A few days ago I wrote a post about how Mattel appeared to have seized the opportunity to generate some good PR for itself out of the China product situation. I framed it as a PR risk vs. reward equation, and thought that Mattel had done a very good job of bolstering its reputation by taking the risk of inviting journalists to tour its facilities in China.

The problem with those risks is that they are so darn risky. At the end of my post I wrote:

I suppose this story could back to haunt Mattel if they have a China-based problem in the next few months. But that seems unlikely --or at least an acceptable risk-- and in the meantime they've earned themselves good coverage out of a situation that many other companies simply hoped would blow over.

I was wrong. It was not unlikely. It was, in a perfect illustration of Murphy's Law (or Sod's Law if you are anglicized), inevitable. The news broke this morning that Mattel is recalling nearly a million toys for problems with lead-based paint. It was first reported by AP, but one of the two journalists who wrote the story I commented on last week has written it up more extensively for the New York Times:

On July 18, Mattel took a reporter for The New York Times on a tour of a factory in Guanyao, China, and of Mattel's toy safety lab in Shenzhen. At that time, Mattel executives say, it was unclear whether Mattel was facing a widespread lead paint problem, or if the European case was an anomaly.

Last Thursday, the same day this newspaper ran an article on the subject of preventing safety violations in Chinese factories that focused on Mattel, the company's executives say they received conclusive data that convinced them to recall the 83 products. Then, the company contacted retailers who stocked the toys.

"This is a vendor plant with whom we've worked for 15 years; this isn't somebody that just started making toys for us," Robert Eckert, the chief executive of Mattel, said in an interview. "They understand our regulations, they understand our program, and something went wrong. That hurts."

Boy, does it ever.

What does this mean for Mattel? They seem to be doing a pretty good job of handling the recall, and they have a history of managing this kind of situation fairly well. But the timing is disastrous and the episode will undo the reputational boost they got from the story last week. Furthermore, they now face the extra scrutiny that will come from having showcased (the PR man in me hesitates to use the phrase "boasted about") their quality control mechanisms in such detail. If you're so good, why didn't you catch this?

One of my regular commenters, a lawyer, pointed out:

[You] raise a good point about what happens if a problem occurs in the future, e.g. a product liability claim based on their China-made toys.  Having established for broad public view their set of standards, the potential for deviation from those standards could form the basis for negligence issues.

I wonder whether Mattel had internal communication issues. Last week's article was apparently in development for about a week, before being published on the 26th. Today's article notes that Mattel received information of the problems on same day that the report ran. Now that's bad timing, and, if this was a surprising result from routine testing, perhaps just colossally bad luck. But if anyone in Mattel suspected problems or knew before the article ran --or, especially, before the journalists were invited to tour Mattel's facilities--  that the results might be problematic, then Mattel had an internal communication breakdown that might have substantially affected their PR decision making. All this is simply speculation on my part, and should be taken as such.

PR people should take calculated risks, and I still admire Mattel's decision to work with the Times journalists for last week's story. I think it was gutsy and had until now yielded good results. But PR people also need to do their own due-diligence on these kinds of risks. What test results do we have pending? Are there any known issues that might break in the next few weeks? What's my level of confidence? Mattel's PR squad may well have done this and more, but I'm still happy I'm not the person explaining the decision making to Mattel's senior management this week.

I'll be interested to see how Mattel handles communication around the recall. I also hope that companies don't take the wrong lesson from this and become even more cautious in communicating about their China QC and sourcing. In general I still think there is a lot to be gained from showing consumers what you do to protect them, even if the systems aren't perfect.