When No News Is Good News

www.hbr.org
H B R CAS E ST U D Y
How can BestBaby
bring its PR crisis
under control?
Four commentators offer
expert advice.
AND
COMMENTARY
When No News Is
Good News
by Bronwyn Fryer
•
Reprint R0104A
A celebrity’s baby is severely injured when her stroller tips over. Was it
user error or a faulty product? The media go wild—and BestBaby faces
a PR disaster.
H B R CAS E ST U D Y
When No News Is
Good News
COPYRIGHT © 2001 HARVARD BUSINESS SCHOOL PUBLISHING CORPORATION. ALL RIGHTS RESERVED.
by Bronwyn Fryer
Greg James punched the button on the Lexus’s
stereo, scanning the stations for the morning
news story he didn’t want to hear. Sure
enough, 101.7 was in mid-broadcast, playing
that scratchy, dramatic 911 recording. “Help!
The baby!” a young woman shrieked. “She’s—
oh, she’s hurt her head! She’s bleeding all over!
Oh, my God—it’s not my fault!”
A fresh wave of nausea hit Greg as he forced
himself to listen for an update on the situation.
“As we reported yesterday evening, the injured
child is Avery Nelkin, the three-month-old
daughter of Academy Award winners Nick Nelkin and Celia Winston. She remains in critical
condition, and doctors are uncertain whether
she will recover from injuries sustained when
her stroller rolled down the driveway of the
Nelkins’ Laurel Canyon home.”
The broadcast continued as Greg turned into
the BestBaby parking lot. “Caught by reporters
this morning at the hospital, Mr. Nelkin contin-
ued to lay blame for the incident on the manufacturer of the stroller—BestBaby Corporation
of Des Moines, Iowa—and implied he will initiate legal action against it. So far, the company
has not commented. We will continue to update you throughout the day.”
Greg winced and clicked off the radio. It was
all like a bad dream. Throughout the previous
evening, that horrible 911 recording—and Nelkin’s threatened lawsuit—had been inescapable
headline news. Greg sighed wearily as he eased
into the reserved parking spot. “It’s obvious
that I’ll make some kind of announcement today,” he said to himself. “But what should I
say?”
Greg found Jane Benson, the company’s
public relations manager, waiting for him in the
lobby. She wondered whether he’d heard about
the recall demands. She grabbed his elbow.
“Greg, we’ve got a huge problem here,” she said
in a low, tense voice. “My phone’s been ringing
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harvard business review • april 2001
page 1
When No News Is Good News •• •HBR CA SE S TUDY
off the hook. CNN and ABC News have both
left messages on my voice mail. Their crews
are on the way. They’ve asked for a statement
from you. I haven’t returned any calls yet.” She
paused briefly, gauging Greg’s deepening
frown. “And I—I’ve been checking the Web.
Three sites are running headlines calling us
‘WorstBaby.’ This morning, Consumerwatch
posted something on its Web page, asking
users whether they think we should recall the
stroller. It’s already logged more than a hundred responses saying we should. People are
swapping stories about accidents with our
strollers. We simply have to come up with a response, and pronto.”
“Call an all-hands emergency meeting,”
Greg responded. “I want all executive staff in
the boardroom in an hour. We’ll give everyone
a full briefing. Don’t worry,” he said compassionately, scanning Jane’s worried expression.
“We’ll get this under control.”
What Went Wrong?
Bronwyn Fryer is a senior editor at
HBR.
harvard business review • april 2001
“Everything’s happening so fast,” Greg
thought as the elevator doors closed. “The
Nelkin accident occurred yesterday evening.
Now all these angry people are coming out of
the woodwork with broken-stroller stories.
Funny they didn’t say anything before.” He
pursed his lips. “I haven’t even had time to figure out what’s happened, let alone consider a
recall. And now,” he thought bitterly, “it looks
like the Consumer Product Safety Commission may make that decision for me.”
