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When a leader fails to foresee the worst

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in Best-Practices Leadership,Centerpiece,Leaders & Managers

bar graphUnderestimating a crisis can upend a leader’s best intentions. Just ask Paul Bulcke. Bulcke, 62, has served as CEO of Nestlé for nearly nine years. The biggest food and beverage company in the world, Nestlé makes one of India’s favorite products: Maggi 2-Minute Noodles.

In 2014, when residents of India consumed over 400,000 tons of the instant noodles, Maggi was among the country’s most trusted brands. But that didn’t matter when government food regulators suspected that the product contained harmful levels of lead and eventually banned its sale.

Even though India’s regulators grew increasingly aggressive in questioning Maggi’s safety, Bulcke took it in stride. He knew Nestlé’s internal analysis didn’t find a lead problem in the noodles, so he figured it was a technical issue with the tests that India’s regulators were using.

Only after he flew to India to resolve the matter did he realize the extent of his misjudgment. Attending a meeting with India’s food regulators, Bulcke was stunned at the seriousness of the charges against Nestlé. He quickly concluded that a settlement was not going to happen, so he authorized a voluntary recall of all Maggi products in India.

To make matters worse, India’s fiery, round-the-clock media caused the Maggi controversy to dominate the headlines. Because Nestlé did not initially try to defend itself, the coverage was alarmist.

Looking back, Bulcke admits that his thinking was “too Cartesian,” meaning that he was overly logical and failed to appreciate the public’s perception of the situation. Nestlé belatedly boosted its media relations and a Bombay court overturned the government’s ban.

— Adapted from “Hot Mess,” Erika Frye, www.fortune.com.

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