GREG JAMES punched the by fjhuangjun


									                                                                                    HBR           CASE STUDY

                                            A celebrity's baby is severely injured when her stroller
                                                        tips over. Was it user error or a faulty product?

      When                                                                 The media go wild-and BestBaby
                                                                                                   faces a PR disaster.

          No News
                                                                                         by Bronwyn Fryer

                                                                                            Greg winced and clicked off the ra-

G     REG JAMES punched the
        button on the Lexus's stereo,
        scanning the stations for the
moming news story he didn't want
                                                         mains in critical condition,
                                                        and doctors are uncertain
                                                         whether sbe will recover
                                                  from injuries sustained when her
                                                                                         dio. It was all like a bad dream. Through-
                                                                                         out the previous evening, that horrible
                                                                                         911 recording-and Nelkin's threatened
to hear. Sure enough, 101.7 was in mid-    stroller rolled down the driveway of the      lawsuit-had been inescapable headline
broadcast, playing that scratchy, dra-     Nelkins' Laurel Canyon home."                 news. Greg sighed wearily as he eased
matic 911 recording. "Help! The baby!"        The broadcast continued as Greg            into the reserved parking spot. "It's ob-
a young woman shrieked. "She's-oh,         turned into the BestBaby parking lot.         vious that I'll make some kind of an-
she's hurt her head! She's bleeding all    "Caught by reporters this morning at          nouncement today," he said to himself
over! Oh, my God-it's not my fault!"       the hospital, Mr. Nelkin continued to         "But what should 1 say?"
   A fresh wave of nausea hit Greg as he   lay blame for the incident on the man-           Greg found jane Benson, the com-
forced himself to listen for an update     ufacturer of the stroller-BestBaby Cor-       pany's public relations manager, waiting
on the situation. "As we reported yes-     poration of Des Moines, Iowa-and im-          for him in the lobby. She wondered
terday evening, the injured child is       plied he will initiate legal action against   whether he'd heard about the recall de-
Avery Nelkin, the three-month-old          it. So far, the company has not com-          mands. She grabbed his elbow. "Greg,
daughter of Academy Award winners          mented. We will continue to update you        we've got a huge problem here," she said
Nick Nelkin and Celia Winston. She re-     throughout the day."                          in a low, tense voice. "My phone's been

APRIL 2001                                                                                                                      39
                                                                            When No News Is Good News - HBR CASE STUDY

