Crisis Management & Compliance

 In Case Management, Compliance, Crisis Management, Product Safety Whitepapers

Welcome to our three parts approach to  product safety and regulatory compliance.

(1) Establish a system of people processes and technology to address product safety and regulatory compliance.  The system should involve multiple functions, including, engineering, manufacturing, quality, finance, marketing & sales, legal, and product safety & regulatory compliance professionals.  It should utilize metrics, but be driven by engineering rather than financial principles.  It should be integrated throughout the stages of product development.  It should be preventative as opposed to reactive.  Because it is more efficient and effective to do so, the system should be designed to favor the identification and resolution of product safety issues as early as possible in the product development process.

(2) Develop technical experts and process experts.  With training and practice, they will efficiently and effectively address product safety and regulatory compliance issues.  Promote early identification and resolution of product safety and regulatory compliance issues.  Capture lessons learned from problem solving and incorporate those lessons into new product development to prevent repeat problems. 

(3) To make sure that you have the opportunity to explain what you did and why, develop train good documentation and communication skills. 

To Reduce the Costs of Recalls, Address Product Safety & Regulatory Compliance Issues Early

It is no secret that the cost of addressing product safety and regulatory compliance concerns increases steadily over the product development process.  Potential issues that are identified when the product is still at the “back-of-the-napkin” concept stage cost almost nothing to resolve because nothing has been invested and nothing needs to be undone.   Once the new concept has received the “go ahead” from finance and a preliminary design has been worked up, the cost to remedy potential product safety or regulatory compliance issues is significantly more expensive because of the engineering and other investment.  As the project begins to move forward and prototypes are crafted, the cost to make changes related to product safety, regulatory compliance or even market tailoring, continues to rise.  Not only does the cost to make changes go up, it steadily becomes more difficult to change project direction.   Many departments, and individual employees and suppliers and customers are now aware of the project and will resist change simply due to institutional inertia.  As the product development continues to move forward, regulatory compliance and “due care” testing takes place (either in house or at a third party lab).  As the product design is validated the plant facility has been gearing up for start of production.  Tooling is ordered and testing begins.  Material supplier, transportation vendor and other contracts are confirmed and orders placed.  With each step towards the start of mass production, change becomes more difficult and expensive.  Finally, as the start of product kicks off and the first few lots of product are shipped to the market, the complications and costs associated with addressing a potential product safety or regulatory compliance increase dramatically because now, in addition to making any necessary change to the product, it is necessary to determine where the product is and whether it may have escaped into the market place requiring a recall or other field action.   All of the above applies of course to direct costs associated with recalls and other field actions.  For instance, containment costs, engineering expense for root cause analysis, corrective action engineering, testing and replacement parts, transport costs, labor and communications and legal fees.   In addition, however, and potentially far more devastating to a company with a catastrophic product safety or regulatory compliance issue, are indirect costs relating to follow on civil litigation and most critically reputation damage impacting product sales, share value and even recruitment efforts.  

No system is perfect and even well executed preventative product safety processes offer no guarantees.  Prudent manufacturers hedge against “black swan” catastrophic product safety events with crisis management protocols defining roles and responsibilities for escalation and external communications.   

Best-in-class manufacturers do that, but also this reduces risk and cost in two ways.  First, it results in higher quality product with fewer warranty regulatory compliance processes.  Finally, in the event that an issue does slip through, it will result in improved crisis management capability.  The cost of addressing product safety & compliance issues increases exponentially with the start of production. Therefore, leverage safety processes early in product development to efficiently and effectively reduce reputation and financial risk.

Minimizing the cost of recalls begins with the design process.  The financial and reputation costs of addressing product safety and compliance issues increases exponentially with the start of production.

Accordingly, early attention to product safety and focus on product development processes that eliminate hazards and achieve a high degree of safety efficiently and effectively reduce the overall costs and risk to the company.  Waiting until a safety problem is identified after production and distribution exposes the company to maximized monetary outlays and undermines the image of the company.


The design and pre-production build phases of product development provide the first step, but lessons learned from previous problem solving efforts and past recalls should be utilized to improve future designs and reduce recall costs.  The result is a continuous loop, which is driven by data-based analysis, assesses and incorporates the causes and effects of the company’s actions regarding the product, and recognizes the critical nature of sound communication leading to proper decisions.  Integrating the data gleaned and assessments made at all stages throughout the product life cycle helps to produce positive outcomes.

