2009 CPRS National Conference

     Leadership i Diffi lt Ti
     L d hi in Difficult Times:
       The Listeriosis Outbre...
Agenda

    •   Introductions
    •   Leadership in Difficult Times – Jeanette Jones
    •   Crisis Research – Dave Scholz...
Leadership in Difficult Times



          Jeanette Jones, ABC
          Vice President, Communications
          Maple Le...
What happened?

    In August/08 Maple Leaf initiated the largest recall in the
    Company’s history
       Three SKU’s o...
Background Information
             About Listeria
    Six species – only Listeria monocytogenes causes human illness
    ...
Bartor Road Recall
                       Key Timelines and A ti
                       K Ti li         d Actions

       ...
Intense Media Coverage – August 2008


    Nationwide outbreak spurs massive meat recall; Maple Leaf plant
       shut aft...
Intense Media Spotlight


    Media              First 10 days    First month
    Print                 408               ...
Introducing a New Risk

    While there have been 73 recalls in the US in the past 5 years for
    Listeria monocytogenes,...
Our Response

     Demonstrate the highest level of responsibility possible


                      Take accountability


...
Our Values

 Maple Leaf Leaders will Always… By
                         Always  By…
      Do what’s right            Acti...
Values Provide Compass

     Organizational values are clear and d
     O     i ti    l l          l      d deeply entrenc...
Take Accountability and Placing
             C
             Consumers Fi t
                       First

     Recognition ...
Lead in Transparent & Fact Based
            C        i ti
            Communication
     Communication Team
       Led by...
Public Outreach
     Employ a Variety of Mediums
        Media tours of plant (before and after outbreak)
                ...
Internal Outreach

     Employee impact was significant
        Shock, grief and remorse
     Fully accept g
         y   ...
Be Prepared

     Formalize institutional learning
     Crisis Preparedness Plan
         Who is on the team?
         Key...
Implement Decisive Action Plan
     Immediately appointed a Recall Team and Project
                y pp                  ...
Lessons Learned
     Importance of accepting responsibility
        Apology immediately upon linkage to illness and death
...
Lessons Learned
     Immediacy of communications
             y
         Press conferences in ASAP mode (Sat 10:00PM; Sund...
Regaining Consumer Confidence
         Claimed purchase and purchase                                        Consumer Aware...
The Path Forward
     Settled class action lawsuits quickly and fairly
                                   q     y         ...
Summary

     Public face of CEO is critical to accept accountability and maintain
     public trust
     Actions and comm...
Authentic Leadership and
        Crisis Reputation Management

             Dr. Terence (Terry) Flynn, APR, FCPRS
        ...
Firehouse Research
    Objective: To get into the field quickly, and then over time, to assess
    how C
    h    Canadian...
Purchase Behaviour (Previous 6 Months)




The Purchase Process • Research Proposal
Awareness




The Purchase Process • Research Proposal
Video Awareness




The Purchase Process • Research Proposal
Reputation Ratings




The Purchase Process • Research Proposal
Spokesperson Credibility




The Purchase Process • Research Proposal
Cares About Public Safety




The Purchase Process • Research Proposal
Trust That They Will Do What They Say




The Purchase Process • Research Proposal
Likelihood to Purchase (1 Month)




The Purchase Process • Research Proposal
Likelihood to Purchase (6 months)




The Purchase Process • Research Proposal
GO x PH x Impact




The Purchase Process • Research Proposal
Reputation Capital Restored
 Recall



                                           Law Suit Settled




      Market Cap   ...
Stuff Happens!

     February 25th – MLF issues a Weiner
     Recall
     Quarantined product shipped to stores
     (ON, ...
How Did The Markets React?