ringing off the hook. CNN and ABC                Greg from a raft of brilliant candidates.        Keith had proven himself serious,
News have both left messages on my               After serving as vice president of sales      hardworking, and wholly dedicated,
voice mail. Their crews are on the way.          and marketing and later as COO, Greg          although his authoritarian, no-nonsense
They've asked for a statement from you.          found himself in the CEO spot when            manner occasionally rankled managers
I haven't returned any calls yet." She           Levison kicked himself upstairs to the        and employees, especially those who
paused briefly, gauging Greg's deepen-           chairmanship.                                 worked in the manufacturing facility.
ing frown. "And I-I've been checking                After 20 years at BestBaby, Greg had       Lisa Ronell, a popular, good-humored
the Web. Three sites are running head-           been overjoyed to take on the position.       woman who headed up human re-
lines calling us 'WorstBaby.' This mom-          He loved children; he and his wife had        sources, had fielded several complaints
ing, Consumerwatch posted something              three grandchildren. He felt like he'd        about Keith's apparent obliviousness to
on its Web page, asking users whether            trained his whole life to run a company       the shop-fltx>r and warehouse person-
they think we should recall the stroller.        that catered to little ones. Greg knew        nel. During a meeting with Greg early
It's already logged more than a hundred          the 1,200-employee company intimately         last year. Lisa mentioned that one em-
responses saying we should. People are           after having spent so many years run-         ployee in particular-outspoken Donna
swapping stories about accidents with            ning sales and operations. He felt that       Di Meola, who wore "Union: Yes!" but-
our strollers. We simply have to come up         BestBaby was really his baby: he took         tons-had complained that Keith rou-
with a response, and pronto."                    personal pride in the company's excel-        tinely ignored her when issues came up.
   "Call an all-hands emergency meet-            lent reputation as a manufacturer of             "Donna says that Keith doesn't really
ing"Greg responded."! want all execu-            cribs, car seats, strollers, and toys. Dis-   listen to her," Lisa had told Greg. "She
tive staff in the boardroom in an hour.          tributors and retailers were unflaggingly     says he's obviously preoccupied and cuts
We'll give everyone a full briefing. Don't       loyal and stockholders supportive. The        her off if she brings problems to his at-
worry" he said compassionately, scan-            ads, with their tag line "BestBaby- Best      tention. 1 suggested that if that's the
ning Jane's worried expression. "We'll           for Your Baby!," were familiar elements       case, she should write up her communi-
get this under control."                         in parenting magazines. Product re-           cations as memos and bring issues to his
                                                 views were generally good, and the            attention that way. And keep copies."
What Went Wrong?                                 media were friendly. Although overall         During Keith's last performance evalua-
                                                 sales had remained relatively flat during     tion, Greg had urged him to brush up on
"Everything's happening so fast," Greg
                                                 the past few years, the company had           his listening skills, without specifically
thought as the elevator doors closed.
                                                 been buoyed by strong sales from a re-        mentioning Donna's complaints.
"The Nelkin accident occurred yester-
                                                 cent line of collapsible jogging strollers
day evening. Now all these angry peo-                                                             Suddenly, Greg also remembered
                                                 introduced in i997 and regularly up-
ple are coming out of the woodwork                                                             Keith's saying that Arzep had recently
                                                 dated with trendy colors like raspberry,
with broken-stroller stories. Funny they                                                       switched suppliers, going with cheaper
                                                 blueberry, and tangerine.
didn't say anything before." He pursed                                                         materials in an effort to shave expenses
his lips. "I haven't even had time to               What about consumers? "We haven't          of its own. "Keith said that the new ma-
figure out what's happened, let alone            had more than the usual number of con-        terial isn't as sturdy as the previous
consider a recall. And now," he thought          sumer complaints, especially after we         brand, but he's never reported a dimin-
bitterly, "it looks like the Consumer            instituted that satisfaction guarantee        ishment in quality," Greg thought.
Product Safety Commission may make               andfive-yearwarranty a few years ago,"           He resumed his mental inventory of
that decision for me."                           Greg mused. Of course, the last few           corporate difficulties. "The only real mark
   Greg searched his memory. In the ten          years had also produced their share of        against us was that liability suit six years
years he'd spent running BestBaby, he            management challenges. There was that         ago, which we settled," he said to him-
had never confronted a bona fide PR              painful moment in November 1998               self. "After that, I hired Robert Howe
crisis. Indeed, as far as public relations       when Greg had had to order those cost-        as corporate counsel. Boy, Robert did a
was concerned, the company had always            cutting measures. He'd had to lay off         great job on that stroller case last year,
had a good track record. In 1975, the            dozens of part-time workers and offer         when he showed that our product didn't
company's cofounder and former CEO,              early retirement to more than a few full-     fait and that the nanny hadn't fastened
Simon Levison, had asked him to join             time ones. He'd worked closely then           the seat belt."
BestBaby as head of sales, handpicking           with the new COO, Keith Sigismund, to
                                                 streamline and consolidate BestBaby's         Point the Finger?
Bronwyn Fryer is a senior editor at HBR.         supply chain. Following the winnowing         As the crisis meeting convened, Jane
                                                 process, one particular supplier, Arzep       placed copies of the latest news clip-
 HBR's cases present common managerial           Enterprises, emerged as the chief pro-        pings before each place at the confer-
 dilemmas and offer concrete solutions
                                                 vider of materials, furnishing BestBaby       ence table. Lisa pulled Greg aside as the
                                                 with 80% of its plastic, rubber, and metal    senior managers found their seats.
from experts. As written, they are hypo-
                                                 parts; nylon cords; and other equipment.      "Greg, I've had several people call this
 thetical, and the natves used are fictitious.

