Coming clean in crisis management

This is why food companies have a lot to learn from UK poultry processor Bernard Matthews, which is suffering from a huge loss of confidence over its handling of the bird flu outbreak at its plant in Suffolk.

Bernard Matthews has made a lot of wrong moves in its response to the crisis.

In the main, the company's major mistake has been to believe that feeding the public a drip of news here and there would tide them over.

When investigations by regulators and the bulldogs of the news media uncovered the facts, the company's practices were put in an even more glaring light than warranted by the original crisis.

Ever since the crisis began earlier this month, Bernard Matthews has been criticised for being slow in informing regulators that its turkeys were dying in large numbers.

Until public and regulatory pressure came to bear upon it, the company also at first refused to keep its stored meat off the market until all the facts had been ascertained.

Then the media found out that the company was moving large amounts of poultry meat between the UK and Hungary – which is in the throes of its own bird flu outbreak.

Again the company was forced to react rather than be proactive in lessening the public's suspicions.

Now regulators have exposed poor hygiene practices at the company's production plant, possibly leading to the cross contamination and spread of the H5N1 virus between turkey raising sheds.

And as of Friday the company was denying media claims that there was a 40 per cent drop in sales of its products.

Only hours after the denial was published by FoodProductionDaily.com, the company issued a statement that in fact the figure was true for some of its products.

Perhaps of longer lasting consequence is the exposure of the company's factory farm system – making consumers suspicious of the company's claim that it "prides itself on creating healthy, high quality turkeys, maintaining the highest standards of agriculture and bird welfare".

As Bernard Matthews is learning the hard way, a company has lost the battle for public trust once consumers believe that their best interests are not at the heart of a reaction to a crisis.

Proper crisis management is especially important in the case of food safety issues.

For food companies, whose faulty products can lead directly to major outbreaks of sicknesses and even death, there is no excuse not to have a plan.

Here, crisis management focuses on communicating a company's responses to an event that seriously threatens a company's reputation, such as a bird flu outbreak or recall.

It is related to the more general term of "disaster planning", which often describes business continuity plans when natural or cataclysmic events occur – such as an earthquake, a hurricane, or even a terrorist attack.

Of course, the company's actual response to a reputational crisis must be in the right direction in the first place before it goes to the public.

According to Jonathan Bernstein, a crisis management expert in the US, there are "11 commandments" for managing the communications relating to a problem that threatens business reputation.

In the main these relate to first identifying areas that could cause a business to lose reputation – such as a recall, food safety problem, or accusations of poor practices.

Then the business must come up with a plan over how to deal with such problems.

At his firm Bernstein Crisis Management the central theme relates to communication.

A company must have clear lines of communication internally, even down to ensuring the janitor knows who to phone when he spots a problem.

Crisis management means setting up lines of communication between your lawyers and your communications team.

Above all, the communications unit must know how to deal with the media, anticipating their needs and providing in time the information the company wants to release.

The fact is, a lot of "communications" spokespersons do not know how to deal with the media, probably because they have never worked in the industry themselves.

Other strategies involve developing holding statements until the crisis situation can be assessed, then identifying the key messages the company wants to send to the affected stakeholders – including customers.

Riding out the storm does not include denying there is a problem, as Bernard Matthews has consistently done on its site.

As Bernstein says, organisations that do not understand the importance of adequate communications in crisis situations will time and time again find themselves in trouble.

Operational response will break down and stakeholders will quickly be confused, angry, and negatively reactive.

Finally the organization will be perceived as inept, at best, and criminally negligent, at worst, he says.

Cadbury learnt a similar lesson last year in keeping from the public the information that there had been a contamination problem at one of its factories.

That lesson cost the company an estimated £30m (€45m) and probably more in trust.

As Bernard Matthews is now learning, coming clean in the first place when the problem occurred would have been infinitely more preferable than seeming to be involved in hiding the dirt.

Ahmed ElAmin is a business journalist of 20 years' standing, having specialised in development issues, food, wine, technology, international business and offshore finance, before joining Decision News Media as the Editor of FoodProductionDaily.com.

To comment on this article please e-mail ahmed.elamin@decisionnews.com.

Readers Comments Dear Editor, At this short distance from the original crisis, it seems like the producer really did have something to hide.

Though they may not been fully aware of all the ins and outs as the debacle unfolded.

In a crisis you seldom are.

Clearly they should have told the truth at the time: or produced a holding statement indicating a thorough investigation would be conducted, until the truth could be declared.

However - a concern emerges: Did they even have the communication systems in place at the time, such that the 'truth' - i.e. status of factors conspiring against them during the crisis - was actually discernable by their executives, or spokespeople.

{And I write this having been involved in crisis communication / training and food issues management (GM) with Unilever in my past.} Or, may be it's payback time for the course they've charted so long; arriving at a destination clear to external observers but unknown to themselves?

Sure we want our food piled high and cheap - but are producers investing in the necessary insurances of corporate ethics and integrity.

Clearly an uncomfortable place to be in terms of brand loyalty and corporate trust: but then, would you trust a chicken nugget or turkey twister?

Paul Hart - PH-Pr Communications ------------------

Dear Editor I was Corporate affairs Director for Safeway Food Stores from 1990-96.

In this role I had charge of crisis management dealing with the media

so I agree with your comments.

I would also add that you need to get control of the crisis within the first two hours.

I also comment on retail and food issues for BBC Business Programmes as an independent retail consultant and I know how frustrated the BBC were with the lack of spokespeople from the company.

There may well be a reason since the fantastic MD David Joll has now retired and I think he would have handled this differently.

Teresa Wickham TWA Communications ------------------------------

Dear Editor, I am an Amero-European currently residing in South Africa.

Crisis communications is a speciality of mine-especially in the face of rampant avian influenza, which regrettably is also receiving short shrift from too many companies.

With respect, I just wish you had said one thing as sharply and as clearly as you said everything else: ALWAYS TELL THE TRUTH.

Customers hate spin.

They loathe it.

And they should.

It's a vile insult to mess with the minds of people who you are asking to trust you and to buy from you.

Some years back, when I was Director of Worldwide Communications for Hill & Knowlton (world's largest PR/communications form), a major oil company had an unfortunate spill onto a river in the US.

The CEO was receiving wretched advice from spinmeisters and cynical executives.

Fortunately, his gut spoke a different message, and he heeded it.

He called us.

I advised him to take off his coat and tie, and to walk out in front of CNN and all the other cameras.

Look them right in the eye, I told him.

"Ladies and gentlemen, we have screwed up royally.

We don't quite yet know how, but nobody on technical staff is leaving this company tonight until we do know.

Now, we may not yet know exactly what caused this regrettable leak, but the simple truth is that it happened on our watch, and we're going to make it right."

Half an hour later members of the press corps were down at the river with this CEO, aiding him in some skimming, trying to save fish and wildlife.

The company lost zero sales, and only one negative story appeared in media-alongside a lot of praise for their open integrity.

Tell the truth, dammit.

And never fear the consequences.

I'm not sure I agree that there are 11 rules in crisis communications.

But just this one has saved many companies who respected and practiced it.

Prof.

Bruce Alan Johnson Bruce Alan Johnson Associates (Pty) Ltd South Africa