Friday, January 2, 2009

Newsmaker of the Year

The Canadian Press today announced that Maple Leaf Foods CEO, Michael McCain, was named their 2008 Newsmaker of the Year for his handling of the listeria recall (see story in today's Waterloo Region Record The annual survey of Canadian editors and broadcasters stated that McCain "showed both genuine compassion and cutthroat business sense, and helped Maple Leaf Foods Inc. emerge relatively unscathed from one of the worst foodborne illness outbreaks in Canadian history."

From my analysis and assessment of their initial and continuing response to this crisis, I predicted in early September that not only would the company survive this tragedy but that it would be stronger and more focused on their core operations when the dust settled. In those early days I observed a number of critical variables that I believe MLF had institutionalized prior to the outbreak that predicted a successful recovery: strong crisis leadership, a participative culture, strategic public relations management capabilities and a crisis mindset that demonstrated that crises are a fact of everyday life.

In those early days I gave their response an A- (a very good mark in my books) and in mid-December I revised that to an A (for my U.S. colleagues ... our grading system includes A+) due to following actions: not rushing to reopen the plant and waiting until they had effectively managed the presence of listeria in their operations (it is ubiquitous); and most importantly, the effective and strategic decision to settle the class-action lawsuits in a very timely manner.

The markets have responded positively to their actions as well. On the last trading day of 2008, MLF shares traded above their pre-crisis price of $10.90 -- signalling a vote of confidence from investors and analysts.

There are of course a couple of things that I'm sure that Maple Leaf Foods would dispute in Canadian Press statement I quoted above: cutthroat and the company emerged relatively unscathed. I would suggest that rather than cutthroat their response was absolutely strategic. Cutthroat denotes a devious intent and I do not believe that the company's response was designed to help the company survive at all costs. In fact I would suggest that they ultimately lived their corporate value of "doing the right thing" and thereby were able to strategically manage their way through this crisis. The second statement is also problematic: no company that is faced with a crisis of this proportion emerges relatively unscathed. I would suggest that MLF and Michael McCain have been impacted deeply by this crisis and therefore have been changed forever. It is my belief that they will institutionalize the learnings from this recall and response and make it a very real and meaningful part of their corporate history and values.

Congratulations Mr. McCain and the Corporate Communications department at MLF.
POST SCRIPT... on Saturday, while drinking my morning coffee, I was pleased to read that the editorial staff at the Record agreed with my perspective on MLF's success. I was also pleased to read that they referenced a line from an op-ed that I wrote on this subject in September. Here's the editorial for your reading enjoyment

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