determine threats. It is essential to run regular product recall and integrated crisis exercises to test early warnings, identify gaps and confirm roles and responsibilities to manage a product crisis sooner rather than later.

Reality crisis simulations

Today, crisis simulation training needs to look and feel like the real thing so that the stress and the pressure of time is felt by participants. Importantly, crisis simulations need to test leadership - is the person in charge of the crisis response able to cope with the landscape of threats? Are they cool under pressure? Will they face urgent decisions and make the final call?

Henry Kissinger once said: "In a crisis, only the strongest strive for responsibility; the rest are intimidated by the knowledge that failure will demand a scapegoat".