* We’re foregoing any puns this month with the serious topic.
Nestlé and Danone are facing scrutiny following widespread recalls of infant formula products due to the presence of cereulide, a toxin that can cause vomiting and diarrhea and poses particular risks for infants. There have been 144 suspected and confirmed cases reported across ten countries, prompting investigations, regulatory attention, and growing concern among stakeholders. Investors are disappointed in the lack of transparency and clarity, but consumers will likely be the most difficult group to win back.
From a crisis management perspective, this raises an important question: What happens when you lose the trust of your most important stakeholder?
Parents place an enormous amount of trust in formula manufacturers, and when that trust is disrupted, it is rarely confined to one stakeholder group. Investors, regulators, employees, and the media begin paying closer attention. The reaction of every stakeholder group is influenced by how the organization responds to the people most directly affected.
The question is not how to regain trust after a crisis, but how to prepare before a situation unfolds.
The formula is simple: Know your stakeholders.
Organizations should be able to identify their stakeholders, understand what each group values, and know where each group looks for information before a problem occurs. Rather than waiting to address stakeholders once a crisis is already unfolding, focus on building trust from the beginning. After all, trust is much easier to maintain than to rebuild after the damage has been done.
Additional comment: a good way to avoid a crisis, fix the problem when you first spot it or hear about it. Operational crisis is a reputational crisis and vice versa.
Here are a few thought starters you can discuss at your next team meeting to help your leaders and team see how your business would handle this situation:
- How should organizations prioritize competing stakeholder needs during a crisis?
- How can leaders ensure they are listening to stakeholder concerns rather than simply responding to them?
- How can organizations align their actions with stakeholder expectations during a crisis?
Kith facilitates crisis preparedness workshops that will help your company attain the clarity, trust, and strategic speed you need to respond confidently – no dithering! – to any crisis. We’d be happy to have a conversation about how we can help your company be ready to chart an effective course to reputation protection.
Looking for more fresh insights? Crisis of the Month is a no-fluff Substack that breaks down real-world crises and what they teach us about leadership, communication, and damage control. Whether you’re in comms, ops, or just crisis-curious, this is your monthly guide to what went wrong — and how to do it better. Sign up today!