APRIL 2001
HBR CASE STUDY • When No News Is Good News

morning, wanting to see me " she wor-       rolled down the driveway and fell on its      leaked outside the company, it will look
ried, "^\^fo managers in manufacturing      side, and the baby's head hit the con-        like a smoking gun." An uncomfortable
told me they want to quit. So does          crete." Jane paused."So she called 911-       silence fell over the room.
Donna."                                     that's the phone call ail the radio sta-         "Well, I definitely think we should
   Greg nodded, taking in the bad news.     tions keep playing. No one claims to          issue a press release saying that we are
"Lisa, do your best to keep people calm.    have seen the incident, but Nelkin in-        investigating this matter, but we have
Beg them not to quit. I'm planning on       sists that this accident is not Sophie's      to do more than that," said Jane finally.

                   "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"
making a speech to the company after        fault He says, quote, 'She's absolutely       "Greg, you're going to have to go on TV
our meeting. Please ask them to hang        trustworthy and responsible, and this in-     and give some kind of profuse and pub-
on at least until the end of the day. And   cident has traumatized her. It's clear that   lic apology to Nick Nelkin, Celia Win-
tell Donna I want to meet with her as       the brake on the stroller didn't work.'"      ston, and their family."
soon as possible."                             Keith sat through Jane's summary              "He should absolutely do no such
   "Sure, Greg, I'll try," Lisa responded   with a scow! on his face. When she was        thing," snapped the lawyer, Robert
grimly. "But this whole Nelkin thing        finished, he stood up and pulled what         Howe. He stared hard at Jane, who
has really upset her. The only person       looked like a copy of a memo from his         shifted uncomfortably."No one saw the
around here who can do any persuad-         leather notebook. "I don't remember           accident, and this very well could have
ing is you."                                reading this at the time it was written,      been the teenager's fault. An apology
   Lips tight, Greg moved to his place at   and 1 couldn't find it in any file, but       will look like an admission of guilt."
the head of the conference table and        Donna handed this to me this morn-               Keith spoke up. "We have a great
cleared his throat. "Good morning. First    ing," he said grimly. "She's that union       product and an airtight reason for pur-
things first: there's been no update on     organizer in machining who likes to           suing Arzep. But in cases like this," he
the condition of Avery Nelkin," Greg        send me alarming memos on a weekly            added with audible bitterness, "the pub-
announced to the group. "I know you         basis. I usually look into them, but so       lic has already determined our com-
share my concern about this child. Of       far they haven't unearthed any serious        pany's guilt because of the celebrity of
course, we all know we make a great         problems.                                     the victim."
product, but we're facing a real public        "Anyway, Donna told me this mom-              Jane insisted that the company's
relations crisis here. We have not yet      ing that she keeps copies of all her          chief concern at this moment was how
answered calls ft-om the media, but I       memos. This one is dated January 15,          to spin the story."The public's memory
agree with Jane that we should make         2000." Keith cleared his throat and           is short," she said. "Is there any way we
some kind of announcement, and soon.        read aloud: "New Arzep brake fittings         can undertake a totally separate PR
So before we leave this room, we need       don't grab the front wheels as easily as      campaign in a few months, to clean up
to have a complete disclosure of every-     previous ones. If the brakes actually fail,   the company's image? There may be an
thing we know about this issue," Greg       a child in the stroller could be hurt."       opportunity in this, depending on how
waved his pile of clippings,"and a plan        Everyone in the conference room            we handle it. Maybe if we do some pro
of action. Jane, you start byfillingus in   gasped in unison. Simon Levison was           bono work and get the word out, in six
on the news reports."                       visibly angry. He pounded his fist on         months we'll look like Mother Teresa."
   Jane stood up. "Well, I'm assuming       the table. "Well, if that's true, then this      "Well, one thing is certain,"said Greg.
you all watched the news last night."       is absolutely not our fault!" he fumed.       "This negative publicity is highly dam-
She looked around the table, and sev-       "The problem is with Arzep's brake fit-       aging and needs to be nipped in the
eral heads nodded. "Nelkin told re-         tings, not our manufacturing. We can't        bud. We have to be very careful in com-
porters that his 14-year-old daughter,      be held responsible. I think we should        municating with everyone-our own
Sophie, was taking the baby out for a       put out a press release saying that we        employees, the news media, the public,
late-afternoon jog. Sophie claimed to       are looking into problems at Arzep."          and the Neikin family." He searched the
have set the brake on the stroller while       Greg shook his head. "Simon, any           faces at the table.
it was in the driveway. Then she went       kind of denial of the charges will cer-                          continued on page 44
back to the house to lock the door, but     tainly make things look worse. Besides,"
while she was doing that, the stroller      he pointed out, "if this memo has been

