Wednesday, April 1, 2009

10 points on how to deal with a crisis from Jim Foster, CEO of Charles River Laboratories

Jim Foster, the Chairman, CEO and President of Charles River Laboratories came to our Managing Adversity class and talked to us about how his company dealt with a crisis at his company having to do with a contimination of one of their best selling products.  I'm especially excited about this class - it's taught by two former CEOs, Howard Anderson and Peter Kurzina, and it fits into my training (I'm a Certified Business Continuity Planner).  

These were 10 takeaways:

1) Integrity is essential.  You want to handle situations the way J&J handle the Tylenol poisoning crisis, not the way Merck handled Vioxx.  

2) Take no short cuts in ensuring quality - Pressure from CRL's parent at the time, Bausch and Lomb, had caused cost cuts that reduced CRL's safeguards at the time.  Foster took accountability for this, told B&L that they needed to invest in the business and got the problem fixed.

3) Always protect your customer

4) Maintain open and efficient lines of communication with your customers and employees

5) No auto-pilot - It should raise an alarm if any employee says "This business is on auto-pilot".  Prevention must be practiced - anything on autopilot will eventually crash into the side of a mountain.

6) Think twice about retribution; no scapegoating of employees - Foster as CEO took the blame himself in the case.  This built employee loyalty and brings us to the next point...

7) Let employees focus on fixing the problems rather than losing their jobs.  In times of crisis, you need their hard work and loyalty the most.  

8) The mark of a great company is how it deals with adversity.  CRL's transparency and honesty with its customers actually helped the company increase its reputation.

9) Responsiveness to your customers is key.  
10) At the end of the day, it's all about your people.

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