Maple Leaf Foods Following Good Advice

Many companies in crisis get good advice. Fewer follow it.

Maple Leaf Foods, in particular president and chief executive Michael McCain, has taken most of the steps to ensure that there will be a better day for his company.

While in the early days of the issue, corporate spokesperson Linda Smith took the point and did a professional job, when it became clear that the issue had escalated to crisis, McCain took the hot seat – with the full-page ad in daily newspapers (guarded but laying out the corporate response as an action plan) and followed by a flurry of communications vehicles including a national media conference call, another full-page ad and a youtube video clip.

Less effective was Michael Vels, vice president and chief financial officer, who in a teleconference with financial analyst, backed away from accepting responsibility for the listeria outbreak by asserting that there is “no definitive proof” that the listeria that caused the deaths came from the listeria known to have tainted Maple Leaf products. This hair splitting is a departure from the “not listening to accountants or lawyers” of Michael McCain. McCain knows or has been counseled that people don't want to hear this kind of response to their genuine fear. Such comments increase the gulf between the company and the news audience.

It is also clear that Maple Leaf is not relying on the media alone to communicate to the stakeholders critical to its success. While the share price of the company stock dropped 10% in response to the news of the exploding product recall, the bulk of the shares are closely held by the McCain family and the Ontario Teachers Pension Fund. It is a safe bet that an early heads up meeting from Vels and McCain has solidified the support of the majority shareholders. Politicians and government officials also had spoken directly with McCain or a senior representative of the company and were able to say that they were in the loop.

Sales staff and customer service representatives have been busy with direct and indirect customers, helping in the logistics of the recall.

The industry Blogs were quick off the mark with factual information about the recall and health issue. However, by far the most pervasive were the class-action lawyers lining up to attract possible victims. The first was a US firm on the west coast, followed quickly by three Canadian companies who announced their intent to launch immediate legal action on behalf of those injured by the food-borne contaminate. While McCain may not have been thinking about lawyers, they were clearly thinking about him.

Perhaps the only other crack in the veneer was the assertion that the company would re-open the processing plant early in the week. Health authorities -- federal and provincial -- have come up with new regulations specific to the processing plant, new hoops for Maple Leaf to jump through. The announcements by the government officials have demonstrated that they and not the company are in control of the timetable.