42                                                                                                       HARVARD BUSINESS REVIEW
HBR CASE STUDY - When No News Is Good News

          How can BestBaby bring its PR crisis under control?
                                           Four commentators offer their advice.

                                                          "Although it's possible that the
                                                           incident involving the Nelkin baby
                                                           was truly an accident, Greg has
                                                           to assume that it wasn't"
                                                           fohn 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
                                                           dieselfuel into the Monongahela and Ohio Rivers.

As a former CEO who went through a similarly harrowing experience,                         clusions of the investigation will be
I can certainly sympathize with Greg James. Like him, I received a lot of con-             made public upon its completion. The
flicting advice from different people vwithin my organization, yet I had to                investigation should include an evalua-
make the right decision for everyone, both inside and outside the company.                 tion of materials provided by all com-
And like Greg, I had to deal with some very unpleasant facts about which                   ponent suppliers. This is particularly
                                                                                           important since BestBaby had made
I was previously unaware. In the case of Ashland's 1988 oil spill, I learned
                                                                                           changes to its supply chain and since
to my horror that the storage tank that had collapsed was not a new model
                                                                                           the change to new materials had been
but a "recycled" one. To make matters worse, the engineers who had re-                     questioned by at least one employee.
constructed the used tank had failed to pay sufficient attention to standard               Once the study is complete, BestBaby
industry procedures.                                                                       should make it available to the baby
                                                                                           stroller industry at large so that all com-
   Although it's possible that the inci-       apologize to the Nelkin family for any      panies involved in the manufacture of
dent involving the Nelkin baby was             deficiency that may have existed in the     strollers might benefit from it. Finally,
truly an accident, Greg has to assume          stroller. He should offer the family his    Greg should pledge full cooperation
that it wasn't, because that is the pub-       and the company's best wishes for their     with all interested parties, including
lic's perception. Nor is it constructive to    daughter's speedy and complete recov-       govemment agencies, the media, and
lay blame on anyone. Only by holding           ery. And he should announce a series of     the company's customers and suppliers.
his company fully responsible can Greg         decisive actions. He should say that, as       During this press conference and sub-
ultimately restore the public's faith in       a first order of business, BestBaby will    sequent statements, Greg should em-
BestBaby.                                      immediately recall ail strollers of this    phasize BestBaby's long history as a sup-
   In Ashland's case, we reclaimed our         type for investigation and possible mod-    plier of products for children and the
good name as a corporate citizen by act-       ification of the brakes.                    company's reputation for superior prod-
ing quickly and decisively to disclose all                                                 uct quality. He should clearly state his
                                                  Second, Greg should openly state all
the facts, engage an outside investigator,                                                 determination tofindthe exact cause of
                                               the facts-including the change of sup-
and pay whatever price was necessary to                                                    the problem and to modify the stroller
                                               pliers and the warning memo from an
clean up the mess. The price we paid for                                                   to be certain that a similar incident will
                                               employee - because leaving them for a
the cleanup was, in the end, money well                                                    never occur. Andfinally,of course, Best-
                                               reporter to discover later will be ex-
spent. As a result of our aggressive ac-                                                   Baby must deliver on all of Greg's prom-
                                               tremely damaging. In addition, he must
tions, the press articles following the ter-                                               ises, down to the finest detail. By doing
                                               say that the company is appointing a
rible incident were largely positive.                                                      all these things, it is entirely possible for
                                               reputable, independent outside investi-
                                                                                           Greg's company to emerge stronger and
   Greg should call a news conference          gator to conduct a full review of the ac-
as rapidly as possible. In it, he should       cident; he must promise that the con-

44                                                                                                         HARVARD BUSINESS REVIEW
                                                                         When No News Is Good News • HBR CASE STUDY

                                                           7/7 the emotionally volatile court
                                                           ofpublic opinion, a baby's injuries
                                                            are the only admissible evidence,
                                                            and there is no defense."
                                                            Ian Mitroffls 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 consultingfirm in Manhattan Beach,
                                                            California, His latest book is Managing Crises Before
                                                            They Happen (Amacom, 2000) with Gus Anagnos.