The Purchase Process • Research Proposal
How Did The Public React?
              Wave 1    Wave 2     Wave 3   Wave 4    Wave 5
   Good       46        55         ...
REPUTATION RESTORED




The Purchase Process • Research Proposal   40
A Living Case Study


      Strong crisis leadership
         Legal and fi
         L    l d financial considerations t k ...
So What Does Mean For Your Company or Your
                          Clients?
   They need to recognize that they are now ...
Questions/Comments




The Purchase Process • Research Proposal
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Authentic Crisis Leadership and Reputation Management: Maple Leaf Foods and the 2008 Listeriosis Crisis

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Terry Flynn, APR, FCPRS; David Scholz, and Jeanette Jones, ABC, Vice President of Communications, Maple Leaf Foods Inc. have all been personally involved with Maple Leaf Foods through their respective roles in academic research, marketing and communications. Now these PR leaders are combining forces to bring us a comprehensive overview of how Maple Leaf, and particularly CEO Michael McCain, showed courage and leadership in a time of extreme corporate crisis.

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Authentic Crisis Leadership and Reputation Management: Maple Leaf Foods and the 2008 Listeriosis Crisis

  1. 1. 2009 CPRS National Conference Leadership i Diffi lt Ti L d hi in Difficult Times: The Listeriosis Outbreak Jeanette Jones, ABC, Maple Leaf Foods , , p Dave Scholz, MA, Leger Marketing & Dr. Dr Terry Flynn APR FCPR Flynn, APR, Dave Scholz 1
  2. 2. Agenda • Introductions • Leadership in Difficult Times – Jeanette Jones • Crisis Research – Dave Scholz • Authentic Leadership – Dr Terry Flynn Dr. • Discussion 2
  3. 3. Leadership in Difficult Times Jeanette Jones, ABC Vice President, Communications Maple Leaf Foods Inc. June 9, 2009 3
  4. 4. What happened? In August/08 Maple Leaf initiated the largest recall in the Company’s history Three SKU’s of deli products manufactured at our Bartor Road facility were found contaminated with Listeria monocytogenes and linked to illness and death • 22 deaths; 57 cases confirmed Products P d t were distributed primarily t health care f iliti di t ib t d i il to h lth facilities, where h people have a higher risk for contracting listeriosis To contain risk, a decision was made to close the plant and recall ALL products back to January/08 This involved a massive recall of 191 products, even though only a small number were affected 4
  5. 5. Background Information About Listeria Six species – only Listeria monocytogenes causes human illness p y y g Can be found almost everywhere, including soil, water and foods Vegetables, fruits, unpasteurized dairy, shellfish and meat 1-10% of all ready-to-eat foods contain Listeria monocytogenes It is readily destroyed through cooking Listerioisis is the serious infection caused by eating food contaminated by Listeria monocytogenes Listeriosis is extremely rare, affecting an average of 1-5 in 1 million people y , g g p p per year Healthy adults and children are at extremely low risk For h immune compromised, pregnant or i f F the i i d infants, i can b it be serious or fatal 5
  6. 6. Bartor Road Recall Key Timelines and A ti K Ti li d Actions Aug. Aug.- Sept. Sept. Current 23rd Sept. 5th 17th Match found to Comprehensive Likely source of y Plant reopened All facilities strain linked to investigation contamination and resumed operating under illness and launched by MLF identified; food production the highest food death. Recall with panel of safety under enhanced safety protocols voluntarily experts; deep enhancements protocols; in North America expanded sanitization of implemented positive findings (191 products) plant proceeds on Oct 8th temporarily suspended distribution 6
  7. 7. Intense Media Coverage – August 2008 Nationwide outbreak spurs massive meat recall; Maple Leaf plant shut after bacterial illness kills one and sickens at least 16 others…Globe And Mail Dozens more cases of the illness are suspected. The damage has been a body blow to Maple Leaf Foods … Global News y p Killer bug tied to 7 deaths; 38 confirmed or suspected cases as outbreak ripples across province Toronto Sun province…Toronto Tests verify Maple Leaf meats' link to outbreak. Health, food y agencies tie toxic strain to deaths…Toronto Star 7
