Crisis
Management
in the World
   of Food
     Borne
    Illness

    Pamela J. Ritz, ARM, SPHR, CRM, HACCP
    President
...
SRM has created a closely integrated
team with expertise in the areas of:


  – Food Law
  – Public Health Law
  – Communi...
Prevention
• 100% of our
  prevented cases
  happen within a
  matter of hours of
  the first Health
  Department
  contac...
Presently 11,000 to 12,000 Interactions per
Year on “Media”-Based Events


Food Borne        Recall                   Summ...
Food Borne Crisis – “Plug In”
                        Public
      Marketing
                       Relations
      Intern...
1. Current Trends –
   What’s Hot Now
2. Prevention / Control
3. Controversial –
   “Pammie Dearest’s”
   Future Predictions
Current Trends -
What’s Hot Now
Even If You Are Doing Everything You Can to
Monitor your Employee’s Health and Exclude any
Symptomatic Employees …


Scena...
Illness is Building …
HD - Slow to Respond …
•   Week 1 (total of 9 ill guests, 1 ill employee)
     –   Sunday:      - Cu...
Warning Signs are often missed…
•   Week 3 (total of 24 ill guests, 2 ill employees)
     – Sunday:       - 9 guests eat -...
“Laissez Faire” (hands off)
Health Department – Hep A
                       • Friday, 5 p.m.: Health
                    ...
Media Nightmare Cycle & Upset
Customer Eruption
• Week 1
  – Friday afternoon
     •   5:00    - Press Release – Health De...
– Sunday – Private clinics established by
                                 restaurant for testing/shots
                  ...
HD / Media Problems We
Currently See…
• Customers hear “Hepatitis” or
  “Norovirus” – demand treatment
• “Fecal/oral” rout...
Crisis Management Environment
     • Friday night press releases – weekend
       catastrophes
     • Coordination of nati...
Dollar Costs to the
    Community…or will it be you?
•   Scenario: Patrons wait 3 hours
    for Hep A inoculations
     – ...
Health Departments may Regulate
our Restaurants but …

Public Health Law mission statement:

   … The board shall exercise...
Public Health Varies by State -
Will Impact Your Event

  Tennessee   Georgia         California                          ...
American’s Demand Healthcare
Increasing Phenomenon
• Most don’t know personal vaccine history
• Want to be tested or treat...
Our First Hurdle Towards
Rebuilding Business Traffic




  Customers want:      Business
     Attention      Recovery Effo...
After the Initial Shock of Media Events the
Issues of “Liability” and BI Intertwine


                                    ...
It’s Simply Enough…
      Restaurants and hospitality are uniquely
     vulnerable to any one of the 35 reportable
       ...
Commonality is Enough to
Generate a Health Department
Investigation

                Doctor
Sick Customer
                ...
The 1999 Federal Food Code
Transferred all Responsibility to
the Restaurant Manager
• Managers are expected to know:
  –  ...
The Big “5”

2005
• Federal Food Code changed
• Laboratories upgraded
• New abilities to diagnose
• “Old Disease” will loo...
Public Health Science v.
Traditional Product Testing
                • Expectation – “food is long
Public Health     gone”...
PFGE Patterning / RNA Sequencing
Technology is Catching Up

           • Health authorities using
             science of ...
Complications – Compressed Operating
Environments for Restaurants
 • Enjoying recent abilities to                         ...
Smack Down (pleeeeaase)

            • “I cannot comment on
              matters involving
              litigation” – CO...
Radical Legal Principles in Food
Borne Illness Events - Product Liability
 • Customers are entitled to “actual
   damages”...
Prevention / Control
Prevention: (Actual Event)
The Phone Rings
   “We have taken
 samples from your
 ice machine along
       with other
  res...
Creating the
“Ick” Factor
Thru “Junk
Science”

               • Making news on a slow
                 day…
              ...
Can the media just say
anything they want to?




