Editor's note.

James O'Rourke's paper on how Merck managed communications about the Vioxx recall reads like the beginning of a novel. The ending may not be known for many years, as more than 11,000 product liability lawsuits run their course in the courts. One sure lesson for all CEOs and senior managers is never to think, "it can't happen here." In the 1980s and 1990s, when Merck routinely appeared on lists of best companies, no one at the company thought it could fall so suddenly and so far. But pharmaceuticals are particularly at risk for product liability issues that affect thousands.

Communication crisis experts warn that no large company should consider itself insulated from crises where it is potentially blamable. These are not catastrophes due to external factors like terrorism but crises where the company stands to lose millions or billions due to possible wrongdoing. Most large companies give lip service to the need for a crisis communication plan but many do not have one in place. It is too late to create one after the crisis happens.

Even with a plan in place, many companies faced with a product crisis think that by denying or not commenting on the problem immediately, it will go away. Not only will not go away, it will escalate and reverberate as the damage spreads. Whether the damage to stock price or reputation is more serious is hard to say; besides, the two are intertwined.

Business professors recently offered their opinions on crisis management in a BusinessWeek article (April 17, 2006) about the Bausch & Lomb (B&L) crisis. Bausch & Lomb, an eye health company headquartered in Rochester, New York, has core businesses that include contact lenses and lens care products. There were reports of over 100 infections in early 2006 linked to contact lens solution made by the company. The professors weighed in on whether B&L had done enough, quickly enough, to handle the crisis effectively. Opinions diverged, but all essentially agreed with Irv Schenkler of New York University Stern School of Business:

 
   Consumers want reassurance that the company is actively engaged in 
   solving the problem ... The CEO must come across as humane and 
   empathetic. He can't be seen as hiding behind data or blaming 
   others or the media. 

Readers will find James O'Rourke's account of the Merck crisis fascinating, especially since he was able to interview Joan Wainwright, the vice president of communications, several times. ...