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

2009 CPRS National Conference2009 CPRS National Conference

L d hi i Diffi lt TiLeadership in Difficult Times:The Listeriosis Outbreak

Jeanette Jones, ABC, Maple Leaf Foods, , pDave Scholz, MA, Leger Marketing &

Dr Terry Flynn APR FCPRDr. Terry Flynn, APR, FCPRDave Scholz

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AgendaAgenda

• Introductions • Leadership in Difficult Times – Jeanette Jones• Crisis Research – Dave Scholz• Authentic Leadership – Dr Terry Flynn• Authentic Leadership – Dr. Terry Flynn• Discussion

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Leadership in Difficult Times

Jeanette Jones, ABCVice President, CommunicationsMaple Leaf Foods Inc.

June 9, 2009

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What happened?What happened?

In August/08 Maple Leaf initiated the largest recall in theIn 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 andfacility were found contaminated with Listeria monocytogenes and linked to illness and death • 22 deaths; 57 cases confirmed

P d t di t ib t d i il t h lth f iliti hProducts were distributed primarily to health care facilities, where people have a higher risk for contracting listeriosisTo contain risk, a decision was made to close the plant and recall ALL products back to January/08This involved a massive recall of 191 products, even though only a small number were affected

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Background InformationAbout ListeriaAbout Listeria

Six species – only Listeria monocytogenes causes human illnessp 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 pper year

Healthy adults and children are at extremely low risk

F h i i d i f i b

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For the immune compromised, pregnant or infants, it can be serious or fatal

Bartor Road RecallK Ti li d A tiBartor Road RecallK Ti li d A tiKey Timelines and ActionsKey Timelines and Actions

CurrentCurrentAug.23rdAug.23rd

Aug.-Sept.Aug.-Sept.

Sept.5th

Sept.5th

Sept.17th

Sept.17th

All facilitiesMatch found to Likely source of Plant reopened Comprehensive All facilities operating under the highest food safety protocols in North America

strain linked to illness and death. Recall voluntarily expanded

ycontamination identified; food safety enhancements implemented

and resumed production under enhanced protocols; positive findings

investigation launched by MLF with panel of experts; deep sanitization ofexpanded

(191 products)implemented positive findings

on Oct 8th

temporarily suspended distribution

sanitization of plant proceeds

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Intense Media Coverage – August 2008Intense 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 Newsy p

Killer bug tied to 7 deaths; 38 confirmed or suspected cases as outbreak ripples across province Toronto Sunoutbreak ripples across province…Toronto Sun

Tests verify Maple Leaf meats' link to outbreak. Health, food

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yagencies tie toxic strain to deaths…Toronto Star

Intense Media SpotlightIntense Media Spotlight

Media First 10 days First monthPrint 408 1,011

Broadcast 1,959 3,198

Online 233 443

Surveys showed virtually 100%awareness among Canadians of

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listeriosis crisis

Introducing a New RiskIntroducing 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 CanadiansCame 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

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Our ResponseOur ResponseOur ResponseOur Response

Demonstrate the highest level of responsibility possible

Take accountabilityTake accountability

Put public health and consumer interests firstPut public health and consumer interests first

Take accountabilityTake accountability

pp

Lead in open and fact based communicationLead in open and fact based communication

Implement decisive action planImplement decisive action plan

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Our ValuesOur Values

Maple Leaf Leaders will Always ByMaple Leaf Leaders will Always… By…

Do what’s right Acting with integrityTreating people with respectHaving an intense competitive edgeAlways challenging for better performance from better people

Be performance driven

Always challenging for better performance from better peopleSetting stretch targets; being accountable for resultsBeing fact based; objectively measuring progress & successEncouraging the freedom to disagreeRecognizing and rewarding progress & performanceMaintaining the highest level of energy & urgencyA i th i iti ti

Have a bias for action

Continuously improve

Assuming the initiativeAccepting calculated risks, without fear of failureBuilding mutually supportive teams, with decisive leadershipHating bureaucracy; fostering a lean, agile, & flexible organizationCommitting to continuously learn and teachEmbracing change as the only path to future opportunityContinuously improve

Be externally focused

Dare to be transparent

g g y p pp yBeing consumer drivenUnderstanding competitors as well as ourselvesCommunicating candidly, and in a direct mannerHaving the self confidence to operate without boundariesMaking vision and plans clear to stakeholders

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By sharing, trusting, & admitting mistakes

Values Provide CompassValues Provide Compass

O i ti l l l d d l t h dOrganizational values are clear and deeply entrenched across the organization.

