Soundview Executive Book Summaries

To Recall or Not to Recall?

When The Los Angeles Times broke the news of McDonald’s recall of 12 million promotional glasses, it didn’t take long for media outlets to pick up the story. The stock market also reacted, though not with the vehemence that sometimes accompanies a recall. The glasses, which were sold to coincide with the release of the latest “Shrek” animated film, contain a small amount of cadmium, a metal believed to cause health risks with long-term exposure.

The debate this creates is whether McDonald’s is at risk of tarnishing its reputation as a child-friendly business due to the recall. Before everyone takes a hammer to the “golden arches,” here’s a few points to consider:

* The decision to recall a product is never an easy one. In an era of demand for transparency, businesses may be better served by recalling a product, particularly if prior knowledge of the potential problem exists.

* According to several sources, including the U.S. Consumer Product Safety Commission, the level of cadmium in the glasses is only slightly above a standard the commission is developing. Note that it’s not above current acceptable levels. It’s difficult to condemn McDonald’s for complying with existing standards.

* According to the Wall Street Journal article (cited above), the glasses were manufactured in the United States. This was not a case of a company caring more about keeping its production costs low by importing glasses from a producer in a country with lower safety standards.

* Beginning June 8, McDonald’s will post instructions on its Web site on how to obtain a refund for the glasses.

In his book Inspire, author Jim Champy made the point that it’s the responsibility of the producer to deliver on any transparent promises made to the customer. In the case of McDonald’s, the company recalled the product before there was an issue, despite it meeting federal standards, and is offering a refund for those who return the glasses. In my opinion, this is a positive example of transparency at work.

To learn more about transparency and why it’s crucial for your company, visit us at


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