Greg searched his memory. In the ten years
he’d spent running BestBaby, he had never
confronted a bona fide PR crisis. Indeed, as far
as public relations was concerned, the company had always had a good track record. In
1975, the company’s cofounder and former
CEO, Simon Levison, had asked him to join BestBaby as head of sales, handpicking Greg
from a raft of brilliant candidates. After serving as vice president of sales and marketing
and later as COO, Greg found himself in the
CEO spot when Levison kicked himself upstairs
to the chairmanship.
After 20 years at BestBaby, Greg had been
overjoyed to take on the position. He loved
children; he and his wife had three grandchildren. He felt like he’d trained his whole life to
run a company that catered to little ones. Greg
knew the 1,200-employee company intimately
after having spent so many years running sales
and operations. He felt that BestBaby was really his baby: he took personal pride in the
company’s excellent reputation as a manufacturer of cribs, car seats, strollers, and toys. Distributors and retailers were unflaggingly loyal
and stockholders supportive. The ads, with
their tag line “BestBaby—Best for Your Baby!,”
were familiar elements in parenting magazines. Product reviews were generally good,
and the media were friendly. Although overall
sales had remained relatively flat during the
past few years, the company had been buoyed
by strong sales from a recent line of collapsible
jogging strollers introduced in 1997 and regularly updated with trendy colors like raspberry,
blueberry, and tangerine.
What about consumers? “We haven’t had
more than the usual number of consumer
complaints, especially after we instituted that
satisfaction guarantee and five-year warranty a
few years ago,” Greg mused. Of course, the last
few years had also produced their share of
management challenges. There was that painful moment in November 1998 when Greg had
had to order those cost-cutting measures. He’d
had to lay off dozens of part-time workers and
offer early retirement to more than a few fulltime ones. He’d worked closely then with the
new COO, Keith Sigismund, to streamline and
consolidate BestBaby’s supply chain. Following the winnowing process, one particular supplier, Arzep Enterprises, emerged as the chief
provider of materials, furnishing BestBaby
with 80% of its plastic, rubber, and metal parts;
nylon cords; and other equipment.
Keith had proven himself serious, hardworking, and wholly dedicated, although his authoritarian, no-nonsense manner occasionally
rankled managers and employees, especially
those who worked in the manufacturing facility. Lisa Ronell, a popular, good-humored
woman who headed up human resources, had
fielded several complaints about Keith’s apparent obliviousness to the shop-floor and warehouse personnel. During a meeting with Greg
early last year, Lisa mentioned that one employee in particular—outspoken Donna Di
Meola, who wore “Union: Yes!” buttons—had
complained that Keith routinely ignored her
when issues came up.
“Donna says that Keith doesn’t really listen
to her,” Lisa had told Greg. “She says he’s obviously preoccupied and cuts her off if she brings
problems to his attention. I suggested that if
page 2
When No News Is Good News •• •HBR CA SE S TUDY
that’s the case, she should write up her communications as memos and bring issues to his
attention that way. And keep copies.” During
Keith’s last performance evaluation, Greg had
urged him to brush up on his listening skills,
without specifically mentioning Donna’s
complaints.
Suddenly, Greg also remembered Keith’s
saying that Arzep had recently switched suppliers, going with cheaper materials in an effort
to shave expenses of its own.“ Keith said that
the new material isn’t as sturdy as the previous
brand, but he’s never reported a diminishment
in quality,” Greg thought.
He resumed his mental inventory of corporate difficulties. “The only real mark against us
was that liability suit six years ago, which we
settled,” he said to himself. “After that, I hired
Robert Howe as corporate counsel. Boy, Robert did a great job on that stroller case last
year, when he showed that our product didn’t
fail and that the nanny hadn’t fastened the
seat belt.”
Point the Finger?
As the crisis meeting convened, Jane placed
copies of the latest news clippings before each
place at the conference table. Lisa pulled Greg
aside as the senior managers found their seats.