      No!!
      No!!
You still can’t yell fire in a crowded theater
   ...
There are Laws that Govern
the Publication of Information

• “Libel law” - basics
  still apply
• “Truth” is the
  media’s...
Reporters Think About the Factors
that “Ping” the Ear of the Public

•   Am I affected?
•   Unknown effects
•   Caused by ...
Media Prevention Work Means
Playing a Game of “Brinksmanship”

          • Don’t drop into media
            training here...
Return Call to Reporter…”Let’s
Test Your Science…Buddy”

• So I know that there are natural coliforum
  counts in public w...
Goal: Prevent our Brand Name from
Being Mentioned – or Article Published

  OUTCOME




                 NO MEDIA EVENT
  ...
The Weight of “Truth” –
Prevention Strategy for “Brand
Impact” Protection
  Be prepared - 2008 Junk Science Trend




    ...
We Slip into “Media” Training
Sometimes too Quickly
            • There is a natural
              “surface tension” in an...
“Privacy” has Some Strength
as a Tool in Brand Protection
• Customer calls the
  media with a report of a
  food borne ill...
Truth – In the “Food Borne Illness”
World it means Health Department
Involvement

• Discipline
  – “I’d love to talk with ...
Switching Gears:
    Basic Truths During any Food Borne
    Illness Event – Public Events
                                ...
The Majority of Your Time is Spent
on Advertising and Branding

 • For our brands – it’s “reflex” now
   – Reach
   – Spre...
We Know Who and What we are
(Reacting to “Pain” or “Reality”)
• It’s just painful to hear / see:
   – “Popular local eater...
Internal Communication is also
 Important
• Food borne illness
  media events will
  impact our sales
• “Responding” is a
...
How to Handle the Media –
     Books are Written about it
     • There is no magic “structure”
     • Too often we think:
...
Non-Traditional Marketing /
PR
• PR’s role is shaped everyday by the crisis
  management meeting
• You will be learning “t...
Technology in U.S. gives us some natural
limitations on “who hears story”
  Broadcast Bands License for a “Fixed” Distance...
Financial Results - Not Brand
Surveys
$60,000                                          $60,000




$50,000                ...
It is Always a Shock –
But Success in Crisis Management is
Measurable
Success is… • Minimizing the financial drop
        ...
Crisis Management is About
Continuously Affecting/Reducing Loss
– Mentally Prepare Yourselves

         Food Borne
       ...
Controversial
    “Pammie
     Dearest’s”
Future Predictions
History:
CDC Data 1996-2006 10 YEARS
  “Supplier Events”             “Restaurant
                               Caused Eve...
There are Often 2 Waves of
Media Events




      Health        Plaintiff Attorney
 Department Press   Special Interest
  ...
“E-Coli Lawyer Cleans Up, Makes
Good Money from Bad Food”
(article from Associated Press 2/5/08)




                     ...
Science is tightening the noose
 Salmonella Reduction Initiative
 Salmonella Reduction Initiative
    2008 FSIS //FDA Init...
We have to think about more seamless
approaches to “worst case”
• Collision course:
  – (BI) Insurance agents pushing for ...
Think About the Worst Case
Death – Disability – Customer Injury

We want our suppliers sitting
beside us at the Defense Ta...
Any Loss      Any Supplier Loss
Transferred to     Transferred
Insurance will
Mean Lawsuit       Insurance
               ...
100% of all Food Borne Illness
Restaurant Outbreaks Result in
Inspections

 • Health Department
   Inspection
            ...
Media Nightmare – Disclosure and
Managing conflict in the media eye.




                       © Copyright All Rights Res...
We Know How Product Liability
Law Works – Lock Attorneys in a
Room


                                   Contracts
   Decid...
Back to Basics - Contracts
• How do we want to do business anticipating
  liability?
• Car companies went through the same...
THANK YOU!




   Pamela J. Ritz, ARM, SPHR, CRM, HACCP
   President
   Specialty Risk Management, Inc.
                  ...
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Putting Out The Fire: When A Crisis Occurs

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Putting Out The Fire: When A Crisis Occurs

