Listeria poisoning can lead to death, and it appears to have done just that with Blue Bell ice cream in Kansas and Texas last month. In terms of corporate crisis, it doesn’t get much more threatening than that. In the face of such an economic and public relations crisis, most companies go into lock down mode. Deny, deny, deny. Batten down the hatches and fight, fight, fight. That’s the common defensive strategy in consumer confidence challenges of this magnitude.
Instead, what did Blue Bell Dairies do? They recalled all products manufactured in all their plants and under all their labels. Immediately. No delay. No “You can’t prove it”. No awaiting the outcome of an “independent” inquiry by the company’s lawyers (with a clear bias in favor of their multi-million dollar a year fee generating client).
What’s wrong with Blue Bell? Did they not complete their MBA studies? Do they not listen to their lawyers? Protecting the corporate treasury from gold diggers is “de rigueur” in today’s executive suites. Taking responsibility is a choice only made when there are no others.
Ask GM. It can take 10 years or more to be held accountable. Profits and share value can withstand the headlines and investigative documentaries if the company just keeps a stiff upper lip. No self-respecting corporate executive or legal counsel simply walks to the plate and takes three strikes.
Many of us remember a similar corporate crisis in the old days. It was 1982 in Chicago. At the time, Tylenol was the most popular analgesic on the market enjoying a 37% share.
However, people began dying after taking Tylenol purchased in Chicago’s drug stores and grocery stores. In just a matter of a few days, 7 people had died and all had taken Tylenol manufactured in different facilities and purchased in different Chicago retail establishments.
The product liability movement was well established and liability for impurity in manufacturing, packaging and distribution could cause significant corporate financial loss. . . if ultimately found responsible for the defect.
Johnson & Johnson was Tylenol’s manufacturer. Rather than engage in a circle the wagon defensive battle, within only a week from the first death, Tylenol assumed responsibility to ease consumers’ minds.
Holding itself accountable (rather than forcing others to do so), Johnson & Johnson publicly announced a product recall. Pulling all Tylenol from all the shelves of all retail outlets and financially incentivizing its return, the company incurred $100 million in costs associated with the recall. In 1982, that was “real money”.
If Johnson & Johnson had held strong and not “crumbled”, the criminal investigation would have revealed the company was not responsible for any “product defect” at all. Although no one has yet been found responsible, it was clear that only a few bottles in Chicago had been contaminated by an individual motivated by a perverse interest in seeing strangers suffer and die.
Within one month of the recall, Johnson & Johnson invented a triple seal tamper proof packaging for its Tylenol product. That’s right millennials, it has not always been nearly impossible to open over the counter drug packaging.
When Tylenol was reintroduced with safer packaging and a financial incentive to purchase, it soon regained the number one ranking as the preferred analgesic on the market. The $100 million in expense was quickly recouped and within the year to follow Tylenol returned more dollars to the J&J account than it cost to weather the Tylenol poisoning scare.
Why? Assuming responsibility and holding yourself accountable is a credibility builder and trust enhancer.
In medicine, taking responsibility for “medical error” (even in the absence of fault) is proving to be a real “game changer” in reducing the costs of health care and improving patient satisfaction when things go badly. Check out the remarkable work being done at Vanderbilt University Medical Center and the University of Michigan Health Services organization for leading examples of what an apology culture can do to mitigate risk and improve health care.
It is not clear what Blue Bell’s recall will cost the company. In the same timeframe, Jeni’s Splendid Ice Cream also recalled 265 tons of its product for an unrelated listeria contamination in the same time frame at a cost of almost $3 million. Blue Bell’s cost, expense and lost revenue will be many times that amount.
However, if consumer response is anything similar to the Tylenol poisoning incident, Blue Bell and Jeni’s Ice Cream will enhance confidence and trust by stepping up to the responsibility plate and holding itself accountable. That’s a real home run.
Is there any other way to maintain a sustainable business and serve customers? Despite many other shortcuts, the right path is the one of personal responsibility and accountability.