By Geoffrey Smith and Alan Murray
April 26, 2016

Nestlé has been a leader in the “shared value” movement – an effort to show businesses can do good in the world, even as they are doing well for shareholders. It has rebranded itself, in its own words, from a food company into “the world’s leading nutrition, health and wellness company.”

 

But that carefully cultivated corporate image took a terrible beating last year, when the Indian government declared it had found lead in the company’s popular Maggi noodles. The product was pulled from the shelves, and the crisis cost the company close to half a billion dollars, with a damage to the brand that could last for years.

 

What went wrong? Fortune’s Erika Fry has spent months untangling the complicated story, which reads like a drive through the streets of Mumbai, with miscues, misinformation, and the muddle of Indian politics. I recommend it as a case study in how a crisis can hit you when and where you least expect it, and have profound implications for your business.

 

Ultimately, our story doesn’t solve the fundamental riddle – how 30 Indian government tests somehow detected lead in Nestlé’s noodles while the company’s repeated testing could find none. But it does document some critical lessons learned along the way.

 

“This is a case where you can be right and yet be so wrong,” Nestlé CEO Paul Bulcke told Fortune. “We were right on the factual arguments and yet so wrong in the arguing. It’s not a matter of being right. It’s a matter of engaging the right way and finding a solution… We live in an ambiguous world. We have to be able to cope with that.”

 

The story is featured in our May magazine, but you can – and should – take time to read the full story here.

 

Alan Murray
@alansmurray
alan.murray@fortune.com

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