  1. 1. Crisis Management in the World of Food Borne Illness Pamela J. Ritz, ARM, SPHR, CRM, HACCP President Specialty Risk Management, Inc. ® May 16, 2008
  2. 2. SRM has created a closely integrated team with expertise in the areas of: – Food Law – Public Health Law – Communicable Disease/Pathology – Product Recall – Media – Marketing Response – Customer Response – Employment Practices – Business Recovery – Contracts – Insurance © Copyright All Rights Reserved SRM, Inc. © 2008
  3. 3. Prevention • 100% of our prevented cases happen within a matter of hours of the first Health Department contact • However, 5% slip through to “public/media events” … TIME IS OF THE ESSENCE! © Copyright All Rights Reserved SRM, Inc. © 2008
  4. 4. Presently 11,000 to 12,000 Interactions per Year on “Media”-Based Events Food Borne Recall Summary Illness Manufacturers 1997 - 2008 2002 - 2008 • 41% Customers • 38% Company Crisis Management • 6% Insurance Carriers • 4% Health Department Interactions Interactions • 5% Media • 3% Medical 73,937 4,328 • 2% Law Firms • 1% Lab © Copyright All Rights Reserved SRM, Inc. © 2008
  5. 5. Food Borne Crisis – “Plug In” Public Marketing Relations Internal or External Human Goals Resources • Integrate • Take on character of Quality company Assurance/ Health Risk • Uniquely Management/ Department Insurance mold to each Carrier(s) event Restaurant • Be invisible Management Corporate Management • Earn our place Increase Effectiveness © Copyright All Rights Reserved SRM, Inc. © 2008
  6. 6. 1. Current Trends – What’s Hot Now 2. Prevention / Control 3. Controversial – “Pammie Dearest’s” Future Predictions
  7. 7. Current Trends - What’s Hot Now
  8. 8. Even If You Are Doing Everything You Can to Monitor your Employee’s Health and Exclude any Symptomatic Employees … Scenario: A “Regular” customer (retiree) walks into your restaurant and seats himself at his usual table. On his way, he stops to grab his own silverware accidentally touching other pieces of silverware. Little does he know he is a carrier of Norwalk virus … He visits with his favorite wait staff. She has been an acquaintance and server for almost two years. He finished his meal and she clear the dishes while serving his final cup of coffee… © Copyright All Rights Reserved SRM, Inc. © 2008
  9. 9. Illness is Building … HD - Slow to Respond … • Week 1 (total of 9 ill guests, 1 ill employee) – Sunday: - Customer infected with Norovirus eats at restaurant – Wednesday: - Server calls in sick – Thursday: - Server returns to work – Saturday: - 8 guests eat – sick within 48 hours (Server working) • Week 2 (total of 45 ill guests, 13 ill employees) – Sunday: - 14 guests eat – sick within 48 hours (Server working) – Monday: - 3 employees call in sick - 3 guests eat – sick within 48 hours – Tuesday: - 6 employees call in sick - 6 guests eat – sick within 48 hours – Wednesday: - 2 employees call in sick – Thursday: - 9 guests eat – sick within 48 hours – Friday: - Employee calls in sick - First inspection related to customer complaints – HD gets involved – Saturday: - Employee calls in sick - 13 guests eat - sick within 48 hours © Copyright All Rights Reserved SRM, Inc. © 2008
  10. 10. Warning Signs are often missed… • Week 3 (total of 24 ill guests, 2 ill employees) – Sunday: - 9 guests eat - sick within 24 hours – Monday: - SRM receives call from restaurant for help - 1 employee calls in sick - 4 guests eat – sick within 24 hours – Tuesday: - 1 employee calls in sick - 3 guests eat – sick within 24 hours – Wednesday: - 4 guests eat – sick within 24 hours – Thursday: - 1 guest eats – sick within 24 hours – Friday: - 3 guests eat – sick within 24 hours - Confirmed death from complications - Restaurant closes – Saturday: - Media circus begins - Intense cleaning • Week 4 – Sunday: - Intense cleaning – Monday: - Re-inspection – Tuesday: - Re-opened restaurant 100 sick 8 hospitalized 1 death © Copyright All Rights Reserved SRM, Inc. © 2008
  11. 11. “Laissez Faire” (hands off) Health Department – Hep A • Friday, 5 p.m.: Health Department Press Release Scenario: – “The County Health Department has Employee travels learned that a worker with confirmed internationally – infectious Hepatitis A worked while unknowingly ill at “our” restaurant. exposed to Hep A – People who dined at this restaurant between March 14 and March 25 contact their local Health Department or healthcare provider for assessment and vaccination. – A vaccination clinic will be set up next week. It is strongly recommended all over 12 months obtain the vaccine. – Symptoms for Hep A are … © Copyright All Rights Reserved SRM, Inc. © 2008
