Maple Leaf's handling of listeria crisis set 'the gold standard,' experts say

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February 20, 2009 12:55

Politicians and public relations people take note: The Maple Leaf Foods crisis proves that honesty really is the best policy.

Terry Flynn, a communications expert at McMaster University’s Degroote School of Business, studied the corporation’s reaction to the listeriosis outbreak last summer that saw 20 people die.

“This is a great example of reputational management, financial/customer management and communications management,” Flynn said Thursday at a Canadian Public Relations Society meeting in Halifax.

Flynn used information gathered by Leger Marketing, which ranks Canadian companies’ reputations. In May 2008, before the crisis, Maple Leaf had a middle-of-the-pack 74 per cent score. A week after the listeriosis news broke in August, it sank to 46 per cent.

“Their stock price also dropped 21 to 25 per cent in that first week. It’s an interesting correlation,” Flynn said.

Maple Leaf president Michael McCain headed the crisis response, admitting the mistake and opening the plant doors to the media. He bought TV and newspaper advertising to apologize and promise change.

McCain made a point of not talking to his lawyers or accountants, Flynn said.  

“It’s amazing for them to say, ‘We know we’ll have legal issues and financial issues, but this is about doing the right thing for the customers.’”

By January, Maple Leaf’s reputation had rebounded to 63 per cent. Its score rose 31 per cent among existing customers. The stock price was at $10.90 and falling the day before the crisis; today it sits at $11.

“In the midst of the worst economic crisis since the Great Depression, they pulled out of it and have a higher market value,” Flynn said.

Across the board, Maple Leaf received a 10 per cent bump from the transparency-first policy.

“This is a game changer. We’ve been able to isolate the return on investment. Maple Leaf has become the gold standard of how to respond to a crisis,” Flynn concluded.



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