This is not just a public relations crisis; it's a management crisis. The                   ogy to the Nelkins and anyone else
earlier lawsuits and the memos from Donna signaled the existence of on-                     whose children have been injured by
going problems at the company. The fact that that Greg, Keith, and other                    BestBaby products, and he must offer to
executives ignored or minimized these early warning signs shows just how                    pay all their medical expenses. He must
                                                                                            truthfully lay out all the facts as be un-
short-sighted BestBaby is. Had an effective crisis-management team been
                                                                                            derstands them. Greg keeps an upper
in place to pay attention to these signs, the current situation might have                  hand only by airing the facts on his
been avoided.                                                                               terms; he can be sure that, if they haven't
   Urtfortunately, the question of liabil-    ity for the Nelkin accident and ail others    already, the media will find out about
ity is already moot. Even if Robert, the      involving its products.                       Donna's memo. He must also lay out an
attorney, were able to prove in a court of       Greg's first task must be to find out      aggressive plan of action, detailing how
law that BestBaby isn't at fault, he's al-    the awful truth about unreported and          and when his company will fix organi-
ready lost the bigger, much more im-          unheeded product and supply problems          zational and operational problems. He
portant case, ln the emotionally volatile     before the media do. He should imme-          should introduce the members of his
court of public opinion, a baby's injuries    diately hire an independent investigator      new crisis-management team. And he
are the only admissible evidence, and         to interview Donna and other employ-          must schedule another press conference
there is no defense. Any attempt to de-       ees privately and confidentially. The in-     in three days to update the public.
flect responsibility-as we have seen so       vestigator will have to unearth the his-         In the following months and years,
clearly in the recent Ford and Firestone      tory of any problems and report all           BestBaby will have to repair its public
debacle-will only sink BestBaby more          findings directly to Greg on a daily basis.   image by consistently demonstrating to
deeply imo the quagmire. Nor should           Greg will also want to hire a crisis man-     the media and the public how the com-
Greg blame anyone within the com-             agement expert who will be charged            pany has redefined itself. Executive
pany. Rather, he will need to ask himself:    with setting up and training a perma-         management should review all com-
what illness existed within our corpo-        nent, internal crisis-management team         pany business practices and key as-
rate structure that allowed this to hap-      comprising people from the operations,        sumptions and reject or revise those
pen? To treat the illness, BestBaby will      marketing, IT, security, and legal de-        that have brought BestBaby to this pass.
have to swallow bitter medicine.              partments. The team will need to meet         The company should open its facili-
   Besides bracing for a class action suit,   regularly with employees and report on        ties to inspection, showing how it has
Greg must now face the hard fact that         and address issues on a monthly basis.        changed its operations for the better.
he has only one real choice. He can pay       Greg should definitely consider assign-       Greg and his staff will need to think out-
once now for his company's mistakes or        ing Donna to the team.                        side the business-as-usual box and iden-
pay for them later on an ongoing basis.         At the press conference, Greg will          tify with children and parents. They will
If he pays now, he has a much stronger        have to cross his personal Rubicon. He        have to make amends through some
chance of controlling the damage and          will have to look right into the cameras      highly visible, charitable acts to prove
reviving the company's public image.          and say, "We violated the trust of con-       that BestBaby can rise to an ethical stan-
Therefore, like it or not, BestBaby must      sumers." He must be absolutely sincere        dard far beyond that ofthe bottom line.
assume complete and total responsibil-        and contrite. He must make a frank apol-                          continued on page 48

APRIL   2001                                                                                                                        45
HBR CASE STUDY • When No News Is Good News

                                                             "The faster the story is out, the
                                                              more quickly it can be contained
                                                              and the moreforgiving the public
                                                              is willing to be,"
                                                              Robin Cohn is a New York-based crisis-management
                                                              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.