  12. 12. Media Nightmare Cycle & Upset Customer Eruption • Week 1 – Friday afternoon • 5:00 - Press Release – Health Department goes home • 5:30 - 60 phone calls to restaurant • 6:00 - Local news continues • 7:00 - Calls from weekend reporters • 8:00 - Cameras rolling in parking lot • 10:00 - Return calls to local media complete – Saturday • Customer hotline running • Customers (eating 14th, 15th, want testing and shots) • Health Department available for one (1) call Saturday with company – vaccine / IG harder to find than realized, maybe no clinic or maybe Wednesday • More cameras rolling out front • No private physician has vaccine / IG • All employees inoculated/tested © Copyright All Rights Reserved SRM, Inc. © 2008
  13. 13. – Sunday – Private clinics established by restaurant for testing/shots – Monday (within 48 hrs) The rest • By 8:30 a.m. 2300 customer calls over weekend • Media stories Monday of the – Tuesday • Starting arrangements for >155 customers story… shots from California, Canada, Florida – 22 states total • Media stories Tuesday – Wednesday • H.D. slates one day for shots – only 1000 shots available – run out in a matter of hours 9,700 Total Interactions • Stampede of customers as they rush to private clinics for shots – only to wait for hours No restaurant closure! due to long lines – “standing room only” – “wall to wall” people • Media (big) – “not enough shots” 85% in revenue – Thursday - Customer calls – follow up – Friday – Customer calls – follow up 1 employee ill • Week 2 No other employees (ill) – Saturday No ill customers • Health Department gives another 250 shots • Customers also want testing © Copyright All Rights Reserved SRM, Inc. © 2008
  14. 14. HD / Media Problems We Currently See… • Customers hear “Hepatitis” or “Norovirus” – demand treatment • “Fecal/oral” route stalls business • Workers with Hep A “worked while ill” (customer anger) • “Contact your local Health Department or Healthcare Provider – You’re Exposed” • Delayed response after press announcements – 5 to 7 days even in a pro-active HD setting Copyright © 2008 SRM , Inc. and its licensors. All rights reserved. ®
  15. 15. Crisis Management Environment • Friday night press releases – weekend catastrophes • Coordination of nationwide needs • Availability of “serum” • Testing/treating your own employees – pre-requisite for restaurant re-opening • “Cash strapped” Health Departments are charging for services Copyright © 2008 SRM , Inc. and its licensors. All rights reserved. ®
  16. 16. Dollar Costs to the Community…or will it be you? • Scenario: Patrons wait 3 hours for Hep A inoculations – **“One elderly woman fainted in line and was taken to a hospital” – **“’They expected several thousand people, but it looks like half of Arlington is here’, said Wayne Springer, the deputy fire chief.” • Customers expect • Total Inoculations treatment Given (2 wks customers): 3800 • Insurance carriers • Cost per Inoculation: x $35-$75 may not cover • Total Cost of • “Tax Dollar Inoculations: $133,000- $285,000 Expenditure” outrage Copyright © 2008 SRM , Inc. and its licensors. All rights reserved. ** As reported by The Boston Globe, 6/19/04 ®
  17. 17. Health Departments may Regulate our Restaurants but … Public Health Law mission statement: … The board shall exercise its power in matters relating to protecting the public health to prevent the introduction of disease into the state… including anything necessary or expedient to promote health or suppress disease… No thought for revenue/expense impact No after-hours/weekend support Law allows unlimited use of media Copyright © 2008 SRM , Inc. and its licensors. All rights reserved. ®
  18. 18. Public Health Varies by State - Will Impact Your Event Tennessee Georgia California New Jersey 3 Regions Single Strong Cities + Coordination Overlapping – not a “Agencies” Divided by “Monolithic” County Force Copyright © 2008 SRM , Inc. and its licensors. All rights reserved. ®
  19. 19. American’s Demand Healthcare Increasing Phenomenon • Most don’t know personal vaccine history • Want to be tested or treated • Internet tells them about disease / treatment • Customers want a place to go for help – immediately • “High end” customers – demanding • “Inoculations / vaccine” not on hand at treating physicians • What are you going to do? Copyright © 2008 SRM , Inc. and its licensors. All rights reserved. ®
