Product recall for crisis management: Why should it be considered?

Product recall is costly, but taking the product off the market, corporation are potentially averting a major crisis whilst at the same time investing in consumer trust for future or continued relationship. Actually, corporations that recall products from the market are not only protecting their brand reputation (which may otherwise be badly affected if the product is left on the market), but also protecting their consumers from further harm. It is the best approach to reach out and own up for their oversight whilst steering clear of a reputation crisis.

Product recall is not a very recent or new phenomenon. For years, companies that care about their market and brand reputation have resorted to product recall once the first impacts of product malfunction are felt on the market. Even so, other corporations get to do it the hard way - when they are forced by consumer protection bodies or commissions to invoke or adopt such policies.

For companies that have built great brands, their brand reputation and its value-offering is their number one bank account from which they can ‘withdraw’ to protect their brand when things do not go well. As such, recalling products is one such effort to salvage brand reputation from any crises that may arise from product malfunctions. With issues mapping and crisis management plans in place, such corporations can (at the slightest signal of their brand having issues that may escalate into a crises), invoke a product recall policy.

In 2006, Dell, a leading global seller of personal computers at the time, was affected by a crisis in which its laptop computers were renowned for exploding. It all started with an article featured in an online technology news in June 2006. The article stated that a Dell Inc laptop exploded and went up in flames at a Japanese business conference. The cause of the explosion was from overheating batteries (which were supplied by Sony). It soon became apparent that the problem may have been rampant throughout the Dell laptop market. For example, as early as 2003, a Dell laptop caught fire in South Africa, causing second-degree burns to a fifteen-year-old girl. Again in July 2006, a truck in Nevada-USA, caught fire after a Dell laptop left in the cab of the vehicle exploded. The media frenzy around the issues after the June 2006 incident, coupled with increased public and stakeholder reaction, escalated the issues into a crisis to the extent that airlines started banning passengers from carrying Dell laptops with them.

Although delayed, Dell, in a joint initiative with Sony eventually recalled 4.1 million laptop batteries from its global market. Even though the recall cost approximately US $300 million, the beauty in it was that the industry regulations for making, transporting and using laptop batteries was scrutinised and has been improving since. The crisis eventually affected Dell’s market leadership for so many years, since.

As recent as June 2016, Toyota Motor Corp (Japan) recalled 3.37 million cars from the global market because of a possible deficiency affecting vehicles’ airbags and emission control units. No injuries have been associated with the manufacturing deficiency yet, but Toyota nevertheless took an initiative immediately to recall their vehicles before the issue could turn into a major talking point. It is yet to be seen how much more this plays out in terms of consumer trust and brand loyalty as Toyota Corporation has had many recalls in the recent years.

When executed promptly, product recall can not only serve corporations better in dealing with issues and avoiding crises, but also assist in retaining consumer trust and improving certain procedures in the production line. Product recall is in essence a corporation accepting responsibility for the problem and any crisis that may arise thereafter. Crises can affect the physical as well as the psychological wellbeing of consumers. It is therefore ethical for a corporation to recall product to reduce harm on its brand reputation, but most importantly for their consumers’ wellbeing. Although it can be an expensive undertaking, product recall positions a corporation’s actions as taking into account the fears, frustrations, anger and other emotions end-users may go through if they continued using the product.

Product recall expounds on the notion that the best actions in issues and crisis management must always be taken in the best interest of all parties that may be affected by issues and crises.

#BrandReputation #CrisisManagement #Marketing #PJElwyns #ReputationManagement #CorporateCulture

Crises: Is your organisation’s leadership looking the other way?

In one of my previous articles tackling leadership and crisis management, I wrote about why organisational leadership perceive crises as a catalyst for problems and not as an opportunity for learning and improving organisational operations. Since then, I have had a number of discussions on the topic, and I decided to share more thoughts in this short write-up.

The rarity of crisis may sway organisational leadership to believe that their organisation is less prone to a crisis event until they are facing one. Some organisations do not bother having crisis management plans in place, and look at unfolding crises as just some operational issues until the immediate damage begins to show. The hitch is, once a crisis occurs, an organisation falls under close media, public and government scrutiny. As such, crises run the risk of escalating in intensity and interfere with normal business operations.

Where an organisation does not have a crisis plan to monitor issues and engage a crisis as it unfolds, it engages knee jerk responses which may be uncoordinated to yield the much needed relief from a crisis. Because crises disturb an organisation’s stability by creating potential for loss of business, reputation and endangering business continuity, among others, it is a grave mistake for leadership to consider crisis as just ‘one of those operational issues’ and handle them with that flicker.

The tide is fast changing and the environment is no longer the same. Amongst others, new technologies and the increasing consumerism that influences change in public policies for more consumer protection, allows for issues to quickly escalate into crises, making crises inevitable. Such developments continue to jolt organisational leadership into realising the detriment of burying their heads in the sand. Modern organisational leadership no longer has that privilege. Crises can, within a very short space of time, cost organisations millions of dollars in damaged reputation, lost market share, and at times in litigations.

