Wednesday October 12, 2016. An announcement reverberates through the AirBerlin flight from Berlin to Cologne: “Due to security concerns it is not permitted for the Samsung Galaxy Note 7 to be charged or used onboard.” Laughter erupts. The issue is much less funny from Samsung’s perspective though. And many people don’t realize that Samsung is not the only company to recall products over the years: Volkswagen, Aldi, IKEA, Opel, Apple, Recaro and BMW have also had the displeasure. Clearly things don’t always work out according to plan, even in global corporations, even among the market leaders. So how should companies communicate in crisis situations? And can these crises be seen as opportunities?
An (incomplete) list of companies that have issued recalls
Roller chairs and mirrors at the furniture discounter called ROLLER, fondue pans by Stöckli, electric hot water storage facilities by Kaldewei, battery hedge shearers by Stihl, chargers by Apple, Notebook cables by Acer, Senseo coffee pad machines by Philips, binoculars by Grundig and Loewe, washer-dryers by Siemens, tablet chargers by Nokia – this is just a sample of the list of companies that have had to initiate recalls.¹
The list is even longer than most consumers think. Screws had to changed in the seatbelt system of the Porsche 918 Spyder. In the Toyota Prius IV one of the parts had to be recalled because it triggered the parking brake. One of the pipes in the air conditioning in the Volvo s90 was not air tight, necessitating its recession back into the factor.² And in a head-on collision the Recaro child seat appeared to not only endanger the life of the child but also the driver and passengers, behooving the leadership to axe it.³
And that’s not even the end of the list: Aldi-Süd had to recall their “Desira dessert” because they could not exclude the possibility of artificial substances having made their way into the package due to a technical failure. 4 The furniture giant IKEA recalled 36 million wardrobes in the USA and Canada in June 2016.5 And Mars recalled chocolate bars in 55 countries because a piece of plastic was found in one chocolate bar.6 Ever heard of these recalls? Maybe all three or just one or two of the cases? Some companies are reticent in their crisis communication because they hope the fiasco won’t get much attention.
All three companies listed in the examples above carried out recalls. They did not try the naïve and even negligent approach I like to call the: “Maybe we won’t get caught!” approach. At the end of the day users users expect communication from producers that responsible, transparent and if necessary, announces the recall of faulty products.
The product differences and perceptions
Do you use a smartphone and do you allow it to update your apps automatically when you are connected to Wi-Fi? You don’t even realize when new versions are available or what changes have been made and which errors have been solved, right? This is a common practice in the software industry. Updates and patches offer new functions and bug fixes. This system is pleasant for the users and advantageous for producers too – it’s convenient for disseminating new software features and fixing bugs. Perhaps you might prefer to wait a few days if you don’t want to use automatic updates. Why should you install an update on the very first day of the update if you can get away with waiting a while? By delaying updates you have the opportunity to capitalize on the early feedback from external users who function as early testers for you or your company, allowing you to make short term improvements. Automatic updating of software will probably continue to work in the motor industry; when it comes to poorly mounted screws, flimsy brake parts or less than air-tight pipes the only solution is manual repairs. And this is where the difference in perceptions comes in: if an urgent problem that threatens people’s safety can only be solved manually then a recall is imperative. Everything else can be solved by means of an update.
Internal and external communication
So what would you need to pay attention to in your communication if you were ever actually forced to issue a recall? Some companies appoint a communication manager first, someone who will run all the communication with sales partners, user protection organizations, government departments and the press. On the one hand that makes sense on the other hand it could lead to a big opportunity being wasted. Staff members are ambassadors of the brand. As a company you obviously would like to avoid a situation in which 1,000 staff members tell 1,000 different stories based on guesses. Even if companies decide internally who the designated communication liaisons are for the external communication, that won’t stop staff members from sharing their opinions with their friends and families. These people will in turn tell more people. Before you know it opinions will be popping up all over the place, unfounded rumors that need to be corrected by the company later – at great expense and with a lot of effort. That’s why it makes more sense for companies to refrain from covering up the reasons for a recall – they should openly talk about the real causes – both internally and externally.
Instead companies should behave as follows:
- Figure out the root causes of problems as quickly and as thoroughly as possible
- Appoint internal and external communication managers
- Communicate transparently and openly with staff members and market participants
- Give people a time-line and in so doing offer orientation for staff members and market participants
- Publish well-founded information and avoid sanitizing the causes and consequences
- Do not speculate about reasons or assign blame
- Make sure that you continue to make high quality products.
And above all, never make excuses.
Wining trust through recalls
Winning trust at a time when products are becoming ever more similar is very difficult for many companies. If your support team offers fast and competent help it will be much easier for your clients to forgive possible errors. Clients tend to express trust in you even if things don’t always run smoothly. This trust can quickly be lost, which is why transparent behavior and open, honest communication are all the more important. Companies require crisis strategies for times like these because otherwise they will go through what Samsung is experiencing with the Galaxy Note 7. The press will speculate about self-righteous CEOs who refuse to listen to their staff. The American flight authority will forbid the use of the product in all flights. And the company will be accused of only testing batteries internally, which is particularly tragic when you know the actual story of what happened with Samsung. Among 400,000 devices sold, 35 were flagged as becoming warm or bursting into flame. Not very pleasant for 35 users but at the end of the day those users only represented 0,00875% of all devices. At that point there had been no explosion in an open room, a bus, a train or airplane. Never mind the fact that batteries belonging to other phone producers had been put in the phones without incident. But these arguments were no longer acknowledged at a certain point. Without a crisis strategy there can be no trust. The immediate losses can be established, but loss to their image is incalculable.
Of course organizations want to avoid mistakes that lead to recalls. Unfortunately this is not always possible. Mistakes happen – which is not a new piece of information. Companies should learn from their mistakes and endeavor to solve them in the long term. A recall should trigger a quality offensive in the company. Trust in the company is what is at stake. If companies can continue to produce good products and hold on to this trust they will continue to thrive. Crises can give rise to improved processes, higher quality standards and maybe even an open culture of communication. That is the opportunity that lies in recalls.
 The German site called Produktrueckrufe.de provides information about recalls, product warnings and security advisories: http://www.produktrueckrufe.de/ (German only)
 ADAC current recalls by the motor industry at: https://www.adac.de/infotestrat/reparatur-pflege-und-wartung/rueckrufe/ (German only)
 Stiftung Warentest: Recall recaro basic unit: https://www.test.de/Rueckruf-Recaro-Basiseinheit-Sicherheitsrisiko-durch-Sitz-Optia-5080664-5080666/ (German only)
 Aldi-Süd publishes information about their „Desira Grießdessert“: http://www.cleankids.de/2016/09/14/rueckruf-kunststoffteile-aldi-sued-informiert-ueber-rueckruf-von-desira-griessdessert/61709 (German only)
 Ikea recalls 36 million wardrobes in the USA and Canada: http://www.zeit.de/wirtschaft/unternehmen/2016-06/ikea-kommoden-rueckruf-usa-kanada (German only)
 Voluntary recall of chocolate by Mars Chocolate: http://www.mars.com/germany/de/press-center/press-list/news-releases.aspx?SiteId=70&Id=7010 (German only)