Apologies. We’ve all seen plenty of them lately.
The Fonterra baby milk scare took a new turn this week when New Zealand's Prime Minister, John Key, launched a ministerial-level inquiry into the presence of bacteria found in baby milk destined for China. The botulism bacteria found in whey proteins used in the instant formula, can cause a rare but sometimes fatal paralytic illness. Fonterra has already announced they are carrying out two internal investigations. However, the company's admission has attracted immense attention from users of China’s vibrant social media platforms, particularly weibo, its version of Twitter.
Contamination of food or medicine is always a great story for the media, as there is plenty of fear and outrage to be generated. Make that a food product for babies and you really turn up the temperature. The Fonterra story also has the kind of momentum that every good food scare enjoys.
“Former Soviet republics Belarus and Kazakhstan have joined Russia in banning Fonterra dairy products in the wake of the dairy giant’s botulism scare,” reported Tuesday’s New Zealand Herald. According to other media, fewer Chinese are planning to visit New Zealand.
The scare, which has been running for some weeks now, started on 31st July when Fonterra revealed that it had received the results of tests on a strain of bacteria, which confirmed that it had the potential to be toxic. However, the company’s scientists had first become concerned about the issue back in March.
The company’s announcement was headed “a quality issue” – a bizarre euphemism even by the usual opaque, convoluted, jargon-saturated standards of so much corporate communications. The company’s chairman, John Wilson, has been criticised for his low profile, contacting shareholders via email updates but avoiding press conferences and interviews. “Where’s Johnny?” the former leader of New Zealand’s main farming union has been asking sarcastically.
Crisis PR is littered with companies which did too little, too late when faced with a food safety or adulteration crisis and, as New Zealand Trade Minister Tim Groser, has put it, Fonterra is “not out of the woods yet”. Although the company has now taken action with visits to China by CEO Theo Spierings and John Wilson agreed to appear on a special TV programme, it’s been slow of the mark. Being dragged into doing the right thing is almost worse in media terms than not doing it at all.
At a press conference held on Wednesday, Mr Spierings gave an apology to consumers and showed what action the company is taking. Apology and action are two things that we always advise a crisis-hit organisation to do, and to do them in that order. Mr Spierings offered more “transparency” which is great, but again he should have done this much earlier. He also mentioned that it’s “very likely that we’ll call for some external validation” of the company’s internal inquiry. And so he should. Including independent, third party organisations in any action or investigation is very useful. It’s no coincidence that so many people talk about “working closely with the emergency services,” when disaster strikes. Asked about resignations, Mr Spierings said it would depend on the inquiry results. This is right, journalists love speculation and a witch-hunt including the modern day equivalent of a burning at the stake is always good copy. However, kicking such questions into the long grass and not being upset when they’re asked is important. Tired and emotional chief executives and other senior managers have been known to explode in fury when these questions are put to them at press conferences.
Traditionally in crisis management we always talked about the “golden hour.” This is the time following the start of the crisis during which the organisation affected could take action and protect its reputation, and its bottom line. In these days of 24 hour news and, more importantly, social media, that “golden hour” is now probably a “golden 10 minutes”. Acting quickly, being transparent, expressing sympathy (if not an apology) and being seen to take action is more important than ever.
Fonterra will probably survive this crisis but how healthy its business and reputation will be afterwards remains to be seen. The company’s management have certainly been slow in their response but British food and drug manufacturers cannot feel complacent. Following such events as the horsemeat scandal, according to research published last month by Mintel, nearly 60 per cent of consumers lack confidence in the UK food industry to respond to food scares effectively. Companies need to act with greater speed and professionalism than ever before should they suffer a crisis similar to one that has befallen Fonterra, or else they risk leaving a nasty taste in consumers’ mouths.
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