“Greg, I’ve had several people call this morning, wanting to see me,” she worried. “Two
managers in manufacturing told me they want
to quit. So does Donna.”
Greg nodded, taking in the bad news. “Lisa,
do your best to keep people calm. Beg them
not to quit. I’m planning on making a speech
to the company after our meeting. Please ask
them to hang on at least until the end of the
day. And tell Donna I want to meet with her as
soon as possible.”
“Sure, Greg, I’ll try,” Lisa responded grimly.
“But this whole Nelkin thing has really upset
her. The only person around here who can do
any persuading is you.”
Lips tight, Greg moved to his place at the
head of the conference table and cleared his
throat. “Good morning. First things first:
there’s been no update on the condition of
Avery Nelkin,” Greg announced to the group.
“I know you share my concern about this child.
Of course, we all know we make a great product, but we’re facing a real public relations crisis here. We have not yet answered calls from
the media, but I agree with Jane that we
harvard business review • april 2001
should make some kind of announcement, and
soon. So before we leave this room, we need to
have a complete disclosure of everything we
know about this issue,” Greg waved his pile of
clippings, “and a plan of action. Jane, you
start by filling us in on the news reports.”
Jane stood up. “Well, I’m assuming you all
watched the news last night.” She looked
around the table, and several heads nodded.
“Nelkin told reporters that his 14-year-old
daughter, Sophie, was taking the baby out for a
late-afternoon jog. Sophie claimed to have set
the brake on the stroller while it was in the
driveway. Then she went back to the house to
lock the door, but while she was doing that,
the stroller rolled down the driveway and fell
on its side, and the baby’s head hit the concrete.” Jane paused. “So she called 911—that’s
the phone call all the radio stations keep playing. No one claims to have seen the incident,
but Nelkin insists that this accident is not
Sophie’s fault. He says, quote, ‘She’s absolutely
trustworthy and responsible, and this incident
has traumatized her. It’s clear that the brake
on the stroller didn’t work.’”
Keith sat through Jane’s summary with a
scowl on his face. When she was finished, he
stood up and pulled what looked like a copy of
a memo from his leather notebook. “I don’t remember reading this at the time it was written, and I couldn’t find it in any file, but
Donna handed this to me this morning,” he
said grimly. “She’s that union organizer in machining who likes to send me alarming memos
on a weekly basis. I usually look into them, but
so far they haven’t unearthed any serious
problems.
“Anyway, Donna told me this morning that
she keeps copies of all her memos. This one is
dated January 15, 2000.” Keith cleared his
throat and read aloud: “New Arzep brake fittings don’t grab the front wheels as easily as
previous ones. If the brakes actually fail, a child
in the stroller could be hurt.”
Everyone in the conference room gasped in
unison. Simon Levison was visibly angry. He
pounded his fist on the table. “Well, if that’s
true, then this is absolutely not our fault!” he
fumed. “The problem is with Arzep’s brake fittings, not our manufacturing. We can’t be held
responsible. I think we should put out a press
release saying that we are looking into problems at Arzep.”
Greg shook his head. “Simon, any kind of
page 3
When No News Is Good News •• •HBR CA SE S TUDY
We have a great product.
But in cases like this, the
public has already
determined our
company’s guilt because
of the celebrity of the
victim.
harvard business review • april 2001
denial of the charges will certainly make things
look worse. Besides,” he pointed out, “if this
memo has been leaked outside the company, it
will look like a smoking gun.” An uncomfortable silence fell over the room.
“Well, I definitely think we should issue a
press release saying that we are investigating
this matter, but we have to do more than that,”
said Jane finally. “Greg, you’re going to have to
go on TV and give some kind of profuse and
public apology to Nick Nelkin, Celia Winston,
and their family.”
“He should absolutely do no such thing,”
snapped the lawyer, Robert Howe. He stared
hard at Jane, who shifted uncomfortably. “No
one saw the accident, and this very well could
have been the teenager’s fault. An apology will
look like an admission of guilt.”
