The power and complexity of sincerity in a corporate crisis.
It may be early days yet, but Tiger Brands and the listeria crisis are rapidly shaping up to becoming a case study in corporate crisis management. The South African food giant has had the deck stacked heavily against it; not the least being the legitimate practical, insurance and legal constraints in admitting accountability and by implication, liability at the outset.
In such cases, the only mitigating response is sincerity in concern for the community and customers without necessarily admitting culpability. That’s a very difficult tap-dance because it invokes what is essentially a human quality in an institutional and legal environment. Sincerity reflects a combination of attributes that ultimately create authenticity and credibility even at the institutional level. This is not something you can easily spin or rehearse from a P.R. handbook. It is fed by genuine empathy, intuition, honesty, humility, integrity and above all consistently demonstrated as a brand over a number of years. Whether it mitigates the crisis or not is ultimately not the point. Sincerity is not about purpose or motive; it is simply about being.
In Tiger’s case, sincerity, coupled with honesty about the difficulty it faced in admitting responsibility prior to conclusive tests proving the source of the outbreak, may have tempered some of the hostility. I say may, because a hostile media is simply a given these days and lines have become blurred between direct and leading questioning; between inquiry and inquisition and between investigation and prosecution. These were all displayed in the Tiger News conference broadcast live within hours of the Department of health announcement.
It led to Tiger’s one empathetic gesture virtually being ignored; that of withdrawing all Enterprise products and not only the three suspected of contamination. That gesture seems to have been taken out of the spin-doctor’s manual relating to the famous Tylenol case of the early 80’s. In that incident, 7 people died after consuming the popular pain-killing capsules that had been injected with cyanide In Chicago. The producer, Johnson and Johnson, immediately warned consumers not to take the Tylenol capsules and withdrew all of them throughout the United States. It later stopped producing capsules completely. It cost J&J some $100 million at the time and Tylenol’s market share dropped from 37% to 7%. But within months that had all been regained and the company’s brand emerged with an enhanced reputation.
In 2003, Pick ‘n Pay had a similar experience in an extortionist threat in Gauteng which claimed that some products in its stores had been poisoned. It immediately took the public in its confidence and withdrew the products from the shelves. The threat was shown to be a hoax, and the company’s brand and share price emerged stronger from the experience. The significant difference between Tiger and the others is that the latter were victims whereas Tiger is accused of being a perpetrator. That immediately tarnishes somewhat C.E.O. Lawrence MacDougall’s emphasis that the company had gone beyond what was expected of it in mitigating the effect of the listeria outbreak.
But there’s a far greater significance to the comparisons. Johnson and Johnson’s CEO at the time of the Tylenol crisis was James Burke – a man who passionately believed in the company’s credo, penned in the 1940’s, that J&J’s "first responsibility was to its customers and then to employees, management, communities, and stockholders-in that order”. Six years before the Tylenol event, Burke felt that the credo had lost its influence and challenged the board either to recommit to it, or “tear it off the walls.” Similarly, Pick ‘n Pay had at the time, carefully nurtured “the customer first” passion of its founder, Raymond Ackerman. Tiger Brands simply does not have the same “gravitas”, or consistent sincerity. Just over ten years ago, it was involved in the infamous bread price fixing scandal and had to pay a R100 million fine: one of a number of brand tarnishing events.
Yet, one has to have some sympathy for MacDougall and Tiger Brands. Largely through its own doing, business generally has created a mostly hostile public, whose anger is tempered only by even lower trust in government. Big business is reaping what it has sown for the past three to four decades in the form of a particular interpretation of free enterprise that places exclusive emphasis on capital supremacy, shareholder-value, profit maximisation and short termism. It has been “de-humanised”, preferring to cower behind an institutional shield that often exonerates individual malfeasance and accountability.
In that process it has muted and ignored the most important perspective of all: that business is not about institutional standing and performance, but about personal relationships and individual meaning. As I argued in an earlier article titled “Follow the meaning”, relationships are far more important to a company’s health than metrics or structures. This is particularly true of relationships with customers and the community at large. In that, institutions per se cannot be sincere. They need a Burke or a MacDougall to convincingly reflect that and individual behaviour to demonstrate it.
The way Johnson and Johnson lived out its credo is an important reflection of pre-80’s corporate thinking. Over the years I have cited many others who have benefitted and continue to benefit from the customer driven, “creating value for all” perspective. Today Governance prescriptions are trying to coerce companies into doing that, but it will always remain insincere, prescriptive and onerous until it becomes the understood purpose of business.
Then caring becomes sincere, and trust a given.