Greg and jane are correct in wanting to get out a media statement,                           jogging strollers and stress that it will
but they have waited too long already. In the early stages of a crisis, the                  work with the Consumer Product Safety
faster the story is out, the more quickly it can be contained and the more                   Commission. Finally, he should intro-
forgiving the public is willing to be. The crisis meeting should have been                   duce Jane Benson as the future spokes-
called as soon as the company heard about the accident, and Greg should                      person. It will be Jane's unenviable job
                                                                                             to make absolutely sure that the pub-
have issued a statement that same evening.
                                                                                             lic stays apprised of the results of the
   The minute this meeting is over, Greg      leasing them to the media." Greg should        investigation.
should personally call the Nelkin family.     also tell the staff that Donna tried to           Greg should open up the floor to the
He should offer to meet with them pri-        alert management about the problem             tough questions that reporters will ask
vately and to provide whatever assis-         and that he has apologized to her.             and address each one as candidly as he
tance possible, including paying the             Greg's statement to the media will          can. If, for example, someone mentions
medical bills. Such a meeting should not      have to accomplish several simultaneous        the employee memo, Greg will have to
be publicized. Then Greg should issue a       objectives. It's important to stress his       admit its oversight and emphasize that
voluntary recall before the U.S. Con-         company's concern for its customers and        the company is investigating the matter.
sumer Product Safety Commission asks          to show that it has nothing to hide. He        If questions arise about the brakes, he
for one. He should require the com-           should not assign blame. The public does       should not yet mention Arzep's name
pany's distributors to stop selling Jog-      not care about what's legally acceptable.      since the cause of the accident, although
ging strollers until further notice. He and   It cares only about what's morally ac-         suspected, has not been determined.
Keith should also apologize to Donna.         ceptable, which is that BestBaby is re-           Unfortunately, even the most deftly
   With these orders of business out of       sponsible for the safety of its products. If   conducted press conferences are not
the way, Greg should address the em-          the company appears to deny responsi-          enough to begin rebuilding customer
ployees. His statement can serve as a re-     bility, respond too slowly, cover up, or       loyalty. This can only be accomplished
hearsal for the public one. He should         put its own interestsfirst,the public will     one consumer at a time. BestBaby will
say something like: "I know all of you        lash out-and damage to BestBaby's rep-         have to surpass public expectations.
are shocked by the Nelkin baby acci-          utation could be irreparable.                  Greg should ask himself: "If I owned a
dent. We've always prided ourselves on           Asidefromexpressing sincere concern         jogging stroller like this, what's the most
making the best equipment, yet some-          for the Nelkin baby and other children         fair and generous thing BestBaby could
thing here went terribly wrong, and we        injured in stroller accidents, Greg will       do for me?" The company might, for
have to fix it immediately. I am about        have to state all the facts as he knows        example, replace the recalled strollers
to hold a press conference. On behalf of      them. He won't have complete informa-          with top-of-the-line models. Certainly,
all of us, I will apologize to the Nelkin     tion at the time of the press conference,      such replacements would come at a
family as well as to our other customers.     so he should say that the company is           substantial cost. But a response like this
I will announce a product recall; I will      working to determine the cause of the          would go a long way toward heading
also stress that we are developing new        accident and to fix it and that BestBaby       off public anger-and, in the end, cost
quality-control procedures to see that        will continue to provide information as        far less than the price the company
this never happens again. We will be dis-     it becomes available. He should add that       would pay for belated action or addi-
cussing these steps with you before re-       the company is voluntarily recalling its       tional inaction.

48                                                                                                           HARVARD BUSINESS REVIEW
                                                                           When No News ts Good News • HBR CASE STUDY

                                                            To avoid the commission staff's
                                                            making a preliminary determination
                                                            of hazard, BestBaby must initiate its
                                                            recall within 20 working days."
                                                            Alan H. Schoem is the director of the Office of
                                                            Compliance of the U.S. Consumer Product Safety
                                                            Commission in Washington, DC.