Continuously communicated, part of employee orientation and development integrated into performance reviewsdevelopment, integrated into performance reviews

They provided a well defined “code of behaviour” which made it easier to make quick decisions that everyone supportedsupported.

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 trusting and admitting mistakes: Required us to

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Sharing, trusting and admitting mistakes: Required us to immediately and publicly accept responsibility

Take Accountability and Placing C Fi tConsumers 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 identifyBeing 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 firstPlacing consumers and public interests firstOur decision to close the plant and recall all products was unprecedented and magnified financial impact, but reduced any

t ti l f t i k t th blipotential future risk to the public

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Lead in Transparent & Fact Based C i tiCommunication

Communication TeamLed by CEO and small group of staff and advisorsDid not over-think strategy, messages, or tacticsL d ith i f ti th bli t d fill th idLead with information the public wants and fill the void

Fact FocusedFact FocusedCritical to quickly and accurately understand the facts to respond to consumer concerns and put risk in contextIdentified internal and external resources to navigate through the science and provide independent, credible third part perspective

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Public OutreachPublic Outreach Employ a Variety of Mediums

Media to rs of plant (before and after o tbreak)Media tours of plant (before and after outbreak)Recalled product photos on website Photos and footage of plant available on website Five press conferences/news releasespInvestor conference callFull page ads in national newspapersTV Ads – also used social media (YouTube)M j i f h tli tMajor expansion of consumer hotline response team Food safety microsite developed on mapleleaf.comTechnical 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

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Internal OutreachInternal Outreach

Employee impact was significantEmployee impact was significantShock, grief and remorse

Fully accept gravity of situation; deliver continuous y p g y ;information to our people and encourage dialogue

2-3 weekly email updates from CEO W kl ll l f ll t h i ht f i iWeekly all-employee conference calls at height of crisis

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

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Employee survey in late March reflects engagement increased to 96% percentile of leading global companies

Be PreparedBe Prepared

Formalize institutional learning

Crisis Preparedness PlanWho is on the team?

Key contacts – internal, customers, suppliers, media, government

T l t t i l (l tt

ToolsProcesses

Template materials (letters, news release, Q&A, employee notice, customer communications)

Levels of communicationLevels of communication identified based on severity of situation

Third party expertsRecall Team

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p y p

Annual crisis simulations

Implement Decisive Action PlanImplement Decisive Action Plan

Immediately appointed a Recall Team and Project y pp jManager with accountability for complex and multi-functional Recall Team activities

CEO, CFO, Executive business leaders, Communications, R l t G t R l ti S l Mi bi l i tRegulatory, Government Relations, Sales, MicrobiologistsTwice daily calls with all activities mapped and tracked dailyEveryone hears the same information at the same time; action items quickly addresseditems quickly addressedContinuous reporting of test results at all packaged meat plants Daily calls continue as best practice to maintain highest standard of food safety diligencestandard of food safety diligence

Apply the same “crisis team” approach and discipline to other issues, like SARS and H1N1

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Lessons LearnedLessons LearnedImportance of accepting responsibility

Apology immediately upon linkage to illness and deathApology immediately upon linkage to illness and deathCEO 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)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 communicationsCEO W kl N t l f llCEO Weekly Note; employee conference calls No external blogs increased reliance on media

Use of social media and televisionMore than 90,000 hits on YouTubeTV most effective conventional medium to reach public

Importance of research to improve communications F

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Focus groups Broader marketing and corporate reputation surveys

Lessons LearnedLessons Learned

Immediacy of communicationsyPress 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 capabilitiesEnsure bilingual capabilitiesNo readily accessible qualified internal French spokesperson weakened our response in Quebec

Leverage external expertsIdentify 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 id i i f i iprovide support in times of crisis

Maintain communications momentum post-crisisOnce crisis is over, more caution and process takes over communication

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Continue communications post-crisis to speed recovery

Regaining Consumer ConfidenceRegaining Consumer ConfidenceRegaining Consumer ConfidenceRegaining Consumer Confidence

Consumer Awareness of Recall over d bl i l d

Claimed purchase and purchase i t t t th i and problem is solvedintent are strengthening