  20. 20. Our First Hurdle Towards Rebuilding Business Traffic Customers want: Business Attention Recovery Efforts Treatment Copyright © 2008 SRM , Inc. and its licensors. All rights reserved. ®
  21. 21. After the Initial Shock of Media Events the Issues of “Liability” and BI Intertwine The longer an Business Insured Income recovery remains as a requires source of “getting out” “public of the public contempt” the consciousness longer the BI event © Copyright All Rights Reserved SRM, Inc. © 2008
  22. 22. It’s Simply Enough… Restaurants and hospitality are uniquely vulnerable to any one of the 35 reportable diseases Sick Employee Health Restaurant Treatment Doctor Department Report Cycle is Defined by Law © Copyright All Rights Reserved SRM, Inc. © 2008
  23. 23. Commonality is Enough to Generate a Health Department Investigation Doctor Sick Customer Report Treatment Doctor Sick Customer Report Health Common Treatment Department Restaurant Sick Customer Doctor Treatment Report Restaurants are vulnerable to special risks Copyright © 2008 SRM , Inc. and its licensors. All rights reserved. ®
  24. 24. The 1999 Federal Food Code Transferred all Responsibility to the Restaurant Manager • Managers are expected to know: – Any employees diagnosed – Any employees with symptoms – Any employees previously ill – Any employees with sick family members or who have recently traveled outside U.S. Hepatitis, Salmonella, E-Coli, Shigella were the focus (Employees as ‘Carriers’) Copyright © 2008 SRM , Inc. and its licensors. All rights reserved. ®
  25. 25. The Big “5” 2005 • Federal Food Code changed • Laboratories upgraded • New abilities to diagnose • “Old Disease” will look like a “new” problem • Most common Media events Copyright © 2008 SRM , Inc. and its licensors. All rights reserved. ®
  26. 26. Public Health Science v. Traditional Product Testing • Expectation – “food is long Public Health gone” – illness onset time periods • No actual contaminated food Food is required to complete investigations Borne • Food testing advances may not even address (especially Illness virus) assumes: • Food Code changed in 1999 & 2005 you should be there Copyright © 2008 SRM , Inc. and its licensors. All rights reserved. ®
  27. 27. PFGE Patterning / RNA Sequencing Technology is Catching Up • Health authorities using science of “victims” and statistics – Homeland Security money has dramatically improved state labs – “Pulse Net” now tracking all pathogens - E. Coli, Shigella, Salmonella, Hep A – States now ID Norovirus Copyright © 2008 SRM , Inc. and its licensors. All rights reserved. ®
  28. 28. Complications – Compressed Operating Environments for Restaurants • Enjoying recent abilities to “Send negotiate insurance premiums Money” • Property/casualty coverage must be “tested” for “restaurant” industry readiness • Lawsuits – sick customers don’t help – media impact • Standard carriers don’t have to pay for your business losses Copyright © 2008 SRM , Inc. and its licensors. All rights reserved. ®
  29. 29. Smack Down (pleeeeaase) • “I cannot comment on matters involving litigation” – COME ON! • Give American people some credit • “We have given individualized attention to each and every customer – there has never been a need to file a lawsuit.” Copyright © 2008 SRM , Inc. and its licensors. All rights reserved. ®
  30. 30. Radical Legal Principles in Food Borne Illness Events - Product Liability • Customers are entitled to “actual damages” under strict liability law • You can “render aid” during ongoing investigations without “admitting liability” • There will always be a “written report” by Health Department • Enough science to rule out most “fakers” Copyright © 2008 SRM , Inc. and its licensors. All rights reserved. ®
  31. 31. Prevention / Control
  32. 32. Prevention: (Actual Event) The Phone Rings “We have taken samples from your ice machine along with other restaurants in the city. We found coliforum counts. Do you have any comments?” © Copyright All Rights Reserved SRM, Inc. © 2008
  33. 33. Creating the “Ick” Factor Thru “Junk Science” • Making news on a slow day… – Health Department is not involved – No customers have complained – Now what? © Copyright AllAll RightsReserved SRM, Inc. © 2008 © Copyright Rights Reserved SRM, Inc. © 2008
  34. 34. Can the media just say anything they want to? No!! No!! You still can’t yell fire in a crowded theater © Copyright All Rights Reserved SRM, Inc. © 2008
  35. 35. There are Laws that Govern the Publication of Information • “Libel law” - basics still apply • “Truth” is the media’s only defense • “Privacy” is another barrier © Copyright All Rights Reserved SRM, Inc. © 2008