BestBaby is in trouble, but its situation is not hopeless. The most ef-                          Once tbe remedy is agreed upon, Best-
fective way for the company to address its defective brake problem and re-                    Baby must work witb tbe CPSC to figure
store consumer confidence in its name is to work cooperatively with the U.S.                  out the most effective ways to notify
Consumer Product Safety Commission (CPSC; to recall its                         consumers of its efforts to remove the
jogging strollers. If the company acts quickly in mounting a recall, it can                   dangerous strollers from the market-
                                                                                              place. The company can also use this
demonstrate its commitment to its customers and to product safety.
                                                                                              public notice to alleviate some of tbe
   In this unfortunate event, BestBaby        tbe CPSC and offers to conduct a recall.        negative publicity surrounding its prod-
even has a role model. On October 4.          In exchange for this cooperation, tbe           uct and tbe accident involving baby
1982, Johnson & Johnson announced             CPSC foregoes conducting a detailed             Nelkin. Greg might also wish to partici-
a nationwide recall of 31 million bottles     evaluation of tbe product and making            pate in the CPSC's press conference an-
of Tylenol after seven people died from       a preliminary determination tbat tbe            nouncing tbis recall and to issue a joint
taking cyanide-laced Extra Strength           item possesses a defect and is a substan-       press release with the CPSC. Because of
Tylenol capsules. It was one of the most      tial product hazard.                            the very real tisk of setious injury and
prominent product recalls in the United          The company has a lot to do in a very        deatb as well as the negative publicity
States, and the company's aggressive ac-      short time. To avoid tbe commission             surrounding the company, BestBaby also
tion went a long way toward restoring         staff's making a preliminary determina-         would do well to announce the recall in
trust in its brand. In the end, Tylenol       tion of hazard, BestBaby must initiate          paid advertisements. Wbile the CPSC
more than survived; Johnson & Johnson         its recall witbin 20 working days. Issuing      does not allow ads announcing a recall
also raised the standard for consumer         a recall requires more than simply send-        to be marketing tools, the agency would
product packaging.                            ing out a press release; for the recall to be   allow language expressing the com-
   Greg and BestBaby will have to accept      effective and acceptable to tbe CPSC, it        pany's commitment to its customers.
the fact that tbey are likely to be sued by   must follow the specifications of the Fast      BestBaby must also post the recall notice
Nelkin and others. The company should         Track program. Thus, before tbe official        prominently on its Web site and place re-
not allow that likelibood to interfere        recall can begin, BestBaby must first           call posters in retail stores that sold the
with its recall. Its goal should be to pre-   work with the CPSC to determine tbe             strollers and in pediatricians'offices.
vent other injuries or potential deaths.      scope of the recall by pinpointing exactly         In the CPSC's experience, companies
And it would serve BestBaby no useful         when Arzep changed the brake compo-             that are up-front with their customers-
purpose to blame its supplier for the         nents; perbaps tbe recall can be limited        and that act quickly to prevent further
problem. In the public's mind, BestBaby       to tbose strollers with inferior brakes.        injuries-can maintain or regain the loy-
is responsible since it manufactures tbe      Second, BestBaby must determine the             alty and admiration of the public.
strollers. Legal action against Arzep can     remedy it will make available to cus-
always be pursued later.                      tomers. Repairing and eliminating tbe           The commenls by Mr. Schoem were made in his of-
                                                                                              fielat capacity and are in the public domain; they do
   BestBaby should immediately contact        brake problem would likely be the least         not necessarily reflect the position of the CPSC.
tbe CPSC's Office of Compliance and ask       expensive option. If a repair is not im-
                                              mediately available, tbe company could          Reprint R0104A
for belp in conducting a recall under our
                                              offer a refund of the purchase price or         To order reprints, see the last page
Fast Track Product Recall Program. Un-                                                        of Executive Summaries.
der it, a company reports its problem to      a replacement stroller.

AI'KIL   2001                                                                                                                                 49

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