  8. 8. Intense Media Spotlight Media First 10 days First month Print 408 1,011 Broadcast 1,959 3,198 Online 233 443 Surveys showed virtually 100% awareness among Canadians of listeriosis crisis 8
  9. 9. Introducing a New Risk While there have been 73 recalls in the US in the past 5 years for Listeria monocytogenes, and regular occurrences in Europe, this was a new risk introduced to Canadians Came at a time when consumers are increasingly concerned about the safety of the food supply Melamine, Bisphenol A, acrylamides, E. coli outbreaks Maple Leaf had to take a leading role in educating the public 9
  10. 10. Our Response Demonstrate the highest level of responsibility possible Take accountability Put public health and consumer interests first p Lead in open and fact based communication Implement decisive action plan 10
  11. 11. Our Values Maple Leaf Leaders will Always… By Always By… Do what’s right Acting with integrity Treating people with respect Having an intense competitive edge Always challenging for better performance from better people Setting stretch targets; being accountable for results Be performance driven Being fact based; objectively measuring progress & success Encouraging the freedom to disagree Recognizing and rewarding progress & performance Maintaining the highest level of energy & urgency Assuming th initiative A i the i iti ti Have a bias for action Accepting calculated risks, without fear of failure Building mutually supportive teams, with decisive leadership Hating bureaucracy; fostering a lean, agile, & flexible organization Committing to continuously learn and teach Continuously improve Embracing change as the only path to future opportunity g g yp pp y Being consumer driven Be externally focused Understanding competitors as well as ourselves Communicating candidly, and in a direct manner Dare to be transparent Having the self confidence to operate without boundaries Making vision and plans clear to stakeholders By sharing, trusting, & admitting mistakes 11
  12. 12. Values Provide Compass Organizational values are clear and d O i ti l l l d deeply entrenched l t h d across the organization. Continuously communicated, part of employee orientation and development, development integrated into performance reviews They provided a well defined “code of behaviour” which made it easier to make quick decisions that everyone supported. Do what’s right: It was clear that putting consumers above financial interest was paramount Dare to be transparent: Drove us to be proactive and transparent with communications Sharing, Sharing trusting and admitting mistakes: Required us to immediately and publicly accept responsibility 12
  13. 13. Take Accountability and Placing C Consumers Fi t First Recognition from the outset that this tragedy was our doing and that we had to immediately take responsibility Being accountable also placed responsibility on us to identify the problem, fix it and then change our food safety practices. This provided the basis for all communications Placing consumers and public interests first Our decision to close the plant and recall all products was unprecedented and magnified financial impact, but reduced any potential f t t ti l future risk to the public i k t th bli 13
  14. 14. Lead in Transparent & Fact Based C i ti Communication Communication Team Led by CEO and small group of staff and advisors Did not over-think strategy, messages, or tactics Lead ith information th public wants and fill th void L d with i f ti the bli t d the id Fact Focused Critical to quickly and accurately understand the facts to respond to consumer concerns and put risk in context Identified internal and external resources to navigate through the science and provide independent, credible third part perspective 14
  15. 15. Public Outreach Employ a Variety of Mediums Media tours of plant (before and after outbreak) to rs o tbreak) Recalled product photos on website Photos and footage of plant available on website Five press conferences/news releases p Investor conference call Full page ads in national newspapers TV Ads – also used social media (YouTube) Major M j expansion of consumer h tli response t i f hotline team Food safety microsite developed on mapleleaf.com Technical briefings for customer QA personnel and media Listeria Fact Sheet and Food Safety Tips sent to dieticians across Canada; y p ; podcast on website Media tour with regional nutritionists/medical experts 15
