Manage a corporate crisis

Manage a corporate crisis

When packaged meat contaminated with listeria killed 22 Canadians in 2008, Maple Leaf Foods called in DAVID HERLE, a principal partner with Toronto’s Gandalf Group. The company’s handling of the disaster is still lauded as the model for crisis management. We asked the man behind the plan – also a Liberal Party strategist – for tips on how to be more Michael McCain than Ed Burkhardt.

Know the facts

People in crisis mode make two early mistakes: either they don’t speak at all or they speak with certainty about things they don’t know. Michael McCain, the CEO of Maple Leaf Foods, became the source on the listeriosis crisis, says Herle, because he provided regular, detailed, factual updates directly to the public.

Be realistic

Winston Churchill never said beating the Nazis would be easy, says Herle. “Instead, he focused on the seriousness of the situation and offered a plan.” Compare that with British Petroleum CEO Tony Hayward, who, in the aftermath of the 2010 explosion on the Deepwater Horizon rig, told the public: “The Gulf of Mexico is a very big ocean. The amount of volume of oil and dispersant we are putting into it is tiny in relation to the total water volume.” Viewers – who were watching 24/7 coverage of oil flowing into the Gulf – clearly didn’t believe him.

Take responsibility

Scapegoating never works. A case in point: in the days after the Lac-Mégantic rail tragedy that killed 47, MM&A Railway chairman Edward Burkhardt blamed local firefighters for the derailment, then the train’s engineer. Burkhardt was universally reviled, and the company quickly went bankrupt. Herle points out that managers need to realize you can’t pin responsibility on an underling without accepting some organizational accountability for what went down.

Be patient

Fight the urge to change the channel. If you try to nudge the conversation in another direction, you can come off as heartless, says Herle. Instead, look to Loblaws, which signed an agreement aimed at improving substandard fire and building safety in Bangladesh after the collapse of the Rana Plaza garment factory killed 1,138 workers. On the six-month anniversary of the disaster, Loblaws offered direct compensation to victims and their families.

Keep the updates coming

While media attention might fade in the weeks after a disaster, it’s still essential to notify customers about new developments. Herle says McCain Foods had to take out television ads “because the Canadian Food Agency wasn’t going to tell consumers that it was safe to eat the company’s products.” Smaller companies might not have access to the same resources, but they are often closer with their customers and can easily update them.

— Judith Pereira