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

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

Agenda

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

2

Leadership in Difficult Times

Jeanette Jones, ABC
Vice President, Communications
Maple Leaf Foods Inc.

June 9, 2009

3

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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 Restored
Recall

Law Suit Settled

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


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?


How Did The Markets React?


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


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 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


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!


Questions/Comments


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