Friday, April 27, 2012

Atta boy!!!! Beef Industry

We spend so much time critiquing companies and organizations that get it wrong, so it's special when we can give an "atta boy" to someone who does it right and avoids a costly business crisis.

The beef industry responded quickly and effectively this week following word that a case of mad cow disease had been found in California.

American cattle farmers and beef processors have been hit with one crisis after another in recent years, including the most recent "pink slime" crisis.  Critics of the "lean finally textured beef" had a field day piling on while the beef industry was slow to react.

The report of a case of mad cow or bovine spongiform encephalopathy broke on Tuesday and within hours the United Sates Department of Agriculture, the meat industry and the American Veterinary Medical Association went on the offense issuing statements, doing interviews and updating web sites.

There were mad cow scares in the U.S. in 2003 and 2006 and it cost the industry billions of dollars.

This time consumers were reassured quickly the one "case" was a rare form of the disease that did not threaten the food supply and the on-going testing of about 40,000 cows a year was doing its job and spotting problems before they became a threat to the industry or the consuming public.

Now, if we could get every decision maker, in every kind of business, to react as quickly and positively as the beef folks did, we would see far fewer business disruptions and financial losses in all other  categories.

Monday, April 23, 2012

Wal-Mart Working On Another Top 10 Most Crisis Prone Business Ranking

Wal-Mart de Mexico, the largest international division of Wal-Mart, has been accused of bribery to speed the growth of the company in Mexico, and then a cover-up by top American executives.

The New York Times published the allegations and now legal scholars and former Securities and Exchange Commission officials are predicting the retail giant could be hit with $1-billion in fines and settlements and legal fees if the Times report turns out to be true.

The Institute for Crisis Management's 2011/2012 Annual Crisis Report is due to be published in two weeks and it will reveal that Wal-Mart dropped off the top-ten most crisis prone companies' list in 2011, after making the top-ten list six times since 2003.

Wal-Mart was #5 in 2003, #2 in 2004, #8 in 2005, #4 in 2006 and 2007 and #9 in 2010.

Experts who have weighed in since the initial Times story, predict that, if true, the bribery and cover-up will haunt Wal-Mart for years and likely result in whopping financial penalties by U.S. regulators and the ultimate downfall of top company executives.

Wal-Mart made the ICM Top Ten list repeatedly since 2003, while also being named one of the "best" companies in the U.S. at the same time.  Wal-Mart made the ICM list mostly because it is one of the biggest companies in America and by its very size, generates tons of good and bad news every year.

However, it's one thing to deal with a job discrimination lawsuit, and another to face federal bribery charges and the prospect that more than one senior executive could end up in a federal penitentiary for a few years.

And to add insult to injury, critics of Wal-Mart will use the allegations to hammer the company every time they have a chance.

  

Thursday, April 12, 2012

Chicken Leg In Mouth

There's much to be said about Facebook, YouTube and Tweeting -- some of it's even good.

But, take for example, when it's not.

Following the big earthquake off the coast of Indonesia recently, two things happened.  People panicked and there was an assumption that a tsunami was on its way.

Someone with KFC Thailand was moved -- no pun intended -- okay the pun was intended -- to take advantage of the anticipated disaster and TWEETED this marketing message:  "Let's hurry home and follow the earthquake news. And don't forget to order your favorite KFC menu."

If you saw the video and still pictures from the region shortly after the first windows cracked and buildings began to shake, you saw faces of stark terror, fleeing from the cities and villages, and I dare say, fried chicken was the farthest thing from their minds.

Public reaction was almost as fast as the first tremors and some thought as threatening.

KFC Thailand took down the post and apologized on Twitter.

The Associated Press tried to get a comment from KFC parent company, YUM Brands here in Louisville, KY.  The AP reported there was "no immediate response."

A few companies have successfully tweeted in the wake of bad news events, but some have "stepped in it" even worse than KFC Thailand.

When the violent uprising in Cairo was filling TV screens around the world, someone at designer Kenneth Cole  tweeted "Millions are in uproar . . .Rumor is they heard our new spring collection is now available online."

Reaction was fast and unkind.  The company eventually issued an on-line apology, but not before the thoughtless marketing mistake made negative news around the globe.

Skittles was one of the latest to let someone in the company use their twisted sense of humor on Twitter asking "what fans would do for their last bag" of Skittles, after Trayvon Martin was shot and killed while returning from the store with a freshly purchased bag of the candy.

Executives, managers, marketers, make sure your employees are "thinking" before they unleash their 140-characters on Twitter.  There needs to be a "sniff test" in most organizations. If a Tweet might stink to someone, think twice about hitting  "tweet" in the lower right hand corner of the new message box.

Thursday, April 5, 2012

Hold Your Partners Accountable

As we put the finishing touches on the 2011/2012 ICM Annual Crisis Report there are some lessons from last year that businesses around the world cannot afford to ignore.

Natural disasters, cyber crime and supply chain disruptions top the list and the first two are significant contributors to the latter.

In December 2004 a massive earthquake in the Indian Ocean triggered a tsunami that killed an estimated 230,000 people.  It also impacted the supply chain of a number of U.S. businesses.  I was flying home from the west coast and my seatmate was obviously distressed.  She was on her way to her corporate headquarters in the middle of America to tell her CEO that an entire season of hunting and sportswear had been washed out to sea and it would take at least half-a-year for their suppliers to make and ship replacement product for their chain of big-name stores.

2011 drove home the danger of today's supply chains. More and more companies in one part of the world -- the U.S. for example -- depend on parts or finished products supplied from the far reaches of the globe.  Even if the supplier is a state or two away, there are still so many things that can prevent timely delivery.

Today's business leaders MUST anticipate all the things that can go wrong and disrupt their supply chains.  No longer is it enough to acknowledge that there could be a disruption.  The old idea that
it won't happen to us and if it does there is nothing we can do about it anyway, just isn't good enough.

Someone in every organization has to anticipate the possible loss of critical parts or goods and develop a solution, just in case.

Not just manufacturers or retailers -- but what about health care providers.  Hospitals ran out of critical medications in 2011, because pharmaceutical companies could not meet the need. 

What if you run a small neighborhood restaurant.  What would happen if your supplier could not deliver the steaks or salad ingredients that your customers have come to expect from you?  How long could you survive if your prime source of food or supplies or car parts, or medicines were not going to be available for months?

Crisis planning is not something you should do, it is a MUST do for any and every organization.

The new ICM Annual Crisis Report should be available later in April.