Thursday, 4 June 2015

“Maggi Noodle (Nestle India) Controversy: How do Leaders and CEOs Overcome Organizational Crises?” ―Professor M.S.Rao

“The secret of crisis management is not good vs. bad, it’s preventing the bad from getting worse.” ―Andy Gilman, Comm Core Consulting Group

The "2-minute" Maggi noodle of Nestle India kicked up controversy in India for excess level of Mono Sodium Glutamate (MSG) and Lead. The laboratory reports show that the company has violated the health guidelines.  Currently it is banned in six states ―Gujarat, Tamilnadu, J&K, Uttarkhand, Telangana and Delhi.  Who is to blame for this ―company, government, health officials, brand ambassadors or people?

Companies approach the celebrities to endorse their brands to enhance visibility for their products and services and increase their sales. People often buy the products and services because the celebrities have endorsed them. Hence, the celebrities cannot run away from their responsibility.  When a train accident happens the railway minster resigns. Did the railway minister do the accident? It was done by railway employees. But the railway minister takes moral responsibility. Similarly, brand ambassadors must take responsibility for endorsing wrong products.  

Celebrities and Endorsements

Celebrities want money and companies want revenues, and ultimately it is the people who pay the heavy price.  Brand ambassadors must be held accountable. They cannot go scot-free. When they accept the fame for their credit, they must equally accept blame for their debit. Additionally, it is a business rule to share both profits and losses.  Brand ambassadors exploit their fan base to make money. At times, brand endorsements strengthen their brands through advertisements.  Hence, they must be made accountable when things go wrong.

It is a wake-up call for celebrities and people ―for celebrities, not to endorse every brand just because they get money; and for people, not to buy the brands just because they are endorsed by celebrities.

The senior leaders of the company, the health department, the government and people must take responsibility for this controversy. Most it is the companies to be blamed for such irregularities. Hereafter, celebrities must not endorse products and services purely for money. They must endorse when they receive assurances from the companies, and are convinced about the credentials of the brands.

Steps to Overcome Crises

Crises are part and parcel of personal and professional life. They can happen to any individual and organization.  When you look at BP it overcame gulf oil spill. Similarly, Malaysian Airlines overcame two disasters successfully.

As a leader, whenever you are confronted with any crisis, don’t be in a hurry to blow the crisis.  Trust yourself. Recall the crises you handled in the past to draw lessons. Find out how other organizations handled such crises in the past. Take leafs from them. Get facts and figures. Wear your emotions on your sleeves. Go by reason and logic. Be cool and composed. See the big picture. Understand the crisis from the grass root level. Invite experts and brainstorm to create viable solutions. Choose the most appropriate one as per the situation. Act promptly without any hurry.  Communicate clearly with facts and figures to avoid confusion in people. Lead by example to come out clean. Be bold to face the controversies. Controversies are part and parcel of life. Hence, act, don’t react to controversies.  Check spread of rumors.  Engage social media managers to contain the damage.  Take it as a challenge and face it squarely. Don’t delay to communicate with the stakeholders. If you find that mistakes happened, apologize to contain the damage.


Crises must be handled with cool and composed demeanor. They must be handled with tact and diplomacy. If not handled well, it can wipe out years of hard work, sweat and company’s brand image within minutes. Presently the social media is very active where people post negative things rather than positive things. Jonathan Bernstein of Bernstein Crisis Management Inc. rightly remarked,  “In the 21st century, a social media savant can do more harm than a trial attorney.”  The leaders and CEOs must take all appropriate steps to overcome the crises and keep all stakeholders informed constantly to ensure that organizations are back to track toward northward movement.

“To be effective in crisis management in the digital age means being able to use social media strategically. There is no crisis management today without a full understanding of how to use new media to listen to conversations around your brand in real-time, and understand what you do and don’t need to respond to.” ―Chris Syme, author of Listen, Engage, Respond

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Professor M.S.Rao, India
Founder of MSR Leadership Consultants India
Listed in Marquis Who's Who in the World in 2013
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