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4-Sep 7-Oct 30-Oct 1-Dec 1-Jan

Source: Hotspex Opinion tracker - Based on polling results of Maple Leaf brand users

1-Mar

The Path ForwardThe Path Forward

Settled class action lawsuits quickly and fairlyq y yImplemented a food safety program that is best practice in North America

Rigorous testing and environmental monitoring programg g g p gBuilding a food safety culture, supported by communications

Appointed Dr. Randy Huffman as Chief Food Safety OfficerResponsible for establishing Maple Leaf as a global food safety leaderResponsible for establishing Maple Leaf as a global food safety leader

Supporting public education on food-borne pathogens & food safetyCommunicating Listeria to high risk groups

fAdvocating for consistent higher standards across the industryActive participation in federal food safety investigations Industry wide workshops on food safety issues to foster collaboration

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SummarySummary

Public face of CEO is critical to accept accountability and maintain public trustActions and communications must be based on strong valuesActions and communications must be based on strong values –transparent, fact based and proactivePlace consumer interests first and follow through with actionsMoving from crisis to leadership in global food safetyOngoing public education a priority in the “new normal” of Listeriatesting and regulations g g

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Authentic Leadership and

Crisis Reputation Management

Dr. Terence (Terry) Flynn, APR, FCPRS

and

Dave Scholz, MA

The Purchase Process • Research Proposal 242

69 Yonge St. Toronto, ON. M5E 1K3 • Tel. 416.815.0330 • Fax. 416.815.0393 • legermarketing.com

Firehouse ResearchObjective: To get into the field quickly, and then over time, to assess h C di di t MLF’ i i i tihow Canadians were responding to MLF’s crisis communications strategies.Five Phases:

A t 27 S t b 2 2008August 27-September 2, 2008September 26-29, 2008January 8-12, 2009F b 2 M h 3 2009 ( WR)***February 27 – March 3, 2009 (post WR)***May 26 – May 31, 2009

Representative survey (N=1500+) reflective of age, gender and i t t l ti i t 7 721province – total participants 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

Purchase Behaviour (Previous 6 Months)


Awareness


Video Awareness


Reputation Ratings


Spokesperson Credibility


Cares About Public Safety


Trust That They Will Do What They Say


Likelihood to Purchase (1 Month)


Likelihood to Purchase (6 months)


GO x PH x Impact


Reputation Capital RestoredRecall

Law Suit Settled

Market Cap Aug 1/08 $1.43 billionJan 26/09 $1.57 billion


Stuff Happens!

February 25th – MLF issues a Weiner RecallRecallQuarantined product shipped to stores (ON NB NL)(ON, NB, NL)Question – how will the public respond t thi ll?to this recall?


How Did The Markets React?


How Did The Public React?Wave 1 Wave 2 Wave 3 Wave 4 Wave 5

Good Opinion

46 55 63 57 (-6) 66 (+9)

Bad 38 29 23 26 (+3) 20 (-6)Bad Opinion

38 29 23 26 ( 3) 20 ( 6)

Credible 74 79 74 71 (-3) 73 (+2)Cares 71 72 71 68 (-3) 71 (+3)Cares 71 72 71 68 ( 3) 71 (+3)Trust 61 74 72 68 (-4) 72 (+4)IP/1Month

21 34 47 41 (-6) 51 (+10)MonthIP/6 Months

40 46 54 49 (-5) 58 (+9)


REPUTATION RESTORED

The Purchase Process • Research Proposal 40

A Living Case Study

Strong crisis leadershipL l d fi i l id ti t kLegal and financial considerations took a backseatT k l ibilitTook personal responsibilityCommitted to safety of customersS ttl d Cl A ti S itSettled Class Action Suits

Committed to their values1. Do what’s right6. Dare to be transparent


So What Does Mean For Your Company or Your Clients?

They need to recognize that they are now in a pre-crisis state -- Crises happen everydayy g y p pp y yCrisis/Reputation Dashboard

They need to develop a crisis issues anticipation system – assassin teamsIssues tracking

They need to develop strong relationships with their priority publicsOngoing stakeholder tracking surveysMeasurable public relations programs

They need to anticipate prepare and practice (and practice and practice )They need to anticipate, prepare and practice (and practice and 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 testingThey need to live their values – honesty, transparency, safety

Internal engagement surveysThey need to realize that a crisis plan is necessary but not sufficient!


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

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