  36. 36. Reporters Think About the Factors that “Ping” the Ear of the Public • Am I affected? • Unknown effects • Caused by employees • Caused by restaurant • Companies we know Media reaction / • Children, elderly, pregnant consumer fear women angles (death or injury) © Copyright AllAll RightsReserved SRM, Inc. © 2008 © Copyright Rights Reserved SRM, Inc. © 2008
  37. 37. Media Prevention Work Means Playing a Game of “Brinksmanship” • Don’t drop into media training here • Dialogue – chat only • Stay in touch (you’ll have another opportunity …) • Do the science (internally) • If you comment - it becomes the “truth” © Copyright AllAll RightsReserved SRM, Inc. © 2008 © Copyright Rights Reserved SRM, Inc. © 2008
  38. 38. Return Call to Reporter…”Let’s Test Your Science…Buddy” • So I know that there are natural coliforum counts in public water supplies – how does ours compare? • “We will want to test, too. Let me compare processes – water testing requires sterile containers obtained from labs with time periods strictly maintained for submission.” © Copyright All Rights Reserved SRM, Inc. © 2008
  39. 39. Goal: Prevent our Brand Name from Being Mentioned – or Article Published OUTCOME NO MEDIA EVENT © Copyright All Rights Reserved SRM, Inc. © 2008
  40. 40. The Weight of “Truth” – Prevention Strategy for “Brand Impact” Protection Be prepared - 2008 Junk Science Trend • Coliform Bacteria • “Aerobic Plate Counts” • Fecal Coliform © Copyright AllAll RightsReserved SRM, Inc. © 2008 © Copyright Rights Reserved SRM, Inc. © 2008
  41. 41. We Slip into “Media” Training Sometimes too Quickly • There is a natural “surface tension” in any news story called “truth” • If you break it with volunteered information – “game’s on” • Don’t remove the “burden” of truth in how you interact © Copyright All Rights Reserved SRM, Inc. © 2008
  42. 42. “Privacy” has Some Strength as a Tool in Brand Protection • Customer calls the media with a report of a food borne illness • Reporter calls – “Would your restaurant like to comment?” © Copyright AllAll RightsReserved SRM, Inc. © 2008 © Copyright Rights Reserved SRM, Inc. © 2008
  43. 43. Truth – In the “Food Borne Illness” World it means Health Department Involvement • Discipline – “I’d love to talk with you … have you talked with the Health Department? Who (name)?” – “What did they say?” – “Can I call you back?” © Copyright All Rights Reserved SRM, Inc. © 2008
  44. 44. Switching Gears: Basic Truths During any Food Borne Illness Event – Public Events • Must know / understand the Health Department message first • If there is a message – they must know your plan • Health Departments now have PR spokesman – you have to seek them out during events • If there is no ongoing investigation, then there is NO © Copyright All Rights Reserved SRM, Inc. © 2008validated illness © Copyright All Rights Reserved SRM, Inc. © 2008
  45. 45. The Majority of Your Time is Spent on Advertising and Branding • For our brands – it’s “reflex” now – Reach – Spread – Surveys and analysis – Who “we” are, what “we” serve, who buys our “stuff” (inside Brand Loyalty) © Copyright All Rights Reserved SRM, Inc. © 2008
  46. 46. We Know Who and What we are (Reacting to “Pain” or “Reality”) • It’s just painful to hear / see: – “Popular local eatery sickens hundreds” – “Tune in at 6 – eating at the most popular place in town could just be your last meal” • Your officers are mad • Your largest investors are shocked • Your founder wants to fight back © Copyright All Rights Reserved SRM, Inc. © 2008
  47. 47. Internal Communication is also Important • Food borne illness media events will impact our sales • “Responding” is a long term commitment = . day/week/months • Measure financial impact in context • Yes - It will cost us money © Copyright All Rights Reserved SRM, Inc. © 2008
  48. 48. How to Handle the Media – Books are Written about it • There is no magic “structure” • Too often we think: – Being “open” or “available” – Get our “media trained staff” out there – Interviews at the restaurant – Get the press releases out far and wide © Copyright All Rights Reserved SRM, Inc. © 2008 © Copyright All Rights Reserved SRM, Inc. © 2008
  49. 49. Non-Traditional Marketing / PR • PR’s role is shaped everyday by the crisis management meeting • You will be learning “technical” knowledge during an event • “Get in” and “get out” of the press for a reason • Control your “reach” and “spread” • Prevent it if you can, of course © Copyright All Rights Reserved SRM, Inc. © 2008
