Crisis Management: Planning for the Unthinkable

Worst-case scenario: someone dies from eating your food product. Besides being a human tragedy, it could also be fatal to your business.

Such a calamity seems remote. After all, the United States has the safest food supply in the world, and cases of death linked directly to faulty food processing are rare. Moreover, you have complete confidence in your quality control procedures.

It’s this kind of thinking that all too often leads to complacent, head-in-the-sand lack of planning for the unthinkable. Without a comprehensive crisis management plan, today’s crisis could become tomorrow’s disaster.

This is not an issue of good company vs bad. It’s a matter of good companies placing an almost exclusive emphasis on prevention vs damage control. While the old adage is certainly true—an ounce of prevention is worth a pound of cure—having no contingency for a cure, if it should be needed, can be fatal.

Consider the plights of three companies over the past three years:
• Coca-Cola Co. Last May, consumers in Belgium and France complained of feeling ill after drinking Coca-Cola products. By June, the company’s bottler in Belgium pointed to problems with the quality of the CO₂. Coke said that while the irregularities might cause headaches, nausea, and cramps, they “don’t present any health risk.”

Through June, however, illness outbreaks continued. By mid-June, Belgium banned all Coke products. Shortly thereafter, Coke advanced the theory that fungicide might be the cause of the problem, and voluntarily shut down its French bottler. After inconclusive testing and review of procedures by Coke and European health inspectors, Belgium and France lifted bans on Coke sales in late June. By the end of June, the French bottler was back in business. 

In August, however, the European Commission blasted Coke, asserting that the company had not adequately cooperated and its explanations were “not entirely satisfactory.” It also suggested that while Coke blamed suppliers outside its sphere of influence, “One cannot exclude that errors were committed in the selection of plants or the dosage of extracts in Coke’s own concentrate.” 

Coke and the European regulators appear locked in a public relations battle, made murkier by the inconclusive cause of the public health problems. For Coke, the ordeal has meant the largest product recall in its history and an incalculable stigma surrounding its beverages, made worse by the appearance of stonewalling. While no deaths have been linked to the Coke problems, it has been a major blow to public confidence in Europe.

• Sara Lee Corp. Last year, Sara Lee faced a deadly situation when its Bil Mar Foods plant in Borculo, Mich., producer of hot dogs and deli meats, was linked to an outbreak of Listeria monocytogenes. When reports first surfaced, top management convened a crisis management team to evaluate the facts and recommend the best course of action. The team comprised executives from the meat division, food safety consultants, public relations specialists, and a world-renowned epidemiologist. 

Ultimately, the company voluntarily recalled all products produced at the plant. A year later, Sara Lee shows few scars from the crisis because of its fast, effective, and thorough crisis management.

• Hudson Foods. Unlike Sara Lee, Hudson Foods did not survive its deadly crisis. In August 1997, it faced an outbreak of contamination by Escherichia coli in hamburger shipped to foodservice outlets. 

People died. But in stark contrast to the lightning-quick and total product recall response shown by Sara Lee, Hudson issued an initial protracted recall of only some 20,000 lb of meat. Ultimately, the company was forced to recall some 25 million lb, the largest recall of its kind in history. Moreover, it had no crisis management team and no crisis management plan, and it waited too long to communicate with the public. 

By the time the crisis was over, Hudson was finished. It sold soon after to Tyson, long a suitor, for far less than it would have before the outbreak erupted. 

The lesson in these case histories is simple: Plan for the unthinkable. When a crisis erupts, you have only hours to respond with crisp media communications. Waiting any longer in this age of the Internet gives the appearance of failing to act, according to Karen Berg, chief executive officer of CommCore Communication Strategies. She recommends the development of predrafted statements that allow pertinent information to be added in the event of a recall. 

Crisis management experts also recommend the following:
• Ensure that the entire management team is well versed in the attitude that the company wishes to project to the public, such as concern without admitting fault, according to Brian Meek, director of catastrophic services for Cigna Property Casualty.

• Have someone with a high degree of accountability, such as the CEO, prepped and ready to become the company’s public spokesperson regarding actions taken, Meek adds.

• Use the media to get product back. Especially where product may have been shipped to another country, maximum exposure is essential. Good media relations will help in this effort, according to Jim Dahl, managing director of the crisis management group for Kroll-O’Gara Co.

• Hold annual recall drills and design them to include all the key players, risk management consultants advise. In addition, drills should be realistic, and evaluated afterward for effectiveness.

• Analyze risk scenarios. Key players should receive training in their respective roles during a crisis. Any roles that require a third party, such as a public relations firm, should be filled in advance. These people also should be involved in the annual recall drill.

• Review, revise, and update critical record keeping, batch controls, and monitoring systems. This is a key line of defense.

• Deploy stringent environmental monitoring systems that test for contaminants on walls, floors, ceilings, and all surfaces that come in contact with the product, advises Dane Bernard, vice president for food safety programs for the National Food Processors Association.

• Carefully review and monitor consumer food safety complaints. This can be a highly effective early-warning system. 

Nobody wins in a crisis, but planning and preparation can make the difference between survival and death—not just of your company, but of consumers as well.

by PIERCE HOLLINGSWORTH
Contributing Editor