Product Recall Simulation Excerpt from Rich Cohen and Jeanne Finegan in Warranty Week

February 28, 2007

And then, in the Regency Ballroom, the first day of WCM will conclude with a simulation of a product recall featuring a bit of role-playing by four experts in the field, who will act as if they're working for a water heater manufacturer that's trying to decide whether one of their product lines is in need of a safety recall. Richard Cohen, senior vice president of the Garden City Group, said he will initially take on the role of the "evil moderator," although from the outline of the exercise described to Warranty Week, there really are no villains in this show. The Garden City Group traditionally assists companies with the identification of individuals who are impacted by some type of an action, such as a class action lawsuit settlement or perhaps a bankruptcy filing. It can help a client with everything from the filing of legal notices and publicity for the settlement through the processing of claims and the operations of a call center. Typically, GCG is called in once a settlement has been reached, and needs to be implemented. So what it's doing at the WCM Conference is delving deeper into the initial phases of the recall process than is its custom. Normally, the Garden City Group would help a company conduct a product recall, once the company and/or its regulators have decided that a recall is necessary. But this panel will begin with the appraisal of failure data that forces a company to make some hard decisions. Weeks ago, each participant received a copy of the hypothetical facts of the case, and a summary of what role they will play. It's supposed to be a water heater manufacturer that finds a pattern of failures in a product they sold, forcing them to decide whether to issue a product recall or not. Cohen said he sees warranty and recalls as very closely related. In some ways, a recall is like a catastrophic warranty claim, where instead of 2% or 5% of the products coming back for repair, it's more like 90% or 100%. And it's also different in terms of stress and emotions, he said, depending upon the perceived risk. For instance, if it's a battery producing the wrong voltage, it's not so catastrophic. But if it's a medical device that's malfunctioning in a way that affects health, people get worried. And it's his job to make sure they don't panic. "At the end of the day, there are two major issues: the safety of the public and the reputation of the organization," Cohen said. "Our job is to help manage misinformation, and to make certain people get what they're entitled to, no more, no less." Dr. Edward Heiden, president of Heiden Associates Inc., will be the risk analyst. "I will be looking at the issue of whether there's enough data there to decide that we have a product defect that warrants a recall," Heiden told Warranty Week. "Therefore, I'll be talking about what kinds of data I relied on, how I looked at company data, and how I looked at data from the outside, and weaving it through a story of how you do use all these data that are available: warranty data, complaint data, etc." Then Heiden will -- spoiler alert -- work with the other panel members to design the actual recall of the water heaters, working with the other panelists on the design of the communications strategy and then determining its effectiveness. "I think it's a good way of bringing up the issues and getting people's attention," he said. "Hopefully, we're make an impression." Heiden's company is in the business of helping manufacturers look for cost-effective solutions to their product safety problems, with particular experience in risk analysis and product recalls. He actually worked for the U.S. Consumer Product Safety Commission from 1976 to 1979, and founded his own consulting firm soon after leaving the agency. Since then, he said he's consulted with more than a hundred clients for what he calls recall counseling. It's a lot like warranty management, he said, but at the same time it's a bit different. "Warranty management involves the same kinds of interpretive moves on the data," Heiden said," and the same kinds of searches for patterns and spikes, and determining those spikes against a baseline." But there are additional requirements and decisions that are specific to recalls, and Heiden said he hopes attendees get a flavoring of those. Jeanne Finegan, senior vice president of the Garden City Group and an accredited public relations professional, said she will play the role of a communications manager who has to design and execute the product recall notification and outreach program for the water heater manufacturer. Finegan said she's put together several high-profile class action notification efforts for GCG clients in the past, so this is something she knows how to do quite well. "Basically, what we want to do is create some thought-provoking situations," Finegan said, "in regards to when a recall will actually be triggered, and with respect to the manufacturers, what obligations and duties they have in terms of post sales duties to warn customers that there may be a problem." Finegan said her specialty is to help clients understand who their customers are and how they can best be reached through various media and communications channels. "I started out as a reporter," she said, and then she went into public relations and media research. "My background is in the news, and my background is in public relations." So she feels she knows the media from both sides. And she's also worked with the Consumer Product Safety Commission as an outside expert on a streamlining of the whole recall process.

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