Leaders in an organisation should take the drive to institute crisis management measures including instituting a crisis team with a plan to track issues for potential crises and engage one when it occurs. At times running a crisis simulation program across all functions of the organisation strengthens preparedness. Where an organisation lacks the capacity, it is advisable to engage experts (independent or otherwise) to work with the organisation towards achieving a strategically fitting crisis management plan for your organisation.

As one of my many acquaintances in management indicated, ‘crises offer many opportunities for reviewing processes, systems and stakeholder relationships, among some facets. The old adage that "silence is golden" is now under great threat (when it comes to crises)'. Organisational leadership need to factor in organisational crisis management when thinking strategic business plans, and take notice of the impact that crises can have on their organisation's business success and continuity.

#StrategicPlanning #Leadership #CrisisManagement #PJElwyns #BrandReputation #ReputationManagement

The influence of Social Media in Crisis Management: Where does the practitioner sit?

We all appreciate the magnitude social media has blended with our everyday lives. People are spending their energies feeding the social media wheel with all sorts of emotions. I recently came across a sign in an office space which read ‘In case of fire, please rush to the emergency assembly point, before posting a picture of the incident on social media’. It was a glaring reminder of how much social media can push people into taking certain actions even when their life is under threat. It also drew me to reflect on how social media can quickly break news as it unfolds.

The reign of Social Media

Social media has literally taken over the control of information flow. It has literally empowered the public to create news and shape information. It has also made the job for public relations and crisis management practitioners both exciting as well as a little more challenging. Practitioners have lost a substantial amount of control over message dissemination - there is more public control on the type of information they want to engage with, and its sharing. Social media has changed the pace at which news breaks. Coupled with a 24/7 news cycle, it is now a different ballgame for practitioners, altogether.

In the event of a crisis unfolding, organizations are more exposed and vulnerable to the power and influence of social media than ever before. With social media, people can amplify a crisis within minutes whilst you are scaling the walls of bureaucracy to issue a statement. It can only take a tweet from a crisis victim or a bystander, and within minutes the incident is transmitted ten thousand times across the globe.

Where does the practitioner sit?

The manipulative influence of public messaging and the associated interpretation of a crisis event underline the need for practitioners to get on their feet as quickly as possible and take hold of the messages as the crisis escalates. The worst mistake is to think and hope that the social media frenzy will die down on its own – yes, it will eventually die down, but what about the reputational damage caused whilst you are wishing, hoping and procrastinating? The battered reputation will stay with your organization and may have irreparable damage to its corporate profile, business operations, and profitability. The way you handle a crisis will sway your public's opinion, either in favour or against your organisation. So hoping and wishing has never been a strategy.

Leveraging your Social Media

Social media has, on the other hand, accorded practitioners an opportunity for a two way by-the-second communication to engage with the organisation’s public during events of crisis in nature. It is an opportunity to feed the social media wheel with information that will shape public interpretation of the crisis and their perception of the organisation during turbulent times such as crisis moments. As soon as social media platforms gets busy with your crisis, responsible persons have to immediately activate their organisation’s crisis response arsenals. A quick content analysis of what the conversation on social media is all about should help shape your responses and communication content.

As practitioners, it is necessary to clearly spell out roles and responsibilities for people in your crisis management team. Whatever roles assigned, never forget the role for monitoring social media and sense-making of its content. By any means, avoid contradicting statements from leading persons in those roles. At least have a line of thought to derive statements from – this can best be mapped from the organisation’s response contained in the press release.

Apparently, having the courtesy to continuously engage your public with information on new developments around the crisis situation, goes well with your crisis response. Building an effective flow of information is an essential ingredient in cultivating confidence and trust with your public, as well as helping them achieve sense-making of the crisis itself. It also reflects the organisation’s sense of care for both its reputation and its stakeholder’s emotions and safety. Additionally, caution should be taken in the choice of words and the tone when sharing your information to avoid inflaming the crisis situation or infuriate crisis victims. Most importantly, get your facts correct.

Energise your team, and match your words with action

Managing and putting together a crisis response action, in general, can quickly sap the energy from the crisis management team. Apart from the organisational spokesperson, it may be wise to engage top level management in crisis communication activities - someone the public holds high, and is in a position of influence. Further, any promises made in your statements must be relevant and match your deeds. AirAsia Flight QZ8501 crisis presents a very successful picture of this approach. When the crisis occurred, the Chief Executive Officer, Tony Fernandes was present throughout the crisis, answering questions alongside Government officials and constantly engaging stakeholders on digital platforms. His presence matched the promise he made that he was ‘..not going anywhere’.

When your organisation perceives that it is time to press the crisis panic button (i.e organizational issues are blowing up into a crisis), it is very necessary for practitioners to inform the organisation's employees as quickly as possible - as opposed to letting them get the surprise from social media. That can have ramifications on the organisational culture and its dynamics.

Public relations and crisis management practitioners should understand that with social media, information is no longer for the privileged few. Practitioners ignoring social media around an unfolding crisis would be doing their organization a huge disservice.

#CrisisManagement #SocialMedia #PublicRelations #PJElwyns #ReputationManagement #BrandReputation