Indians are known to be unenthusiastic consumers of pure insurance – the sort that only pays out if you’re actually sick. Something in us baulks at paying up good money year after year with nothing to show in return, assuming you stay healthy. Crisis preparedness is very similar – you have to prepare your crisis management plan, train your people and invest in a strategy – knowing fully well that you may never need it.
Most advice on crisis management, in my view, talks about reacting and managing the crisis rather preventing the crisis from happening in the first place. But just as you would invest in preventive healthcare – vaccinations, a fitness routine, a diet and such, you need to have a strategy to prevent the obvious causes of a crisis.
Both aspects of crisis management – prevention and reaction – were lacking in the recent Maggi episode which has left fans across India hungry and craving their favourite food.
What can you do to avoid a crisis?
- Have a Risk Dashboard
Track all the variables that could cause a crisis for your brand. Typical flashpoints are (a) quality testing failures (b) product failure (c) environment (d) personnel relations (e) government relations
Given the experience of Coke, Pepsi and Cadbury’s earlier these should be obvious choices for any FMCG. It is extremely rare that a crisis boils up without any prior symptoms.
2. Proactive Influencer Relations
Any large organization in India has to deal with regulation, legislation and the government at multiple levels, along with regulatory bodies. This is in addition to influencers in the media, social media, industry leaders, champion end-users. I find it difficult to believe that relations soured to the extent of the government filing an unprecedented $99million class action suit against Nestle without any prior history.
If you can’t avoid the crisis what are the ways to handle it?
1. Accept the allegations
Accept that there may be an issue. To ensure transparency insist that your personnel or a respected third party also get involved with the testing/investigation. Get a panel of customers and media people involved in supervising the investigation. All of this will (a) make it impossible to game the testing process (b) show that you are open to admitting fault if there is one
2. Show that you believe in your product
You have to be seen vigorously advocating your product in every forum. If there is doubt about the product manufactured in one area, import it if necessary to show that in general it is fine. Your senior management must be seen on channels consuming the product and showing their faith in it. In the case of Maggi, on the other hand, there were news reports that consumption in their own canteens had fallen.
3. Business Continuity Program
If there is the slightest risk of harming the consumer, you must voluntarily withdraw or replace the product. And it is important to do this before you are forced to do so, whatever you may believe. Nestle is not a stranger to voluntary recalls and should have immediately invoked a stop-sale while investigations took place. Banks and technology firms have contingency plans in place to ensure business continuity if a particular deliver site or centre is impacted. It would be wise for other firms to also have similar plans in place. For example, Nestle could have procured stocks from another country.