  50. 50. Technology in U.S. gives us some natural limitations on “who hears story” Broadcast Bands License for a “Fixed” Distance Impact restricted to “need to know area” for mandated action © Copyright All Rights Reserved SRM, Inc. © 2008
  51. 51. Financial Results - Not Brand Surveys $60,000 $60,000 $50,000 $50,000 $40,000 $40,000 $30,000 $30,000 $20,000 $20,000 $10,000 $10,000 $0 $0 Affected Location Nearby Location $60,000 $60,000 $50,000 $50,000 $40,000 $40,000 $30,000 $30,000 $20,000 $20,000 $10,000 $10,000 $0 $0 Other Location Other Location Year to Year Revenue of Location Tells us How to Rebuild Business Copyright All Rights Reserved SRM, Inc. © 2008 ©
  52. 52. It is Always a Shock – But Success in Crisis Management is Measurable Success is… • Minimizing the financial drop • Limiting the spread • Focusing on how fast we recover Actions Affect Recovery Copyright © 2008 SRM , Inc. and its licensors. All rights reserved. SM
  53. 53. Crisis Management is About Continuously Affecting/Reducing Loss – Mentally Prepare Yourselves Food Borne Illness Event Business Response Plans - Integrating Gov’t Control / Marketing Concepts Pathology to Increase Dialogue Business Flow Immediate 1-800 Customer Response Reduce Media Gov’t Control / Pathology Dialogue Integrated Effort/Expertise © Copyright All Rights Reserved SRM, Inc. © 2008
  54. 54. Controversial “Pammie Dearest’s” Future Predictions
  55. 55. History: CDC Data 1996-2006 10 YEARS “Supplier Events” “Restaurant Caused Events” 66 Events 6,000 Events 8,520 258,168 Customer Illnesses Customer Illnesses Current Pre-Occupation with “Supply Chain” Issues © Copyright All Rights Reserved SRM, Inc. © 2008
  56. 56. There are Often 2 Waves of Media Events Health Plaintiff Attorney Department Press Special Interest Events – Stories – Media Reactions Media Reactions © Copyright All Rights Reserved SRM, Inc. © 2008 © Copyright All Rights SRM, Inc. © 2004
  57. 57. “E-Coli Lawyer Cleans Up, Makes Good Money from Bad Food” (article from Associated Press 2/5/08) Highest Plaintiff Attraction - Restaurant Events + Supplier Issues © Copyright All Rights Reserved SRM, Inc. © 2008
  58. 58. Science is tightening the noose Salmonella Reduction Initiative Salmonella Reduction Initiative 2008 FSIS //FDA Initiative 2008 FSIS FDA Initiative CDC Posting PulseNet Comparisons PFGE PFGE Factory Human Illness / Product Sampling Outbreak Sampling © Copyright All Rights Reserved SRM, Inc. © 2008
  59. 59. We have to think about more seamless approaches to “worst case” • Collision course: – (BI) Insurance agents pushing for risk transfer for financial loss – (GL) Insurance agents pushing for risk transfer for liability loss – Corporation is pushing coverage and low cost © Copyright All Rights Reserved SRM, Inc. © 2008
  60. 60. Think About the Worst Case Death – Disability – Customer Injury We want our suppliers sitting beside us at the Defense Table What if we are suing them for recovery at the same time? © Copyright AllAll RightsReserved SRM, Inc. © 2008 © Copyright Rights Reserved SRM, Inc. © 2008
  61. 61. Any Loss Any Supplier Loss Transferred to Transferred Insurance will Mean Lawsuit Insurance Carrier Recovery / Subrogation Your Company Subrogation Lawsuit Supplier © Copyright All Rights Reserved SRM, Inc. © 2008
  62. 62. 100% of all Food Borne Illness Restaurant Outbreaks Result in Inspections • Health Department Inspection • Public Information Critical Violation – How much are you at Critical Violation fault? Critical Violation – What ammunition will be in Health Department investigation? © Copyright All Rights Reserved SRM, Inc. © 2008
  63. 63. Media Nightmare – Disclosure and Managing conflict in the media eye. © Copyright All Rights Reserved SRM, Inc. © 2008
  64. 64. We Know How Product Liability Law Works – Lock Attorneys in a Room Contracts Decide Work How do we Backwards want to defend? © Copyright All Rights Reserved SRM, Inc. © 2008
  65. 65. Back to Basics - Contracts • How do we want to do business anticipating liability? • Car companies went through the same cycles • What media agreements are integrated into contracts? • Some suppliers are our only source • How do we both survive? • QA, Purchasing, Risk Management & Public Relations – joint project © Copyright All Rights Reserved SRM, Inc. © 2008
  66. 66. THANK YOU! Pamela J. Ritz, ARM, SPHR, CRM, HACCP President Specialty Risk Management, Inc. ® May 16, 2008

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