The Fonterra scandal has highlighted the need for exporters to review their crisis management plans. Simulating a product recall is a good way to assess whether current protocols and procedures are likely to be effective, says Brendan Gray, a Professor of Marketing at the University of Otago.
Fonterra’s current crisis is its third food-related problem in the past five years. This, on top of Zespri’s attempt to avoid millions of dollars of duty payments, along with meat exports being held up in China because of documentation problems, may have damaged the reputations of all New Zealand exporters says Gray.
One way to help protect corporate reputation and brand image is to ensure that an effective crisis management plan is in place. Gray says typically this covers three main areas: prevention, preparedness and recovery.
1. Prevention
Protecting customer health and safety needs to be top priority. Scenario planning can help pinpoint potential problems and prioritise risks. Resources can then be focused on improving quality control procedures. This should minimise the likelihood of any previous problems recurring.
2. Preparedness
Export firms should check that crisis management procedures, protocols and manuals are in place and that key people are trained to implement these if the need arises. Production, distribution and communication tasks need to be assigned and emergency communication channels put in place. Simulating a product recall once a year is a good way of assessing whether crisis management procedures will work effectively if a major problem does occur.
3. Recovery
It is essential to recall faulty products immediately and to publicise this as widely as possibly. Stakeholders need to be told what you are doing to isolate and fix any problems. Preferably these activities should be communicated by subject experts, the chief executive and/or board chair. Do not delegate important “fronting” duties to public relations consultants or corporate communications staff: they lack credibility when compared to senior managers and subject experts.
Compensating anyone who is harmed should be swift and generous. Post-disaster communications may need to continue for several months to help customers regain confidence in the firm and its brands. Internal and external publics need to be satisfied that the organisation has increased its vigilance and improved its quality control, communication and crisis management procedures. Customers also need to be confident that any complaints will be taken seriously and acted upon quickly.
"Remember that being seen to act in your customers’ interests will be more persuasive than any apology," advises Gray.
