Although very different, in both cases, a crisis of leadership is apparent. When a catastrophe hits and a company doesn’t have resilience built into its culture, that’s when irreparable reputational damage can become a threat. From KFC's perspective, a lack of communication internally catalysed chaos. For Enterprise, a lack of accountability to the public is causing ongoing harm to Tiger Brands' image.
Enterprise is only now beginning to take ownership of the consequences of the listeriosis outbreak and has been on the defensive from the get-go. With 183 people dead and numerous staff employed across its factories, leadership at Tiger Brands needs to step up and start to honestly communicate with the public, according to a big-picture plan.
A crisis of this magnitude has the potential to derail a business completely. I use KFC and Enterprise to illustrate key learnings on fostering resilience through good leadership:
The Enterprise Foods (owned by Tiger Brands) crisis explained: 183 people have died from a listeriosis outbreak. Four Tiger Brands factories have tested positively for listeria so far, including the Enterprise Polokwane factory.
This has resulted in Enterprise recalling multiple meat products, class-action law suits against Tiger Brands, and extremely negative public sentiment towards Enterprise.
Lessons from the debacle: Protect your reputation. Arguably, Enterprise Foods has seriously mishandled its crisis communications, with a defensive, dismissive response that’s done nothing to rebuild its reputation in the public eye. Resilience comes from ethical, honest behaviour. When something goes drastically wrong, leaders need to act decisively without ambiguity: honest ownership is usually the best response.
The public wants to know what the business knows, so it’s best to be upfront and try to responsibly rectify the situation as quickly as possible. Remember: a crisis leaves a void that can either be filled with potentially harmful speculation or the information you give to the public.
Have a post-mortem, not a witch-hunt: Leaders within Enterprise will need to pinpoint how the problem arose without conducting a witch-hunt or laying blame. A company is a living organism, so pain in one area affects the whole business. The aim of a post-mortem needs to be building resilience by bolstering institutional knowledge.
Both the factors catalysing the crisis and the handling of it need to be analysed in an After Action Review held with representatives from every level of the business.
The KFC (owned by Yum! Brands Inc) crisis in a nutshell: From February 14 to 28, KFC experienced unprecedented chicken shortages when it switched to DHL from Bidvest Logistics in an attempt to cut costs. By February 18, only 266 of its 900 UK branches were open. Following the chicken crisis came an unfortunate gravy crisis, causing further franchises to close.
The lessons: Have a plan for change. In a Vuca (Volatility, uncertainty, complexity & ambiguity) world, agile change is imperative for long-term business survival. But it needs to be carefully managed. KFC made a big change without thinking through all the prospective consequences.
The lesson here is to pre-emptively foster resilience by having key decision-makers and problem-solvers sit around a table and imagine multiple worst-case scenarios with potential solves.
Engineers are good at this as they’re systemic thinkers who can often foresee complications that could arise 10 moves down the line. From this, a safe plan can be developed and communicated to every stakeholder.
Open up the communication channels: Resilient leaders welcome feedback and foster a culture of idea-sharing by incentivising ingenuity. To do this, open communication channels are key. By inviting criticism and alternate ways of doing things, resilience starts to seep into every facet of a company, strengthening its core culture. To be a good leader, it’s vital to let go of ego and arrogance.
A leader that people want to be led by has the humility to ask for help.
Realise that micro-management is a cluck-up: Leaders need an eye on every facet of a business. They achieve this by delegating critical responsibilities to trusted managers.
Trust and communication go hand-in-hand. When a manager is empowered to make decisions and run with something independently, that’s when resilience grows. In delegating, a leader can step away and glean a big-picture view of the business and identify core competency gaps.
Learn from KFC’s FCK-ing good crisis response: "A chicken restaurant with no chicken is not ideal" - so said KFC’s tongue-in-cheek apology, which also saw the letters in the chain’s name rearranged to FCK. Yum! They received mass praise for the way they handled the crisis - owning up to it and responding with humour that was completely on-brand.
This is an example of a good crisis communications. In responding so, KFC helped repair its damaged reputation and built its brand’s resilience in the public eye.
Have the grace to back-track: Resilient leaders can admit to failure fast and learn from it even faster. KFC has handed back some of its logistics business to Bidvest, which has now signed a long-term contract to supply about a third of the fast-food giant’s 900 restaurants.
Vernon Johnson is the executive: corporate partnerships at USB Executive Development (USB-ED).
The views expressed here are not necessarily those of Independent Media.
- BUSINESS REPORT