In 1982, Chicago was in a state of panic. Within just a few days, seven people had dropped dead from cyanide poisoning. There was no explanation until investigators discovered the link: Tylenol.
Someone had laced Chicago’s Tylenol supply with cyanide.
When parent company Johnson & Johnson found out, it halted all production and advertising of Tylenol, issued a nationwide recall, and began developing tamper-resistant packaging — all while maintaining transparent communication with law enforcement and the public.
The company’s exhaustive response may have been costly, but it generated a tremendous amount of trust and respect. By demonstrating a real commitment to customer safety, Johnson & Johnson heightened its long-term brand loyalty.
Although implementing a product recall is a daunting prospect, it’s also an opportunity to prove yourself to your customers. Prioritize their needs over your desire to save face, and the recall can be a positive experience.
General Motors’ recall missteps
For most executives, the idea of shouldering the responsibility for a major crisis is terrifying. But this fear only hinders a company’s ability to resolve crises quickly and comprehensively.
From an external perspective, it’s clear that General Motors Corp.’s inaction has sparked public outcry, corporate restructuring, and a House subcommittee hearing. It’s the perfect case study of how not to handle a crisis. The company’s mistakes regarding its ignition switch, which are sadly all too common, include:
- Failing to take immediate action. When you discover an issue that could put customers in danger, respond quickly. GM hesitated for more than a decade. The company’s inaction cost people their lives and did irreparable damage to the brand.
- Minimizing the problem and ignoring the root cause. In 2005, GM rejected a proposal to fix the defect because it would be too costly and time-consuming. Instead, the company instructed dealers to inform customers that they could avoid triggering the defect by “removing unessential items from their key chain.”
- Choosing secrecy over transparency. GM’s attempts at damage control have been described as erecting a wall of silence, which has only fueled public suspicion and anger. As Transportation Secretary Anthony Foxx said about GM’s policy, “Literally, silence can kill.”
The right way to handle a recall
GM isn’t the only auto company in the news for dangerous product defects. Tesla has recalled almost 30,000 cars this year because of a potential fire hazard from overheated chargers.
However, unlike GM, Tesla has actively proven that customer safety is its top priority. In Tesla’s case, questions remain about whether the root cause was Tesla’s fault or that of faulty wiring within a few garages, but the solution was the same. The company wasted no time in providing an over-the-air software update that enabled the car to look for power problems — then it went further.
Tesla started shipping out redesigned plugs with an added fuse, clearly communicating directly with customers. Tesla’s proactive, transparent response bolsters the probability that it will emerge from the crisis a more trusted brand.
By establishing and following a crisis management protocol, you can ensure that your next product recall looks more like Tesla’s — not GM’s. Your process should include:
- Engaging comprehensive professional support from legal, engineering, and public relations specialists.
- Leveraging sales, warranty, and customer complaint data to identify trends, issues, and root causes.
- Establishing criteria for proactively triggering a recall review.
- Defining the product range that will be subject to recall.
- Incorporating regulatory requirements into recall plans.
- Securing replacement parts and/or defining a refund strategy.
- Tracking and analyzing all returned parts.
- Monitoring customer satisfaction during and after the recall process.
Throughout all of this, communicate with your customers openly (always with guidance from your legal team). Listen to what customers want, and use their feedback to craft a solution that meets their needs.
When customers have a sense of ownership in the recall process, they’re more likely to be satisfied with the outcome, which brings them closer to your brand.
How to avoid future recalls
Good crisis management goes beyond the successful implementation of a product recall. To regain your customers’ trust, you must demonstrate that you’re proactively averting the next recall by making fundamental improvements to your company.
In the wake of a recall, increase your investment in design, development, and testing. That means conducting product failure mode analyses, reviewing critical safety issues, and giving your engineers the power to prevent the shipping of a product if they detect a problem. As you make these changes, keep your customers informed — they should know that their best interest is your primary concern.
During a crisis, the easy way out is the wrong way. Shortcuts that compromise the safety of your customers aren’t just unethical; they’re bad for business. But when you do the right thing, everyone benefits.