How should a company manage a meat recall crisis?
XL Foods' limited public response 'antithesis' of Maple Leaf Foods' actions in 2008
After a deadly strain of listeria turned up in luncheon meats and other Maple Leaf Foods products in August 2008, the company's CEO did something few others facing a similar crisis had ever done.
A sombre Michael McCain looked squarely in the eye of a television camera, and told consumers what the company was doing. He offered his "deepest sympathies" to Canadians whose family members had died or became ill after eating Maple Leaf products.
Four years later, another Canadian food giant faces another contamination and recall crisis.
XL Foods Inc. is in the midst of the largest beef recall in Canadian history, with reports of 11 gastrointestinal illnesses in four provinces linked to beef from its plant in Brooks, Alta.
But the limited public response from the company since E. coli was detected in beef products at the plant has garnered criticism and nothing like the wide regard McCain and Maple Leaf received for their immediate actions, openness, accountability and leadership from a very visible and empathetic individual.
"Quite frankly, this is the antithesis of the Maple Leaf response," says Terry Flynn, a professor who teaches a course in crisis management at McMaster University in Hamilton, Ont.
With Leger Marketing, Flynn did a study on Canadians' perceptions of Maple Leaf's crisis communication. It concluded among other things that the company had set a new level of crisis leadership in Canada "by which future companies will be measured."
At this point, XL's communications strategy is anything but obvious. It has released only a few media statements and so far, appears to be letting the Canadian Food Inspection Agency lead the public information campaign. So observers trying to measure its effectiveness are left basing their conclusions on what they have seen so far.
No XL leader has come forward to put a face on the company and speak directly to consumers who are wondering if that steak they have in the freezer is safe to eat. Interview requests have been declined. (A request for comment for this story last Friday resulted in an email of the news release issued that day.)
In their infrequent news releases, the company has said "all members of the XL community deeply regret the illness caused by the consumption of beef products" and that it takes "full responsibility" for its plant operations and the food it produces. It listed its "food safety and worker safety practices" but provided no hint of what may have gone wrong.
The most recent releases haven't included the name of any individual who could speak for the company. ("Where's the leadership of the organization?" Flynn asks.) The firm's media phone line has offered recordings of readings of the most recent news releases, something Flynn has never seen before.
For those like Flynn who study these sorts of things, the XL response is not what they would advise for any food company trying to win back public trust and confidence in the face of a contamination crisis.
Instead, they point back to McCain and Maple Leaf.
"I think when it comes to public safety and public health, there needs to be some level of accountability and transparency and openness and I don't think we're seeing a lot from XL Foods in that area and certainly they could do a lot more," says Jeremy Berry, an associate professor of public relations at Mount Royal University in Calgary.
"If you look at the Maple Leaf example, … we saw a lot more openness and transparency and really a lot of leadership on a similar file and one that even involved the deaths of more than 20 people and they were still out there and leading."
McCain became synonymous with "what a good leader looks like," says Berry, noting that McCain was named a CEO of the year shortly thereafter and helped the company rebound "based on the values that he set out for the company and leadership is certainly a big part of that."
Berry says the keys for any company in such a situation are to be open, honest and available to the media, and to "really have some solid leadership on the file, and someone who is accountable, as was the case in the Maple Leaf situation."
If the company doesn't do that, it's not as if the media will likely go away.
"The head-in-the-sand strategy usually brings more media attention than if you were upfront, open and available," says Berry.
Openness and availability made McCain's actions stand out four years ago.
Flynn says they were a "very unusual step" in the field of crisis communication, and served to pull back the curtain on what for many organizations might generally be blocked off from public view.
"A lot of companies might not have had a communicative behaviour within the organization or their lawyers might say, you know, 'Be quiet, we have a lawsuit that is pending so we don't want to jeopardize anything in our legal case by what you say in the court of public opinion,' " says Flynn.
"But McCain actually flipped that upside down and said, 'No, no, no, no. If we want to regain the trust of consumers we have to in fact enact the values that that organization lived upon each and every day.' "
One of those, according to the Maple Leaf, was "Do what's right." Another was "Dare to be transparent."
The company held news conferences, welcomed media to its plants, made senior officials accessible, and settled a class action lawsuit by December 2008, which Flynn describes as "record time."
Flynn's study of how Maple Leaf was perceived by Canadians, completed in January 2009, found that "McCain's very proactive and immediate connection with consumers had a high positive rating," he says.
Of course, every recall situation is unique, and one notable difference between Maple Leaf and XL is the very nature of the companies. Maple Leaf is public, XL Foods is private.
But, Flynn argues, a company still has an ultimate responsibility and obligation to the consumer, no matter the fiscal arrangement.
"A private company doesn't have the obligations to be transparent or communicative that a publicly traded company would," he says.
'However, the public gives corporations whether they're public or private the right to operate, the licence to operate, so they have a moral obligation, especially when it comes to products that we as consumers buy to tell us how this happened."
If XL is enacting a legal strategy in its communication, Flynn doesn't expect to see much change in the company's public messages, and he thinks the consequences will be drastic as a result of it.
"I would always say to lawyers … 'There are two courts that an organization operates within. One is the court of law and the other one is the court of public opinion and sometimes you might win it in the court of law, but lose it in the court of public opinion and therefore not have any customers at the end of the day to sell your products to.' "
Sylvain Charlebois, associate dean and a professor in the College of Management and Economics at the University of Guelph, says Maple Leaf had a brand to protect, unlike XL.
In the Maple Leaf case, consumers could easily see whether the beef product they were buying was from the company. XL, on the other hand, sells its products to a variety of grocery retail chains. The name "XL Foods" is not on the packaging of the products sold to consumers.
"That's why it's more crucial for XL Foods to connect with their public, even more to let consumers understand how things work," Charlebois says.
"What's at stake for XL Foods is their business model. Their business model is currently under siege by the Canadian public questioning why do we have plants that are so big. You have to justify this to the public and bottom line is always price."
With files from Daniel Schwartz