In the product design and development stages, several considerations warrant attention.  First, regulatory compliance with all applicable regulations, of course, is essential.  Additionally, customer requirements for such issues as safety, functionality, fit and usability need to be addressed.  Also, a manufacturer should provide “due care” analysis that evaluates potential hazards that arising in customer use and even foreseeable types of misuse.  

Build / ship: materials & suppliers, plant engineering and manufacturing capability, templates and control plan

Track quality: monitor production, collect and analyze field from the field, detect problems

Problem solving: after detection, key step is containment – how far does the issue extend – which units affected;  root cause analysis to identify the source of the issue; determine and validate corrective action 

Recall remedy: decision making ; agency interface, communications – internally, customers, media, agency; execute plan.

No single process can screen out all product safety issues, but the catastrophic cost of recalls can be reduced by establishing a framework of processes, integrated into the product development cycle, that facilitate a proactive approach to product safety and regulatory compliance. 


Your client may be doing the right thing with its product cycle, but to stay out of trouble and reduce unnecessary costs related to recalls, they must be prepared to what they did and why they did it.  Following best practices for documentation and communication allows them to tell their story accurately and effectively.

The first step in developing a process-driven approach to documentation and communication involves the creation and regular review of policies and procedures.  Document policy considerations should include:

-standardized word and symbol usage.  This is a particularly important issue for global entities.

-technical writing guidelines

-issue escalation (including both within and outside the entity)

-media coordination

-contingent liability reporting procedures

-litigation hold procedures, including strategy for meeting e-discovery requirements

-identifying confidential and privileged materials

-addressing intellectual property issues

Document creation represents a critical process within the company.  Having inadequate document-creation policies will undermine the company’s procedure, create ambiguities about its products and processes, and ultimately increase costs related to recalls and potentially litigation.  Companies should focus on SMART record creation.  SMART records are Specific, Measurable, Accurate, Relevant, and Timely.  


  • roles & responsibilities. understand your role in the documentation & communication process. obtain legal or other review as appropriate
  • record verified, accurate facts and evidence of design decisions.  describe what was done and why.  use plain language/active voice.  Avoid ambiguity.  include analysis and context. close loops.
  • follow writing guidelines.  avoid ambiguity, unnecessary jargon, acronyms and adjectives, loaded words and font emphasis (CAPS, color, bold, underline, punctuation!) 
  • don’t speculate.  opine only if it is: your job to do so; required by the circumstances; based on verified investigation and analysis.

Distribute purposefully


  • intentionally, thoughtfully and coolly.  not  automatically, reactively, defensively or emotionally.
  • know and follow escalation processes and policies.
  • only as, and to whom, necessary.  do not reply to: all; groups; or anyone unknown to you.  avoid “bcc.” consider forwarding.
  • understand roles & responsibilities – why “cc” someone? 
  • avoid long email strings.  pick up the phone after a couple of volleys.
  • understand and utilize “privilege” as intended.

Retain per policy

  • know and follow all applicable record retention policies;
  • retain final, necessary business records;
  • avoid version profusion;
  • avoid multiple copies of same document in different locations;
  • retain in designated locations,  not:
    • office drawers;
    • Laptop;
    • thumb drive;
    • iPhone, Blackberry, home computer, etc.;
    • e-mail archive 



-cross functional audience including engineering, quality, finance, manufacturing


-most persuasive when the trainer uses specific “burning platform” examples from the industry, company, business unit, or trainer in question.


-update as appropriate, offer annually and make available on the company portal.  Offer a number or contact for follow-up support.


-auditing: utilize a litigation hold process audit, note who has completed the training, and evaluate actual compliance with corporate records policies and procedures.


Training to understand the consequences

  • inability to timely locate key business records can result in:
    • Increased fees (document review, depositions, discovery hearings); employee distraction; erroneously broad recall scope. 
    • harmful evidentiary rulings barring substantive defenses and testimony about engineering decisions; unfavorable verdicts; friction with regulatory agencies. 
  • multiple copies/versions will:
    • increase litigation hold costs (preservation, collection, processing, analysis, review, production, speculation (especially without context);
    • drive up discovery costs and potentially alter outcomes. 
  • inaccuracy, lack-of-context and ambiguity can be: 
    • misinterpreted by news media/counsel.  misunderstood by juries, regulatory agencies, customers; 
    • compounded by social media multiplier and result in large verdicts;

abused by competitors and disturbing to your mother.

Crisis Management and Compliance