The Maggi issue has been on the boil for quite some time now, and Nestle has had to work over time to reassure customers and withdraw huge amount of stocks from the market. When such incidents surface where the firm’s image is in jeopardy, what can companies do to contain the fallout?
Five-point crisis management strategy
Wharton management professor John Kimberly in Knowledge@Wharton recommends a five-point crisis management strategy for companies in such situations, to restore credibility: “One, acknowledge that there is an issue that needs to be examined carefully. Two, buy time to get the facts. Three, do not deny involvement/responsibility. Four, do not attempt to estimate the magnitude of the problem. And five, commit to a speedy but thorough investigation.”
According to Kimberly, the most common mistake companies make is underestimating the magnitude of the problem. “This is an understandable effort to try to minimise the company’s role or involvement or potential culpability, but it will inevitably come back to haunt them and will be a public relations disaster,” he says.
Recall may have positive implications
Other brands (remember the cola brands and Cadbury’s?) have weathered similar crises and managed to rebuild their reputations. And the recall could have positive implications, if it becomes a catalyst for stiffer food safety regulation in India, observers say.
On crisis management, Kimberly also points to Toyota president Akio Toyoda’s response after Japanese police recently arrested Julie Hamp, a senior company executive, for possessing a controlled substance. Within a day, Toyoda called a press conference and apologised for the incident, while maintaining that his company believed Hamp had no intention of breaking the law. “To me, executives and staff who are my direct reports are like my children,” Toyoda said, according to a Reuters report. “It’s the responsibility of a parent to protect his children and, if a child causes problems, it’s also a parent’s responsibility to apologise.”
Read the full story on Maggi noodles and crisis management here .