Soar Above, Rather Than Survive, a Product Recall Fitbit is the latest company that instituted a recall. Did it do it right? Also, seven steps to implement a recall program in your business.
By Patrick Proctor Edited by Dan Bova
Opinions expressed by Entrepreneur contributors are their own.
If you are in business long enough, you more than likely will be impacted by the harsh and at times unforgiving reality of a product recall.
Although there are standard steps for product recalls, it is often the company culture behind the decisions for initiating a recall that differentiates a progressive-minded company from one that does not have a clearly defined standard in place before a recall is required.
Most recalls range in cause from a serious imperfection in a product to a public health risk that requires returning a product to its manufacturer. At times a company will voluntarily call back a product, also referred to as a "voluntary withdraw," and other times the Food and Drug Administration (FDA), for example, will institute a mandatory recall.
Related: How to Avoid a Product Recall: Quality Control Essentials
An organization that nicely portrays how best to go about initiating a recall is Fitbit, which recently instituted a voluntary recall of its Fitbit Force after tests revealed it was causing allergic contact dermatitis. Since it was a voluntary recall, Fitbit was able to focus on both customer safety and retaining customer satisfaction and dedication to the brand as they implemented their recall process.
In contrast, there are companies who initiate recalls after their product has caused significant harm. Think back to Toyota's woes from 2009 to 2011. There was one mishap after another. First, it was the front driver's side floor mat jamming up against the driver's foot, the infamous sticking accelerator pedal and the Prius' anti-lock braking system. Just when Toyota believers thought it couldn't get any worse, it did, with the recall-related lawsuits and settlements that followed. Toyota now seems to be recovering, albeit slowly.
Notice the difference? One company acts after fail-safes have been ignored during the production process, leading to numerous recalls, while the other company voluntarily pulls their product after running their own tests and before customers at large demand such action. This is how a true customer service mindset can be built into a recall program.
In spite of your best efforts, things will go sideways from time to time and the leader's job, in a world that is never simple or predictable, is to build safety nets, so that when problems occur, they can be quickly reported and dealt with. This is where developing and maintaining an active recall program pays off. Here's how to start:
1. Plan ahead. This may seem obvious, but it's been reported that there are more than 2,500 product recalls in the United States each year and many companies are not prepared.
Related: The Toyota Effect: Unlikely Winners and Losers
2. Develop your team. After developing a policy that is thorough and intuitive, build and cultivate your team. Some team members will have specific duties and some will not. Regardless, make sure that everyone knows what their (and other team members') roles are.
3. Customer complaint file. Maintain an active customer complaint file and utilize it for the tool that it is. When you notice that there are recurring complaints in a certain area, follow up on them. The best recall experience is the one that is lighter and less intrusive when it hits due to active customer engagement leading up to it.
4. Communication. Any recall standard operating procedure (SOP) will also have built into it well-established communication channels. Without robust communication channels established, your recall program will fail.
5. Product and manufacturing traceability. Ideally your IT system will assist you with this endeavor. What you have produced, when and by whom (or where) are all keys to tracking your product. Traceability is important as it helps one separate the potentially damaged from the perfectly fine product, especially when one cannot tell the difference just by visual inspection.
6. Test, test and test again. Never stop testing your system. If/when a product recall hits your organization, your recall may not run its course perfectly. You will find blind spots in your system, but the more "mock recalls" there are, the better prepared your team will be to combat what is thrown at them.
7. Company culture. Earlier I noted that how and when to implement a product recall needs to be decided prior to an event occurring. Your company culture needs to be the driving force here -- when in doubt, recall a product. Although that may sound simple and obvious, it is quite a weighty task to announce and institute a recall. Your organization may be ridiculed, sales may be lost and your reputation may be damaged. Having said that, if doing what is ethical is decided on beforehand, the actual recall process is the only step left to make things right once more.