Keith spoke up. “We have a great product
and an airtight reason for pursuing Arzep. But
in cases like this,” he added with audible bitterness, “the public has already determined our
company’s guilt because of the celebrity of the
victim.”
Jane insisted that the company’s chief concern at this moment was how to spin the story.
“The public’s memory is short,” she said. “Is
there any way we can undertake a totally separate PR campaign in a few months, to clean up
the company’s image? There may be an opportunity in this, depending on how we handle it.
Maybe if we do some pro bono work and get
the word out, in six months we’ll look like
Mother Teresa.”
“Well, one thing is certain,” said Greg.
“This negative publicity is highly damaging
and needs to be nipped in the bud. We have
to be very careful in communicating with
everyone—our own employees, the news
media, the public, and the Nelkin family.”
He searched the faces at the table.
How can BestBaby bring its PR crisis under
control? • Four commentators offer expert
advice.
See Case Commentary
page 4
When No News Is Good News • HBR C AS E STU DY
Case Commentary
by John R. Hall
How can BestBaby bring its PR crisis under control?
Although it’s possible that
the incident involving the
Nelkin baby was truly an
accident, Greg has to
assume that it wasn’t.
page 5
As a former CEO who went through a
similarly harrowing experience, I can certainly
sympathize with Greg James. Like him, I received
a lot of conflicting advice from different people
within my organization, yet I had to make the
right decision for everyone, both inside and
outside the company. And like Greg, I had to deal
with some very unpleasant facts about which I
was previously unaware. In the case of Ashland’s
1988 oil spill, I learned to my horror that the
storage tank that had collapsed was not a new
model but a “recycled” one. To make matters
worse, the engineers who had reconstructed the
used tank had failed to pay sufficient attention to
standard industry procedures.
Although it’s possible that the incident involving the Nelkin baby was truly an accident,
Greg has to assume that it wasn’t, because that
is the public’s perception. Nor is it constructive
to lay blame on anyone. Only by holding his
company fully responsible can Greg ultimately
restore the public’s faith in BestBaby.
In Ashland’s case, we reclaimed our good
name as a corporate citizen by acting quickly
and decisively to disclose all the facts, engage
an outside investigator, and pay whatever
price was necessary to clean up the mess. The
price we paid for the cleanup was, in the end,
money well spent. As a result of our aggressive
actions, the press articles following the terrible
incident were largely positive.
Greg should call a news conference as rapidly as possible. In it, he should apologize to
the Nelkin family for any deficiency that may
have existed in the stroller. He should offer the
family his and the company’s best wishes for
their daughter’s speedy and complete recovery. And he should announce a series of decisive actions. He should say that, as a first order
of business, BestBaby will immediately recall
all strollers of this type for investigation and
possible modification of the brakes.
Second, Greg should openly state all the
facts—including the change of suppliers and
the warning memo from an employee—
because leaving them for a reporter to discover later will be extremely damaging. In addition, he must say that the company is
appointing a reputable, independent outside
investigator to conduct a full review of the accident; he must promise that the conclusions
of the investigation will be made public upon
its completion. The investigation should include an evaluation of materials provided by
all component suppliers. This is particularly
important since BestBaby had made changes
to its supply chain and since the change to new
materials had been questioned by at least one
employee. Once the study is complete, BestBaby should make it available to the baby
stroller industry at large so that all companies
involved in the manufacture of strollers might
benefit from it. Finally, Greg should pledge full
cooperation with all interested parties, including government agencies, the media, and the
company’s customers and suppliers.
During this press conference and subsequent
statements, Greg should emphasize BestBaby’s
long history as a supplier of products for children and the company’s reputation for superior product quality. He should clearly state his
determination to find the exact cause of the
problem and to modify the stroller to be certain that a similar incident will never occur.
And finally, of course, BestBaby must deliver
on all of Greg’s promises, down to the finest
detail. By doing all these things, it is entirely
possible for Greg’s company to emerge stronger and healthier.
