BulletProofBlog the blog on crisis communications

After the Intel brand took some well-publicized hits due to flaws in its Pentium chips in 1994, then CEO Andrew Grove coined a phrase that became the company' s mantra in the years ahead. He said, "Bad companies are destroyed by crisis. Good companies survive them. Great companies are improved by them."

As Intel' s latest microprocessor, Nehalem, hit the market last month to rave reviews, it looks like the company took those words - which Intel even put on key chains for its employees - to heart.

A recent New York Times article details how Intel now spends a half-billion dollars annually to put its chips through rigorous testing before they reach the marketplace. When considering the $420 million - and untold amounts in brand credibility and trust - the company spent recalling defective chips in 1994, it certainly seems like a smart investment.

You see, not long before the 1994 debacle, Intel had moved towards minimizing the testing requirements for the Pentium. But not long after the embarrassing episode, the company underwent its monumental shift in the way it approached quality assurance - and in the process, offered a template by which any number of companies can rebuild their brands and re-establish public confidence in their products and services in this age of heightened skepticism and scrutiny.

Whether they are airlines coming under fire for outsourcing maintenance or financial giants in the spotlight for their hand in causing the current economic crisis, companies need to examine the Intel model to understand that there' s no talking your way out of a situation you' ve acted yourself into. Action must be taken. Reforms must be implemented. Sacrifices must be made. And those steps must be highlighted in every media venue possible so that there' s no question about the company' s commitment to the new way forward.

"Bad companies are destroyed by crisis. Good companies survive them. Great companies are improved by them." These words helped Intel bounce back in the mid-1990s, and they will do the same for companies smart enough to heed them as we enter an unprecedented era of corporate peril.