Crisis

Management
 Crisis Management Basics
• “No comment” fuels hostility
• Always try to be helpful
• Be aware of deadlines
• Befriend journalists before the crisis hits
 Crisis Management Tips
• Appoint a spokesperson who is personable
and credible
• Set up a central place where media and the
public can get info
• Keep the information coming
• Be accessible and return all calls
• Be honest
Example of Crisis Management

Odwalla
 Case Study
• Odwalla juice e-coli outbreak in 1996
– Health officials in Washington state informed the company
that they had discovered a link between several cases of E.
coli 0157:H7 and Odwalla fresh apple juice.
 Case Study
• One child died and more than 60 people in the
Western United States and Canada became
sick after drinking the juice.
• Sales plummeted by 90%, Odwalla's stock
price fell 34%.
• Customers filed more than 20 personal-injury
lawsuits and the company looked as though it
could well be destroyed.
 What did the company do?
• Odwalla acted immediately.
• Although at the point where they were first notified the
link was uncertain, Odwalla's CEO Stephen Williamson
ordered a complete recall of all products containing
apple or carrot juice.
– This recall covered around 4,600 retail outlets in 7 states.
• Internal task teams were formed and mobilized, and the
recall - costing around $6.5m was completed within 48
hours.
 Taking Responsibility
• On all media interviews, the CEO expressed
sympathy and regret for all those affected and
immediately promised that the company
would pay all medical costs.
• This, allied to the prompt and comprehensive
recall, went a long way towards satisfying
customers that the company was doing all it
could.
 Internal communications
• The CEO conducted regular company-wide
conference calls on a daily basis, giving
employees the chance to ask questions and
get the latest information.
• This approach proved so popular that the
practice of quarterly calls survived the crisis.
 External communications
• Within 24 hours, the company had an
explanatory Web site (its first) that received
20,000 hits in 48 hours.
• The company spoke to the press, appeared on
TV and carried out direct advertising with the
Web site address.
• All possible attempts were made to provide
up to the minute, accurate information.
 Fixing the Problem
• The next step was to tackle the problem of
contamination.
• The company switched from unpasteurised
juice to a process called "flash pasteurization"
which would guarantee that E-coli had been
destroyed without compromising flavor.
 Fixing the Problem
• Within months of the outbreak, the company
had in place what some experts described as
"the most comprehensive quality control and
safety system in the fresh juice industry."
• On December 5, the company brought back its
apple juice.
• The new process was communicated in all
advertising and public outreach campaigns
 Cost and benefit
• Odwalla made a rapid recovery.
• Much of the good will and trust it had built up
over the years remained.
• Sales picked up again quite quickly.
 Cost and benefit

• The company did pay a large cost. Odwalla

pleaded guilty to criminal charges of selling
tainted apple juice and was fined $1.5m - the
largest ever assessed in a food industry case
by the US Food and Drug Administration.
THANK YOU