Research and retrieval of news articles by:
Bennett Gold LLP, Chartered Professional Accountants

SPECIAL NOTE TO ALL VISITORS:
Effective December 31 2012, articles are no longer being updated on this web site.
The site is now maintained as an historical archive, covering notable e-commerce news articles from the period 1999 to 2012.

'WHEN YOU MESS UP -- FESS UP AND DRESS UP'

Posted on June 30, 2009

      An advance "kidnap warning" issued by the RCMP in Richmond, B.C., President Obama's pre-election Facebook campaign, and the damage-control strategy adopted by Maple Leaf Foods following a Listeria outbreak traced to its Toronto plant - are all examples of outstanding leadership in challenging times, according to a disaster management expert.

      "People are going to make mistakes," says Jim Stanton, founder and president of Stanton Associates, a Vancouver-based crisis communications consulting firm. "That's why I've got this saying: Mess up, Fess up, Dress up. When you make a mistake acknowledge it, and tell people what you're doing to clean up." Stanton was speaking at the World Conference on Disaster Management 2009 held in Toronto last week.

A model that works

      In a talk titled "Lead, Follow or Get Out of The Way", Stanton cited Maple Leaf Foods' "brilliant" handling of the Listeria crisis as a model that should be emulated. "It's a fantastic example of brand recovery."

      In August 2008, the break out of a food-borne illness, caused by the bacterium - Listeria monocytogenes - was traced to a Maple Leaf Foods plant in Toronto. The outbreak claimed four lives. The typical reaction of most big organizations at the centre of such a catastrophe would be to clamp up, Stanton noted. "Maple Leaf Foods didn't do the typical thing." Instead, he said, the firm's approach was to:
1. Tell people what happened
2. Take responsibility and say they were sorry
3. Acknowledge they didn't know all the facts, but were going to find out
4. Outline what they were doing to remedy the situation and regain people's confidence
Such a strategy, he noted, may not find favour with many so-called experts, who are petrified of lawsuits that may follow any admission of culpability for a disaster.

      But, according to Stanton fessing up is not only right, it's also the smart thing to do. "The lawsuits are going to come anyway. When they do, if you're exonerated in the court of public opinion, it will go a long way to helping you in a court of law."

      On the other hand, he said, if a cover-up is detected, chances are penalties from the law courts will be "higher, more dramatic, more draconian." Stanton noted that Maple Leaf Foods has already settled all its lawsuits ... for $26 million. "It's done, out of the way. That's the model to follow."

A nutty response

      The approach to be avoided is stonewalling, Stanton said. Sadly, that's a common Ð though destructive Ð attitude adopted by firms when confronted with a crisis.

      It was what executives from the Peanut Corporation of America did when their firm's products were found to be the source of a salmonella outbreak that killed nine people, and sickened more than 600 between September 2008 and February 2009.

      Even after the Peanut Corp. learned its products were tainted with salmonella, it kept shipping them to unsuspecting customers, putting profits ahead of public safety, according to documents presented at a U.S. congressional subcommittee hearing in February.

      At one point during the hearings a congressman held up a container of the Peanut Corp.'s products and asked company president Stewart Parnell if he would dare eat the contents. Parnell pleaded the Fifth Amendment and refused to answer the question on grounds it would incriminate him.

      Stanton said greed of the firm's executives coupled with their refusal to fess up after the catastrophe sealed their fate. "The Peanut Corporation of America is out of business today."

Don't play the blame game

      While it's good to be candid about one's own mistakes, pinpointing the weaknesses of others (real or imaginary) isn't likely to win you a popularity contest, at least not in Canada, noted Stanton.

      To illustrate the point he alluded to the ad campaign being run by the Conservative Party of Canada to make "to make [Liberal leader] Michael Ignatieff look bad." The ad features a picture of Ignatieff with the caption: I'm Just Visiting." The sub-text reads: I am horribly arrogant and sure of myself. "It's a typical American-style attack ad," Stanton noted. "These kinds of ads just don't work in Canada. It's a different culture here."

      A recent survey that assessed the Tory ad's impact on the public proves shows how self-defeating negative advertising ultimately is, he said. The survey was conducted by Toronto-based market research firm Nanos Research. As many as 53 per cent of those polled said the Tory ad was ineffective and 8 per cent said "somewhat ineffective." Only 20 per cent felt it was effective, and 15 per cent that it's somewhat effective.

      When asked about what kind of impact the ad would people's impression of the Conservative Party, a mere 7 per cent said positive, and 3 per cent said somewhat positive. A majority said the ads would cause people to view the Conservatives negatively (53 per cent) or somewhat negatively (12 per cent).

      "As a leader should you be launching such a campaign? No. You need to emphasize what you are doing, not what your opponent isn't doing," Stanton said. He said in Canada not only do negative campaigns fail, they eventually backfire. "People resent it."

Just plane lucky

      If candidness and clarity of the message are crucial, then so is speed of its delivery, Stanton suggested. "Whoever gets their message out first with the new and traditional media sets the news template," he said. "Everyone else is in reaction to what you have said."

      He said getting out first with your message is especially crucial when your company is at the centre of some calamity, as today's social networks almost guarantee news about that would travel very quickly. He recalled the accident involving US Airways Flight 1549 bound from New York City to Charlotte, N.C.

      On January 15, 2009, six minutes after departing from LaGuardia Airport that aircraft (an Airbus A320) struck a flock of Canada geese, lost thrust from both engines and was forced to water land in the Hudson River. "US Air president, Doug Parker, made his first statement to the media about 90 minutes after the incident, but it was already too late," Stanton noted. He said by then information about the incident had already been accessed and distributed by social media sites.

      A few employees of public relations firm Hill & Knowlton (H&K) tracked the speed at which news about the event was being transmitted through Twitter, Wikipedia and other social media sites. One H&K employee (Niall Cook) even created a time lapse video showing 176 edits to the wikipedia page for US Airways Flight 1549 during the 90 minutes following the incident.

Positive pre-emption

      While the US Airways incident reveals how crucial it is to get your message out soon after an incident, organizations sometimes get even better results through pre-emptive action, Stanton noted. He said this happened when the RCMP in Richmond, B.C. issued a statement earlier this month notifying parents about a threat they had received that a child would be kidnapped in the next few weeks.

      RCMP corporal (Jennifer Pound) who issued the warning said the police, while concerned about causing a panic, felt the information was too important to sit on. "So they got out fast with their message, the public responded favourably and they got a lot of positive press coverage as a result."

Citizen media

      Stanton said President Obama's campaign in the run up to the U.S. presidential election exemplified masterly use of old as well as new media.

      "Obama had 3.2 million Facebook friends. Each day, no matter where he was, he'd sit down before a computer with a camera on it and talk to one of those friends. Imagine if you were one of those persons that Obama talked to. How happy would you be? How many people would you tell?"

      Likewise, Obama's YouTube videos were watched an estimated 14.5 million hours, Stanton noted. He said Obama also knew how to harness the power of the traditional media and on the last week leading up to the election bought millions of dollars of air time.

E-Commerce Alerts are issued by Bennett Gold LLP, Chartered Professional Accountants as situations develop. Bookmark this site and check back often. Our e-mail address is: info@BennettGold.ca

In accordance with United States Code, Title 17, Section 107 and Article 10 of The Berne Convention on Literary and Artistic Works, the news clippings on this web site are made available without profit for research and educational purposes.

ALERT
ARCHIVES
Final Entries
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999