  16. 16. Internal Outreach Employee impact was significant Shock, grief and remorse Fully accept g y p gravity of situation; deliver continuous y ; information to our people and encourage dialogue 2-3 weekly email updates from CEO Weekly ll W kl all-employee conference calls at h i ht of crisis l f ll t height f i i Ambassador program (Fact Sheets, Q&As and coupons for friends and family) Conference calls for sales force – included presentation from expert on Listeria and food safety Employee survey in late March reflects engagement increased to 96% percentile of leading global companies 16
  17. 17. Be Prepared Formalize institutional learning Crisis Preparedness Plan Who is on the team? Key contacts – internal, customers, suppliers, media, Processes Tools government Template materials (letters, news T l t t i l (l tt release, Q&A, employee notice, customer communications) Levels of communication identified based on severity of situation Recall Team Third party experts p y p Annual crisis simulations 17
  18. 18. Implement Decisive Action Plan Immediately appointed a Recall Team and Project y pp j Manager with accountability for complex and multi- functional Recall Team activities CEO, CFO, Executive business leaders, Communications, Regulatory, G R l t Government Relations, S l t R l ti Sales, Mi bi l i t Microbiologists Twice daily calls with all activities mapped and tracked daily Everyone hears the same information at the same time; action items quickly addressed Continuous reporting of test results at all packaged meat plants Daily calls continue as best practice to maintain highest standard of food safety diligence Apply the same “crisis team” approach and discipline to other issues, like SARS and H1N1 18
  19. 19. Lessons Learned Importance of accepting responsibility Apology immediately upon linkage to illness and death CEO established a human face to the Company and direct accountability Lead with the facts and be transparent Develop a basis for trust with public and media (media tour of plant) Assign accountability to one person to build the facts quickly Have communication vehicles in place to facilitate communications CEO Weekly N t employee conference calls W kl Note; l f ll No external blogs increased reliance on media Use of social media and television More than 90,000 hits on YouTube TV most effective conventional medium to reach public Importance of research to improve communications Focus groups F Broader marketing and corporate reputation surveys 19
  20. 20. Lessons Learned Immediacy of communications y Press conferences in ASAP mode (Sat 10:00PM; Sunday afternoon, etc) Don’t over think things – get out with information when you have it Ensure bilingual capabilities No readily accessible qualified internal French spokesperson weakened our response in Quebec Leverage external experts Identify expert spokespeople in advance of a crisis if possible and ensure they are media trained Build strong relationships with consultants who understand your business and can provide support i times of crisis id in i f i i Maintain communications momentum post-crisis Once crisis is over, more caution and process takes over communication Continue communications post-crisis to speed recovery 20
  21. 21. Regaining Consumer Confidence Claimed purchase and purchase Consumer Awareness of Recall over intent i t t are strengthening t th i and problem is solved d bl i l d 4-Sep 7-Oct 30-Oct 1-Dec 1-Jan 1-Mar 21 Source: Hotspex Opinion tracker - Based on polling results of Maple Leaf brand users
  22. 22. The Path Forward Settled class action lawsuits quickly and fairly q y y Implemented a food safety program that is best practice in North America Rigorous testing and environmental monitoring p g g g g program Building a food safety culture, supported by communications Appointed Dr. Randy Huffman as Chief Food Safety Officer Responsible for establishing Maple Leaf as a global food safety leader Supporting public education on food-borne pathogens & food safety Communicating Listeria to high risk groups Advocating f consistent higher standards across the industry for Active participation in federal food safety investigations Industry wide workshops on food safety issues to foster collaboration 22