John R. Hall is the retired chairman of Ashland
Incorporated in Covington, Kentucky. As
chairman from 1981 to 1997, he presided over his
company’s response when an Ashland storage
tank collapsed in January 1988, spilling diesel
fuel into the Monongahela and Ohio Rivers.
harvard business review • april 2001
When No News Is Good News • HBR C AS E STU DY
Case Commentary
by Ian Mitroff
How can BestBaby bring its PR crisis under control?
In the emotionally
volatile court of public
opinion, a baby’s injuries
are the only admissible
evidence, and there is no
defense.
harvard business review • april 2001
This is not just a public relations crisis; it’s a
management crisis. The earlier lawsuits and
the memos from Donna signaled the existence
of ongoing problems at the company. The fact
that that Greg, Keith, and other executives ignored or minimized these early warning signs
shows just how short-sighted BestBaby is. Had
an effective crisis-management team been in
place to pay attention to these signs, the current situation might have been avoided.
Unfortunately, the question of liability is already moot. Even if Robert, the attorney, were
able to prove in a court of law that BestBaby
isn’t at fault, he’s already lost the bigger, much
more important case. In the emotionally volatile court a baby’s injuries are the only admissible evidence, and there is no defense. Any
attempt to deflect responsibility—as we have
seen so clearly in the recent Ford and Firestone
debacle—will only sink BestBaby more deeply
into the quagmire. Nor should Greg blame
anyone within the company. Rather, he will
need to ask himself: what illness existed within
our corporate structure that allowed this to
happen? To treat the illness, BestBaby will
have to swallow bitter medicine.
Besides bracing for a class action suit, Greg
must now face the hard fact that he has only
one real choice. He can pay once now for his
company’s mistakes or pay for them later on
an ongoing basis. If he pays now, he has a
much stronger chance of controlling the damage and reviving the company’s public image.
Therefore, like it or not, BestBaby must assume complete and total responsibility for the
Nelkin accident and all others involving its
products.
Greg’s first task must be to find out the
awful truth about unreported and unheeded
product and supply problems before the media
do. He should immediately hire an independent investigator to interview Donna and
other employees privately and confidentially.
The investigator will have to unearth the history of any problems and report all findings directly to Greg on a daily basis. Greg will also
want to hire a crisis management expert who
will be charged with setting up and training a
permanent, internal crisis-management team
comprising people from the operations, mar-
keting, IT, security, and legal departments. The
team will need to meet regularly with employees and report on and address issues on a
monthly basis. Greg should definitely consider
assigning Donna to the team.
At the press conference, Greg will have to
cross his personal Rubicon. He will have to
look right into the cameras and say, “We violated the trust of consumers.” He must be absolutely sincere and contrite. He must make a
frank apology to the Nelkins and anyone else
whose children have been injured by BestBaby
products, and he must offer to pay all their
medical expenses. He must truthfully lay out
all the facts as he understands them. Greg
keeps an upper hand only by airing the facts
on his terms; he can be sure that, if they haven’t already, the media will find out about
Donna’s memo. He must also lay out an aggressive plan of action, detailing how and
when his company will fix organizational and
operational problems. He should introduce the
members of his new crisis-management team.
And he must schedule another press conference in three days to update the public.
In the following months and years, BestBaby will have to repair its public image by
consistently demonstrating to the media and
the public how the company has redefined itself. Executive management should review all
company business practices and key assumptions and reject or revise those that have
brought BestBaby to this pass. The company
should open its facilities to inspection, showing how it has changed its operations for the
better. Greg and his staff will need to think
outside the business-as-usual box and identify
with children and parents. They will have to
make amends through some highly visible,
charitable acts to prove that BestBaby can rise
to an ethical standard far beyond that of the
bottom line.
Ian Mitroff is the Harold Quinton Distinguished
Professor of Business Policy at the University of
Southern California’s Marshall School of
Business. He is also the president of
Comprehensive Crisis Management, a
consulting firm in Manhattan Beach, California.
