Thursday, May 19, 2005

Wendy's Reputation Struggle

When a Wendy's customer said she found a piece of a human finger in the fast food chain's chili, the company reacted quickly, conducting an internal investigation. It quicked proved to itself it hadn't done anything wrong and offered a reward to find the perpetrator of what we now know was a fraud.

While the company handled the situation as well as it could have and is recovering, it will take a while for its sales to return to where they were.

Even though I know there never was a finger in the chili at Wendy's, the image will stick in my head for a while -- and that might make me (at a subconsious level) avoid eating there. And that's why corporate reputation is so delicate. Wendy's did nothing wrong -- and everything right in the aftermath, but is still suffering. Not fair, but the hard truth.

A well-stated commentary -- See the article in Factiva (subscription req'd) -- by Jack Schuessler, CEO, Wendy's appears in the Wall Street Journal this week. He stated: "The disturbing truth for everyone in the business community is that a devastating fraud can be perpetrated by a single individual. And the ramifications to a company's reputation are frightening."

This is another example of why it's vital for companies to be ever on the lookout for incidents. The faster they react (as long as they react in a way that shows they have nothing to hide) the better it will be for them in the end.

Software tools that allow monitoring of public discussions in the blogosphere and the local media are vital in the process.