  23. 23. Summary Public face of CEO is critical to accept accountability and maintain public trust Actions and communications must be based on strong values – transparent, fact based and proactive Place consumer interests first and follow through with actions Moving from crisis to leadership in global food safety Ongoing public education a priority in the “new normal” of Listeria testing and regulations g g 23
  24. 24. Authentic Leadership and Crisis Reputation Management Dr. Terence (Terry) Flynn, APR, FCPRS and Dave Scholz, MA The Purchase Process • Research Proposal 2 24 69 Yonge St. Toronto, ON. M5E 1K3 • Tel. 416.815.0330 • Fax. 416.815.0393 • legermarketing.com
  25. 25. Firehouse Research Objective: To get into the field quickly, and then over time, to assess how C h Canadians were responding t MLF’ crisis communications di di to MLF’s i i i ti strategies. Five Phases: August 27-September 2 2008 A t 27 S t b 2, September 26-29, 2008 January 8-12, 2009 February 2 – M h 3 2009 ( F b 27 March 3, (post WR)*** May 26 – May 31, 2009 Representative survey (N=1500+) reflective of age, gender and province – t t l participants 7,721. i total ti i t 7 721 Margin of error for a sample of this size is +/- 2.1% 19 times out 20. Used the same 10 questions for each survey The Purchase Process • Research Proposal
  26. 26. Purchase Behaviour (Previous 6 Months) The Purchase Process • Research Proposal
  27. 27. Awareness The Purchase Process • Research Proposal
  28. 28. Video Awareness The Purchase Process • Research Proposal
  29. 29. Reputation Ratings The Purchase Process • Research Proposal
  30. 30. Spokesperson Credibility The Purchase Process • Research Proposal
  31. 31. Cares About Public Safety The Purchase Process • Research Proposal
  32. 32. Trust That They Will Do What They Say The Purchase Process • Research Proposal
  33. 33. Likelihood to Purchase (1 Month) The Purchase Process • Research Proposal
  34. 34. Likelihood to Purchase (6 months) The Purchase Process • Research Proposal
  35. 35. GO x PH x Impact The Purchase Process • Research Proposal
  36. 36. Reputation Capital Restored Recall Law Suit Settled Market Cap Aug 1/08 $1.43 billion Jan 26/09 $1.57 billion The Purchase Process • Research Proposal
  37. 37. Stuff Happens! February 25th – MLF issues a Weiner Recall Quarantined product shipped to stores (ON, NB, (ON NB NL) Question – how will the public respond to thi t this recall? ll? The Purchase Process • Research Proposal
  38. 38. How Did The Markets React? The Purchase Process • Research Proposal
  39. 39. How Did The Public React? Wave 1 Wave 2 Wave 3 Wave 4 Wave 5 Good 46 55 63 57 (-6) 66 (+9) Opinion Bad 38 29 23 26 (+3) ( 3) 20 (-6) ( 6) Opinion Credible 74 79 74 71 (-3) 73 (+2) Cares 71 72 71 68 (-3) ( 3) 71 (+3) Trust 61 74 72 68 (-4) 72 (+4) IP/1 21 34 47 41 (-6) 51 (+10) Month IP/6 40 46 54 49 (-5) 58 (+9) Months The Purchase Process • Research Proposal
  40. 40. REPUTATION RESTORED The Purchase Process • Research Proposal 40
  41. 41. A Living Case Study Strong crisis leadership Legal and fi L l d financial considerations t k a i l id ti took backseat Took T k personal responsibility l ibilit Committed to safety of customers Settled Class A ti S it S ttl d Cl Action Suits Committed to their values 1. Do what’s right 6. Dare to be transparent The Purchase Process • Research Proposal
  42. 42. So What Does Mean For Your Company or Your Clients? They need to recognize that they are now in a p y g y pre-crisis state -- Crises happen everyday pp y y Crisis/Reputation Dashboard They need to develop a crisis issues anticipation system – assassin teams Issues tracking They need to develop strong relationships with their priority publics Ongoing stakeholder tracking surveys Measurable public relations programs They need to anticipate, prepare and practice (and practice and practice…) anticipate practice ) They need to be ready to communicate…now (make sure that you have organizational managers that have been trained, evaluated and are ready to go). Spokesperson testing They need to live their values – honesty, transparency, safety Internal engagement surveys They need to realize that a crisis plan is necessary but not sufficient! The Purchase Process • Research Proposal
  43. 43. Questions/Comments The Purchase Process • Research Proposal

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