Savvy CEOs Respond Quickly to Corporate Crises

September 28th, 2007

Lately the headlines seem to be full of corporate crises. Mattel and Graco have been forced to recall products, pharmaceuticals have been withdrawn from the market. CEOs seem to be constantly apologizing to customers for potential product liability issues. Or even for untimely price cuts, as Steve Jobs did when angry customers protested on the Internet about price cuts on the iPhone.

Some of these crises could have been averted, but most could not. However, they can all be monitored and responded to in a timely fashion that lowers the risk for the company and preserves its image with stakeholders.

Notice how fast CEOs have to respond these days. Years ago, when Johnson & Johnson found that some bottles of its product Tylenol had been tampered with, the company made its crisis a case study through the swiftness of its response. The company responded within days, recalling the product and getting out information to its customers.

But that was before the widespread emergence of online communities. Companies no longer have days to respond to a health and safety crisis, whether inside their own companies or externally for their products. A crisis plan must be in place. It must allow for immediate response, and it must respond within the new parameters of sustainability and stewardship.

For this reason, it’s a good idea to have integrated software systems with the ability to monitor, predict, and communicate potential problems. In our own company, we are working hard to make our products more predictive, proactive, and analytic rather than merely responsive.

It’s imperative that we control risk as best we can, and when we can’t, we must have the quickest, most effective response.

Tags: crises pharmaceuticals product liability issues stakeholders stewardship sustainability

Entry Filed under: Operational Risk Management, Corporate Responsibility, Corporate Governance