Crisis Management

Cover Ups Are So Passé

Stick to Crisis Management 101, admit your mistakes

When it was announced that traces of the agricultural chemical DCD had been discovered in milk powder produced by New Zealand dairy company Fonterra, and, even worse, that Fonterra had discovered the problem months before it became public knowledge, it created an international reputation crisis for the organization.

In his Managing Outcomes newsletter, Tony Jaques, Director of Issue Outcomes, discussed the situation:

And when it was revealed that the company knew about the problem months before it became public, Fonterra argued it was “not material.” Furthermore, they argued the timing had nothing to do with the allegation that the disclosure was supposedly withheld until after a major stock market placement of Fonterra shares.

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Sadly, in issue management, simply stating and then repeating your own version of the facts is rarely enough. Perception trumps reality every time, and in China – a major market for New Zealand milk powder – there was reported renewed panic among housewives still spooked by the melamine in baby formula scandal of 2008. As a result, New Zealand’s Ambassador in China had to offer a “fulsome apology” to Chinese consumers for any “confusion” caused.

Fonterra was actually a partner in the Chinese company convicted of secretly including the industrial chemical melamine in milk in 2008, a scandal that cost several infants their lives, and the New Zealand media gleefully linked the two events in a virtual deluge of stories blasting the cover up.

Resist the temptation

Look, if you come across a crisis within your organization, don’t bother trying to cover it up. In fact, don’t do anything that even LOOKS like you’re thinking of covering something up.

Yes, we know that it can be very, very tempting, but the public and media are quite keen on spotting organizations that are sweeping important details under the rug, so much so that giving the mere appearance is more than enough to trash your reputation.

It can be painful initially, but by following Crisis Management 101 and acknowledging your fault, issuing a mea culpa, etc, you are able to work towards a resolution. Choosing to ignore this tested rule will quickly land you on the wrong side of the billion-person jury that makes up the court of public opinion, and that’s not a position we’d like to be in.

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