Size is no protection against reputation risk

It’s easy to imagine that it’s mainly big companies, big brands and high-profile celebrities who are vulnerable to reputation damage. But a small New Zealand company has shown that every organization, no matter what size, can be at risk from public issues. It also showed how not to respond when trapped in the glare of publicity. 

The problem began when staff working in mobile dental clinics in Canterbury began to complain about an acrid smell inside the vans, and reported headaches, nausea, itchy eyes, runny noses, aggravated asthma and skin irritation.

After angry staff told their union that complaints had been fobbed off, new tests found high levels of formaldehyde, apparently from construction materials.   Although authorities declared the risk was “very low” for staff and “negligible” for children who visited the clinics, local health boards throughout New Zealand took the vans out of service for further testing, and the media ran hot with headlines such as “Dental toxic scare spreads” and “Dental vans in Formaldehyde scare.”

These news stories consistently named the manufacturer, a Hamilton-based company called Action Motor Bodies, which makes specialist vehicles including 108 mobile dental clinics in use across the country.  What was their response as reported in the media?  “A company representative said the chief executive was in Australia and could not be reached.” Hardly helpful. And on the company’s website and Facebook page? Not a word.

Action Motor Bodies was right to leave third party experts to address the technical health risk. However that doesn’t mean staying totally silent. What’s in play here is the reputation of a company which says “Specialist vehicle engineering solutions are our business.”  

Effective communication is clearly not their business. With its vehicles taken off the road because of health claims, the manufacturer needed to make some sort of public statement, even if only to express concern and empathy and to publicly commit to working with authorities. After all, some of their other customers have bought ambulances to transport really sick people. 

While it might seem a minor case, there are some real lessons for issue and crisis managers everywhere

•    Being a small target is little protection against reputation risk

•    Third party expert comment is vitally important

•    Affected people weren’t just angry about the fumes, but that they were “treated with disdain” which led to a “real loss of trust”

•    Making yourself “unavailable” is seldom a smart idea. There’s nearly always something constructive to say

•    Don’t ignore stakeholders. Think about impact on your other customers and potential buyers

•    Perceived risk is just as real, just as measurable and just as dangerous to reputation as risk based on scientific data

 

Advertisements

About managingoutcomes

Issue and crisis management expert
This entry was posted in Crisis management, Reputation risk and tagged , , , , , . Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s