To many companies, crisis management is
similar to an evacuation procedure at the office when the fire alarms ring. You hope it
never happens, especially in mid-winter or when it’s pouring with rain.

That, however, is where the similarity
ends. Evacuation procedures are generally well communicated, understood by most staff and
sometimes practised. Crisis management is different. Sometimes it’s invisible and
secret. Many managers will never experience a major crisis; the crisis management team
will never go ‘live’. So why have one, and what is a crisis anyway?

This is simply answered in two words –
‘Risk Assessment’ – two words generally sufficient to put managers into a deep
sleep. How often have I heard: ‘I don’t know where to start’. I will show
you just how easy it is.

Within the food and drinks industries, a
crisis is a threat to the health of consumers, brand, company or individual. This threat
could be chemical, physical, microbiological or environmental. In many cases, especially
on standard working days, a team of managers can handle a crisis, almost as part of their
everyday routine. The real problems begin on the eve of public holidays, when you are on
your own, your colleagues have all left town and you begin to get a few calls from
consumers, the media, worried parents, enforcement agencies, the police, retailers or
pathologists.

You may say, “It will never happen to
me / us / this company”. You may be right. I am not suggesting that every company is
on the brink of disaster, but just advocating that you check your own vulnerability. This
is simply done through risk assessment – in other words, what can go wrong, and how big or
small the consequences may be if it does. In a more technical way, the first priority is
to identify any hazards that exist within the entire business unit and to estimate the
likelihood that such hazards will be realised and their potential consequences (the risks
involved).

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By GlobalData

Remember, risks can be chemical, physical,
microbiological or environmental food safety issues; from fire and flood to plane crashes.
Prepare a long list; include the obvious and the outrageous. You may have a list of 100
hazards; now score them realistically – severity x likelihood. The risk rating below shows
a range or risk rating of between 1 and 80.

An Introduction to Risk Assessment

Risk Rating Matrix

The next stage is to sort your list, lowest
numbers first. These are very unlikely events, and, even if they do happen, the severity
or impact on you or your business will be minimal. As the numbers get higher, so you pay
them more attention. You write plans, and you manage the risk. You manage it out of the
equation, you stop doing it, you monitor it, and you reduce the risk. Let me suggest that
any score above a six requires your attention.

Many months later, you slowly become aware
of an issue that could severely affect your brand. Let’s assume that your product is
distributed across 30 states, has a 20-day shelf-life, and it’s the day before
Thanksgiving; CNN has just gone live with a grieving mother, a child has died and your
product could be involved. Information is scarce and conflicting. You can paint your own
worst-case scenario.

How many of you use peanuts, hazelnuts or
nut oil in any shape or form? Start paying attention now if you do. You will have noticed
the number of recalls related to nuts. Normally, because of the fear of nut allergies, the
recalls are initiated because nuts are not declared on the label, or the right product has
gone into wrong packaging – just plain carelessness really. But you are all petrified of
killing a consumer through your negligence. You are all preparing your defence in court.
Quite right too, but it is far better to reduce the possibility of carelessness in the
first place. If you use nuts, your manufacturing and packaging areas are at risk; you are
negligent in your duty of care if you put nut products in cartons with labels declaring
that the product is ‘free from’ nut products. In ‘a worst-case
scenario’, you may also face criminal charges.

If you recall, can you trace your entire
product? How quickly can you contact all your sales outlets? Let’s suppose it’s
6 o’clock in the evening; can you call your colleagues and get them or their deputies
back to the office? Have you got a list of key phone numbers of sales outlets in your car?
How quickly can you send recall notices to the media? Have you been trained to handle some
pretty tough media interviews?

Can you cope? How much energy and stamina
have you got?

Of course, you may be in an industry sector
where the likelihood of events of such severity is non-existent. You may just have to deal
with a factory fire, grieving relatives, children and the media. You just build another
factory and start again. You may just discharge some effluent into a local river and kill
a few million fish – not a big issue, unless you’re a fisherman.

Many issues begin with a complaint – not
necessarily a crisis, because only money, court cases, media interest and brand reputation
are at stake. The risk assessment I’ve described earlier can be used very effectively
when handling customer complaints. Let me give you an example. Some companies receive
hundreds of letters a week from disgruntled consumers. Most are genuine problems, and fit
into a certain pattern. If your team handles them professionally and sympathetically, no
lasting damage is done to your brand name or company. On my risk rating let’s assume
you routinely receive complaints about organic matter, albeit unpleasant, a very low-risk
hazard. A standard letter and voucher will suffice. What your team of junior,
administrative staff must be able to do is recognise the ‘big one’, the
complaint that will make national headlines, court cases and a slump in sales. If no-one
has complained of a mouse in your product for 60 years, and you have made hundreds of
millions of the product during this period, then do not treat it as a standard complaint.
Junior staff must be trained to pass serious complaints upwards. You have to prioritise
your actions: get the sample, pacify the consumer, show and demonstrate concern, handle
the media, or keep it quiet from them.

During a major incident or crisis, you will
have to make decisions, often without sufficient information, or with information that
conflicts. Your personal reputation as a leader, manager and communicator is in the public
eye. Demonstrate an ability to make decisions, demonstrate that you are the expert, that
you know what you are doing, and that it is the right thing to do under the circumstances.

The Coca-Cola incident in June this year
highlights the difficulties of ‘managing ambiguity’. There was a ban across much
of Europe following the illness of more than 100 people. Tests had failed to find fault in
products made in France. Coca-Cola admitted to ‘quality problems’ after
injecting sub-standard carbon dioxide into some bottled drinks at its Antwerp factory. Can
from Dunkirk in France ‘picked up’ traces of fungicide used to treat wooden
pallets on which they were transported to Belgium.

Doug Ivester, Coca-Cola’s worldwide
chairman, personally apologised to Belgian consumers in full-page adverts in 15 newspapers
(6/23/99) – a day after the company published reassuring adverts that fell short of
an apology in four other European countries. (ref. Ft.com – World News / Europe).
Exhaustive tests from the authorities and Coca-Cola had proved inconclusive -with various
quotations being published: ‘Symptoms reported by French and Belgian consumers were
psychosomatic’, ‘Any contamination of Coca Colas drinks or packaging was too
small to cause illness’, and ‘The pattern of this epidemic is consistent with a
clinical entity, which has been described as a ‘mass sociogenic illness’.

The important lessons are that, if your
explanations are based on toxicology, no-one believes you anyway. You must apologise
quickly, you must demonstrate real concern, you must appear in charge and never
underestimate the scale of the incident or how rapidly a global brand can have a global
problem.

Plan, prevent and train is my message.

Tony Hines MBE, Commercial Manager
Leatherhead Food Research Association

Details of reports from Leatherhead Food RA Click Here