Page 191 - (DK) The Business Book

WORKING WITH A VISION 189

See also: Managing risk 40–41 ■ Hubris and nemesis 100–03 ■ Learning from Supplier roles in crisis
failure 164–65 ■ Contingency planning 210 ■ Coping with chaos 220–21
In their article “The Toyota
Group and the Aisin Fire,”
be minimized and its reputation
authors Toshihiro Nishiguchi
even enhanced. As president John
and Alexandre Beaudet
F Kennedy said, “in Chinese, the demonstrated the importance
word ‘crisis’ is composed of two of supplier relationships
characters—one represents danger during a crisis. In 1997, a fire
and one represents opportunity.” at the plant of one of Toyota’s
most trusted suppliers, Aisin
Handling a crisis Seiki, threatened to halt
In 1982, Johnson & Johnson reacted Toyota-group operations for
to a crisis effectively when Tylenol weeks. Aisin Seiki was the
pain-relief capsules sold in the sole source for a small but
Chicago, IL, area had been laced crucial part used in all Toyota
with cyanide. The company recalled vehicles. Only two or three
days’ worth of stock was on
the product, stopped advertising, and
hand. Toyota’s manufacturing
Tylenol was the top pain reliever reintroduced Tylenol in a triple-seal, plants shut down but were
in the US when it was hit by a crisis: tamper-resistant package. The
lethally contaminated capsules. Over public felt reassured by the move, reopened after only two days.
30 million bottles were recalled at huge and once again trusted the product. The recovery was achieved
cost, but consumer faith was retained. through an immediate and
At around the same time, another largely self-organized effort
US company tried to contain a by companies from within and
walkouts to fraud; sudden supplier similar crisis using a very different outside the Toyota group, who
loss or rising prices in raw materials; approach. A woman returned a jar set up alternative production
and environmental disasters. Every of Gerber Product’s baby food to sites. The collaborative effort
crisis has the potential to damage her local supermarket, saying that of more than 200 companies
a company’s profits and reputation. it contained a shard of glass. was orchestrated with limited
The extent to which it is able to Gerber ran laboratory tests and direct control from Toyota
withstand a crisis and limit the found nothing; the store had lost and with no haggling over
technical proprietary rights
damage is determined by its ability the shard, and the company
or financial compensation.
to respond fast and appropriately. decided there was no problem on
its production line. However,
Planning and decisions customers in 30 different states
Effective crisis management then said they too had found glass
involves careful planning, so that if in the baby food. The company
a crisis strikes it can be addressed could find no evidence to support
in a calm, professional way. This these claims, so announced that
involves quickly establishing the they were “being had” by people
Effective crisis management
“who, what, when, where, and how” wanting to file false liability claims.
is a never-ending process,
of the crisis within the critical first They did not recall any products.
few hours. Any crisis—no matter Public confidence in the company not an event with a
how small—is newsworthy, so a fell; some states demanded other beginning and an end.
company’s public response must Gerber products be removed from Ian Mitroff,
be fast. Public perception affects stores. Although the company’s Paul Shrivastava,
consumer trust. position was evidence-based, it Firdaus Udwadia
Leadership during a crisis is seemed callously indifferent to the
particularly important, since swift, welfare of babies. It lost sight of the
effective decision making is critical. essential rule in any crisis: always
Every company recognizes that if it show commitment to the safety and
handles a crisis well, damage can well-being of your consumers. ■