ALP: Crisis Management Planning
July 2007
Question
As the melamine in pet food situation showed, news travels fast these days, and bad news travels faster. If you make or market consumer goods, or supply customers who do so, you will likely have a product problem some day. How will you deal with it?
Answer
We frequently work with clients to develop crisis management plans and to manage the product events they face. The best thing you can do to ensure you effectively manage any crisis is to prepare in advance and be ready with the right team:
- Key Production Employees – Contact the people in your organization who can identify the product at issue, identify whether any product is on-hand, quarantine any product on-hand, retrieve product from the distribution claim, inform customers, and locate replacement product.
- Scientific/Manufacturing Experts – Use experts to identify the problem, determine why it occurred and how it can be prevented in the future, and assess the risk posed to consumers.
- Regulatory Experts – Designate someone with regulatory experience to be responsible for those communications and to determine if a recall is necessary. In the court of public opinion, you cannot win an argument with public health officials. Establishing a cooperative relationship is essential. If you sell food products, experts can also help prepare for the inspection of your facilities that inevitably follows if a recall is necessary.
- Public Relations Experts - A critical objective in any product crisis is to minimize damage to long-term positive relationships with customers and consumers. Clearly explain what the problem is and what the real risk is while making it clear that consumer safety is your top concern. Get expert help in developing a plan for dealing with press and consumer inquiries.
- Legal Counsel - Engage legal counsel immediately, not only to advise you with regard to your risks and obligations, but also to review your insurance contracts and contracts with suppliers to determine what ability you have to recover related costs.
A product problem can cause great damage to a company. Dealing with the problem properly is critical to minimizing the long term effects. Advance preparation is key to being able to respond quickly and effectively.
