|Alexa Miller and Bob Josephson co-authored this article.|
No company wants to introduce a product to the market that might later be recalled, but being prepared for that exact scenario is essential in the course of protecting an organization's reputation. Product recalls are a unique type of incident, one that combines regulatory oversight, legal liability, operational challenges and reputational threats.
A product can be recalled for a variety of reasons, and with many regulatory players involved, product recalls can get messy. In the United States alone, the Food and Drug Administration, Centers for Disease Control and Prevention, Department of Agriculture and Department of Health and Human Services all oversee the recall of food products, which is the most commonly recalled category of goods.
While some product recalls may go virtually unnoticed, others can garner significant attention depending on the product itself, the industry, the company and even the placement in the supply chain.
In most situations, companies should adhere to a few key principles, including maintaining credibility with the regulatory body overseeing the recall, ensuring there are established compliance and monitoring programs in place, focusing on consumers' safety and ensuring they have the relevant information and coordinating with supply chain partners.
|This article is featured in O'Dwyer's Jan. '22 Crisis Communications & PR Buyer's Guide Magazine
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When there's a framework for responding to product recalls and alignment around key objectives, companies can mitigate potential reputational damage, maintain relations with key stakeholders and ensure the continuity of business operations. At times, some companies may be able to use the recall as a transformative moment to showcase their commitment to health and safety by going above and beyond what's legally required.
Industry and expectations
The steps a company must take as a result of a recall are largely dependent on the industry of that product. Generally, recalls in heavily regulated industries require more action and planning to understand the complexity behind particular communications considerations and decision-making needs. This is especially true in certain industries such as healthcare, manufacturing and transportation, as product deficiencies can be extremely dangerous and even deadly. That's precisely why certain recalls require sophisticated communications strategies, especially when a recall has the potential to escalate to a crisis.
The pace and nature of oversight vary by industry as well as by the regulatory body responsible for the product. In the event of a healthcare- or medical-related product recall, a company would work with the FDA to determine next steps. Similarly, if an airbag manufacturing device was found to be defective, the company would work with the corresponding agency that handles recalls in the automotive industry, the National Highway Traffic Safety Administration. In terms of the immediacy of these regulators' actions, they must consider efficacy versus safety when determining if a product must be recalled.
Many recalls are voluntary, while others are not. The nature of product recalls is also affected by the scale of the recall—and that can often be driven by the scope of the impact, whether that be domestic or international. For the latter scenario, in particular, a company's communications strategy must include how to coordinate across geographies and agencies overseeing the product recall, as well as with applicable law enforcement globally. For instance, in terms of the FDA, there's a law enforcement team that oversees companies producing FDA-regulated products to ensure they are complying with the agency's standards. The Office of Regulatory Affairs directs this team and seeks civil remedies against product safety violations, acting as the FDA's principal regulatory function. Additionally, the Office of Criminal Investigations is responsible for conducting all criminal investigations related to recalls, providing the FDA with a criminal enforcement function.
Place in the supply chain
Product recalls don't happen in a vacuum. Depending on the product's placement in the supply chain, the disruption can have a cascading effect, creating tension that threatens more than one business. Whether your organization provides the raw materials to other partner companies or delivers products directly to consumers, the further upstream in a supply chain you are, the more likely a ripple effect could damage business relationships and escalate the scope and visibility of a product recall. Unfortunately, no company is immune from these threats as the issue can be with a supplier or vendor, potentially impacting your product or business. Where your product stands in the supply chain is not only a consideration from a legal perspective but should also influence your communications strategy, meaning whether you should be proactive versus reactive or even involved in the narrative at all. Importantly, in all situations, companies must prioritize business-to-business relationships and manage partnerships through transparent and meaningful communications, as clearly explaining the situation and taking accountability go a long way.
Visibility and impact
There are a number of factors that influence why a product recall generates significant media attention or none at all. The type of product, industry and end-consumer are just a few contributing factors to the anecdotal impact of a recall. The communications strategy must take into account who will likely talk about the product recall, what stakeholders are involved or impacted and where this is likely to draw a reaction. Is there a potential for social media chatter as a result of compelling audiovisual content? Stories with people-first impact are especially likely to garner attention, such as an airbag issue resulting in severe injuries or a toy causing young children to choke. Ultimately, it's essential to consider who the audience is and how that shapes what you say and to whom.
Having the right communications strategies in place can help mitigate potential reputational repercussions with regulators, the media, consumers and other important stakeholders. In many scenarios, this may entail responding to questions regarding the recall swiftly or even proactively, as well as opening lines of communications to own the narrative and lessen the risk of negative coverage or reputationally damaging backlash.
Regardless of the specific situation, leveraging an effective communications strategy to manage a product recall is always beneficial to protecting business continuity and reputation, especially when a recall turns into a crisis. When considering overarching communications goals, communications should be fact-based and aligned with the broader legal strategy. Most importantly, communications should reflect what the company is hoping to achieve in the future and how it will learn from this incident to do better, no matter what that looks like.
Alexa Miller is a Consultant, Crisis & Litigation Communications at FTI Consulting. Bob Josephson is Managing Director, Crisis & Litigation Communications, at FTI Consulting.
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