His latest book is Managing Crises Before They
Happen (Amacom, 2000) with Gus Anagnos.
page 6
When No News Is Good News • HBR C AS E STU DY
Case Commentary
by Robin Cohn
How can BestBaby bring its PR crisis under control?
The faster the story is
out, the more quickly it
can be contained and the
more forgiving the public
is willing to be.
page 7
Greg and Jane are correct in wanting to get
out a media statement, but they have waited
too long already. In the early stages of a crisis,
the faster the story is out, the more quickly it
can be contained and the more forgiving the
public is willing to be. The crisis meeting
should have been called as soon as the company heard about the accident, and Greg
should have issued a statement that same
evening.
The minute this meeting is over, Greg
should personally call the Nelkin family. He
should offer to meet with them privately and
to provide whatever assistance possible, including paying the medical bills. Such a meeting
should not be publicized. Then Greg should
issue a voluntary recall before the U.S. Consumer Product Safety Commission asks for
one. He should require the company’s distributors to stop selling jogging strollers until
further notice. He and Keith should also apologize to Donna.
With these orders of business out of the
way, Greg should address the employees. His
statement can serve as a rehearsal for the public one. He should say something like: “I know
all of you are shocked by the Nelkin baby accident. We’ve always prided ourselves on making the best equipment, yet something here
went terribly wrong, and we have to fix it immediately. I am about to hold a press conference. On behalf of all of us, I will apologize to
the Nelkin family as well as to our other customers. I will announce a product recall; I will
also stress that we are developing new qualitycontrol procedures to see that this never happens again. We will be discussing these steps
with you before releasing them to the media.”
Greg should also tell the staff that Donna tried
to alert management about the problem and
that he has apologized to her.
Greg’s statement to the media will have to
accomplish several simultaneous objectives.
It’s important to stress his company’s concern
for its customers and to show that it has nothing to hide. He should not assign blame. The
public does not care about what’s legally acceptable. It cares only about what’s morally acceptable, which is that BestBaby is responsible
for the safety of its products. If the company
appears to deny responsibility, respond too
slowly, cover up, or put its own interests first,
the public will lash out—and damage to BestBaby’s reputation could be irreparable.
Aside from expressing sincere concern for
the Nelkin baby and other children injured in
stroller accidents, Greg will have to state all
the facts as he knows them. He won’t have
complete information at the time of the press
conference, so he should say that the company
is working to determine the cause of the accident and to fix it and that BestBaby will continue to provide information as it becomes
available. He should add that the company is
voluntarily recalling its jogging strollers and
stress that it will work with the Consumer
Product Safety Commission. Finally, he should
introduce Jane Benson as the future spokesperson. It will be Jane’s unenviable job to
make absolutely sure that the public stays apprised of the results of the investigation.
Greg should open up the floor to the tough
questions that reporters will ask and address
each one as candidly as he can. If, for example,
someone mentions the employee memo, Greg
will have to admit its oversight and emphasize
that the company is investigating the matter. If
questions arise about the brakes, he should not
yet mention Arzep’s name since the cause of
the accident, although suspected, has not been
determined.
Unfortunately, even the most deftly conducted press conferences are not enough to
begin rebuilding customer loyalty. This can
only be accomplished one consumer at a time.
BestBaby will have to surpass public expectations. Greg should ask himself: “If I owned a
jogging stroller like this, what’s the most fair
and generous thing BestBaby could do for
me?” The company might, for example, replace the recalled strollers with top-of-the-line
models. Certainly, such replacements would
come at a substantial cost. But a response like
this would go a long way toward heading off
public anger—and, in the end, cost far less
than the price the company would pay for belated action or additional inaction.
