Freakonomics: How does a company bounce back after controversy?

Rex Tillerson, Chairman and CEO of ExxonMobil, John Watson, Chairman and CEO of Chevron, James Mulva, Chairman and CEO of ConocoPhillips, Marvin Odum, President of Shell Oil Company, and Lamar McKay, Chairman and President BP America, Inc. are sworn in for a hearing before the House Energy and Co.C.

Kai Ryssdal: Time now for a little Freakonomics Radio. It's that moment every couple of weeks where we talk to Stephen Dubner, the co-author of the books and the blog by the same name -- it is about the hidden side of everything. Dubner, what's going on?

Stephen Dubner: Hey Kai, I've got a story for you. I was having lunch here in New York, a place called Le Pain Quotidien. It's a small chain founded by a Belgian chef, and it's known for its healthy, organic food and their really nice ambiances -- classical music and these wonderful rustic wooden tables. Which I have to say are perfect for playing backgammon while you eat.

Ryssdal: Not at all pretentious, then, all right. Go ahead.

Dubner: Not at all. And that is exactly what I was doing one day with my friend James Altucher -- until the incident.

Ryssdal: The incident? Should we play scary music now or what?

Dubner: You might want some scary music. Here's what happened: So this woman who was sitting near us started making this very distressing noise, kind of half-crying and half-screaming. I thought she was having a sort of emotional breakdown or she was sick, but that wasn't the problem at all. Here's my friend James.

James Altucher: So that's why I stood up and basically walked over to the table. And the manager's over there, and there was a dead mouse in her salad.

Ryssdal: No! Wait, what? No, no.

Dubner: Yeah, an entire corpse of a mouse.

Ryssdal: Nobody's playing backgammon now, huh?

Dubner: Backgammon, bye-bye.

Ryssdal: Over, yeah. So what happened then?

Dubner: Well someone from the restaurant came over and sat with the woman and calmed her down. And we weren't done eating, and we were a little bit grossed out.

Ryssdal: That's funny, because when I see a mouse, I'm done. But anyway, go ahead.

Dubner: We did decide to leave at that point, even though there was still a little food on our plates. And now I have to say, the manager was very apologetic. He refused to take our money and he said he hoped we'd come back another time. So in my view, the restaurant handled things about as well as you could hope after this bad thing happens.

Ryssdal: Sure. But by the time you actually get a dead mouse onto a customer's plate, how do you bounce back from that? What are you supposed to do?

Dubner: Well that's exactly what I started to wonder. What do you do when you're a firm and something bad has already happened -- how do you recover from it? Especially if the incident is bigger than just, you know, a mouse in a salad? So I talked to a fellow who handled public relations for Lehman Brothers while it was collapsing, and after that, he moved onto BP during the Deepwater Horizon spill. His name is Andrew Gowers, and he says that the grail for a firm under fire like that is very simple: transparency.

Andrew Gowers: If there's any suggestion that you are behind the curve in terms of withholding information, or worse, still disguising or gilding information, then you are on to a very difficult place.

Ryssdal: Yeah, OK, I get the whole 'honesty is the best policy' thing. And with things like BP and Lehman Brothers, it's fine in the abstract, but this lady who found a mouse on the place -- come on.

Dubner: So I talked to the CEO of Le Pain Quotidien, his name is Vincent Herbert. He actually met at the scene of the mouse. He said he was horrified at the incident and he didn't try to shirk the blame. I mean, you'd like to think that the kitchen staff or the waiter would have noticed the mouse before serving it to the customer, but Herbert said that the mouse actually came with the greens from the field. And here's the thing: Le Pain Quotidien prides itself on serving organic produce. So using pesticides, for instance, might cut down on the chances of, let's say, another mouse in the salad. Truth is, it's very hard to know if that's actually true. But moving away from organic would violate the firm's core philosophies, he calls it.

Vincert Herbert: There was nobody on the team that suggested that we had to change the philosophy. That was very reconfirming for me to say, OK, my team still are die-hard believers in the core philosophy of Le Pain Quotidien. And for me, there was no question.

And Kai, I'll tell you what's interesting to me: The woman who got served the mouse in her salad? She wouldn't talk to me on tape, but we did exchange a few emails. She's so devoted to Le Pain Quotidien's organic philosophy, that she became even more devoted to the restaurant after this incident.

Ryssdal: Clearly Le Pain Quotidien is doing something right to keep its customers happy, even after a mouse en brochette, as it were.

Dubner: Absolutely. And I think that's to their credit. Look, bad things happen in business. How do you recover from them? That's what to me this story is about. But you're a pretty brave fellow, Kai, aren't you? We've established that?

Ryssdal: I am, provided it's not a scary movie. I don't do scary movies, but you know.

Dubner: Well I ordered in a meal for you today. Turns out you can actually get a nice organic salad right there in L.A. too, who knew?

Ryssdal: You can.

Dubner: You got it there?

Ryssdal: Yep, Le Pain Quotidien, it says right on the box. I'm actually digging around for a mouse. Am I going to get a mouse in here, Dubner, or what?

Dubner: I'm guessing it's a very, very slim chance. Look, on the bright side, if you do, there's your protein for the day, buddy.

Ryssdal: I'm going to be so annoyed with you. All right, Stephen Dubner, FreakonomicsRadio.com is the website. In a couple of weeks, Dubner, and I'm going to get you back, pal, I will.

Dubner: Good luck.

Ryssdal: Ooh, it's got radishes too.

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