Crisis lessons from Mattel

The thought of little children putting lead-tainted Polly Pocket, Barbie, “Cars” and Batman toys in their mouths is frightening and disturbing. This week’s recall of 19 million Mattel toys sent from China – on the heels of its earlier toy recall – illustrates how a crisis can hit fast and hard.

 

Mattel has been in this situation many times before. They have a 100-page crisis plan and a well-oiled crisis response infrastructure tested from 28 recalls since 2000. Mattel speaks with one voice, communicates consistently through a crisis, acts swiftly, is remorseful and manages expectations. These are all tenets of effective crisis preparation and response.

 

Yesterday, for example, Mattel Chairman and CEO Robert A. Eckert said “there’s no guarantee that we will not be here again.” Also yesterday, the company launched an ad campaign to reassure consumers of its commitment to product safety. Mattel has been investigating all its toy manufacturing processes since early July.

 

Mattel has earned praise and respect from consumers and retailers because of the way it has handled these situations. This reminds us that even the best companies, with long-standing commitments to product quality and safety, still face crises.

 

So here’s the scarier thought: what about all the consumer, B2B and tech companies who don’t have their crisis “act” together as well as Mattel? Listen to Professor Prakash Sethi of Baruch College: “If Mattel, with all of its emphasis on quality and testing, found such a widespread problem, what do you think is happening in the rest of the toy industry, in the apparel industry and even in the low-end electronics industry?”

 

Frightening indeed.

 

This crisis is not a Mattel issue, of course, it’s also a China issue. The New York Times said “In the long run, they (Mattel) are trying to shift more of their toy production into factories they own and operate - and away from Chinese contractors and sub-contractors.” As people become more and more concerned about the products made in low-cost Chinese factories, a serious reputational and economic crisis has emerged for the fastest growing economy in the world. How will they react?

 

The lesson to remember is this: when a crisis hits, transparency is the sacred tenet. Listen to Mattel’s Eckert: “I thought it was important for us to be transparent, to provide information openly and quickly. The alternative is to stick your head in the sand and hope it goes away. And it doesn’t.”