Robin Cohn is a New York–based crisismanagement consultant and the author of The
PR Crisis Bible (St. Martin’s, 2000). She directed
the response of Air Florida after the fatal crash of
its Flight 90 in the Potomac River in 1982.
harvard business review • april 2001
When No News Is Good News • HBR C AS E STU DY
Case Commentary
by Alan H. Schoem
How can BestBaby bring its PR crisis under control?
To avoid the commission
staff’s making a
preliminary
determination of hazard,
BestBaby must initiate its
recall within 20 working
days.
harvard business review • april 2001
BestBaby is in trouble, but its situation is not
hopeless. The most effective way for the company
to address its defective brake problem and restore
consumer confidence in its name is to work cooperatively with the U.S. Consumer Product Safety
Commission (CPSC; www.cpsc.gov) to recall its
jogging strollers. If the company acts quickly in
mounting a recall, it can demonstrate its commitment to its customers and to product safety.
In this unfortunate event, BestBaby even has
a role model. On October 4, 1982, Johnson &
Johnson announced a nationwide recall of 31 million bottles of Tylenol after seven people died
from taking cyanide-laced Extra Strength Tylenol capsules. It was one of the most prominent
product recalls in the United States, and the company’s aggressive action went a long way toward
restoring trust in its brand. In the end, Tylenol
more than survived; Johnson & Johnson also
raised the standard for consumer product
packaging.
Greg and BestBaby will have to accept the fact
that they are likely to be sued by Nelkin and others. The company should not allow that likelihood to interfere with its recall. Its goal should
be to prevent other injuries or potential deaths.
And it would serve BestBaby no useful purpose
to blame its supplier for the problem. In the public’s mind, BestBaby is responsible since it manufactures the strollers. Legal action against Arzep
can always be pursued later.
BestBaby should immediately contact the
CPSC’s Office of Compliance and ask for help in
conducting a recall under our Fast Track Product
Recall Program. Under it, a company reports its
problem to the CPSC and offers to conduct a recall. In exchange for this cooperation, the CPSC
foregoes conducting a detailed evaluation of the
product and making a preliminary determination that the item possesses a defect and is a substantial product hazard.
The company has a lot to do in a very short
time. To avoid the commission staff’s making a
preliminary determination of hazard, BestBaby
must initiate its recall within 20 working days. Issuing a recall requires more than simply sending
out a press release; for the recall to be effective
and acceptable to the CPSC, it must follow the
specifications of the Fast Track program. Thus,
before the official recall can begin, BestBaby
must first work with the CPSC to determine the
scope of the recall by pinpointing exactly when
Arzep changed the brake components; perhaps
the recall can be limited to those strollers with inferior brakes. Second, BestBaby must determine
the remedy it will make available to customers.
Repairing and eliminating the brake problem
would likely be the least expensive option. If a repair is not immediately available, the company
could offer a refund of the purchase price or a replacement stroller.
Once the remedy is agreed upon, BestBaby
must work with the CPSC to figure out the most
effective ways to notify consumers of its efforts to
remove the dangerous strollers from the marketplace. The company can also use this public notice to alleviate some of the negative publicity
surrounding its product and the accident involving baby Nelkin. Greg might also wish to participate in the CPSC’s press conference announcing
this recall and to issue a joint press release with
the CPSC. Because of the very real risk of serious
injury and death as well as the negative publicity
surrounding the company, BestBaby also would
do well to announce the recall in paid advertisements. While the CPSC does not allow ads announcing a recall to be marketing tools, the
agency would allow language expressing the
company’s commitment to its customers. BestBaby must also post the recall notice prominently on its Web site and place recall posters in
retail stores that sold the strollers and in pediatricians’ offices.
In the CPSC’s experience, companies that are
up-front with their customers—and that act
quickly to prevent further injuries—can maintain or regain the loyalty and admiration of the
public.
The comments by Mr. Schoem were made in his
official capacity and are in the public domain;
they do not necessarily reflect the position of the
CPSC.
Alan H. Schoem is the director of the Office of
Compliance of the U.S. Consumer Product Safety
Commission in Washington, DC.
Reprint R0104A
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