Tuesday, February 24

Closing Case Studies: Peanut Corporation Of America


Two weeks ago, Peanut Corporation of America, which was the source of a national salmonella outbreak, filed for Chapter 7 bankruptcy in Virginia.

The decision to file bankruptcy is clearly stated to limit the company's ability to take any actions regarding recalled products that were shipped from its Georgia and Texas plants. It has advised that it is no longer able to communicate with customers of recalled products, and the previous instruction for customers to contact PCA is no longer applicable.

To date, the U.S. Food and Drug Administration (FDA) and the Centers for Disease Control and Prevention (CDC) have recalled 2,100 products in 17 categories by more than 200 companies. The list continues to grow.

The FDA has released several communication materials to help consumers make sense of the outbreak, including an video of how outbreaks outbreak occurred and PDF documents that illustrate the distribution process and investigation timeline.

How Reputation Mismanagement and Bad Communication Can Kill

The FDA and several investigations seem to indicate that the PCA acted with gross negligence that is responsible for sickening over 600 in 44 states and Canada, linked to nine deaths, resulted in thousands of recalls, and caused the business failure of at least one company.

While it remains the argument of many that Stewart Parnell, owner and president of PCA, placed profits before public safety, there are still valuable lessons to learn for public relations professionals and communicators. You don't have to lie.

Show me a PR person who is "accurate" and "truthful," and I'll show you a PR person who is unemployed. — Andrew Cohen

While the public relations industry took exception to Cohen's comments last year, there is some truth to be found in his harshness. Some public relations practitioners help companies turn frowns upside down, attempting to put the very best light on the very worst situations. We might see it over, and over, and over again, but it's not the job. So what is the job?

Reinforce Core Values. A smart public relations professional or communicator could have reinforced the core values of the company, making employees aware that consistent quality, safety, and dependability was the priority not just in marketing materials but in action.

• Advise On Reputation Management. A skilled public relations professional or communicator could have outlined the considerable risk of reputation damage if the company continued to maintain substandard safety practices.

Turn Whistleblower. An ethical public relations professional or communicator could have reinforced public safety as a critical component to plant operations and communication, including their responsibility to report transgressions.

Manage The Crisis. A seasoned crisis communication professional or communicator could have outlined a proper course of action for the company, assuming the contamination was in fact an accidental occurrence and not an orchestrated event.

Prioritize Communication. An experienced public relations professional or communicator could have prioritized the communication, advising a deeper than needed stop shipment and recall. The second priority would have been to demonstrate (not state) empathy to those affected and accept responsibility as warranted, including any wrongful deaths.

Avoid Marketing Messages. A vigilant public relations professional or communicator could have ensured any statements made to the public were devoid of marketing messages until evidence concluded the contamination was an isolated incident.

Keep Communication Open. An attentive public relations professional or communicator could have kept communication open, honest, and candid throughout the crisis, even if they were not the designated spokesperson, making minute-to-minute recommendations to the executive team to avoid disaster.

So why didn't any of this happen? I've spoken to enough recruiters and public relations firms to know that most consider the skill sets necessary to perform any of these tasks secondary to the size of a person's e-mail list and perceived relationships as an extension of marketing. As long as that remains the priority, companies will continually find themselves in the kill zone when their reputation is on the line because the most common answer out of the mouths of Rolodex keepers is to spin it away.

The longer you work in communication, the more likely you will learn that it's hard enough to tell the truth and be believed. Do you know what I think? If you lie to the public, you're not in public relations. You're in the urban dictionary.

Peanut Corporation of America. Case closed. And the company too.

Three public relations related posts:

Communication Overtones: Is PR paid to lie?

Sane PR: 60.3% of Britons Believe PR Officers Lie

Silicon Alley Insider: Top ten lies PR agencies tell their clients

8 comments:

Anonymous said...

"Safety and quality do make a difference." Too bad this guy and his company had neither.

Rich on 2/24/09, 1:37 PM said...

Anon,

Communication helps keep companies on track, assuming the message isn't lip service.

Best,
Rich

Rich on 2/24/09, 5:29 PM said...

More words:

One attorney has created a blog specific to Salmonella outbreaks. Check it here.

Jeff Koeze on 2/25/09, 5:54 AM said...

I don't disagree with any of your general comments, which seem to me to be spot on, but they are oddly counter-factual in the PCA context.

According to press reports, PCA's strategy was to beat everyone on price. Their communication strategy to their wholesale customers was summed up in their price quotes. And there is no doubt that this message got across internally.

Smart folks like you never even get a seat at the table at places that pursue PCA's strategy. You are among the things that can be done without.

PCA did botch the post-crisis communications badly, but given the facts and the flood of litigation, I don't think the best PR person could have dragged this one out of the ditch. And once you are in Chapter 7, it's over.

Barry on 2/25/09, 6:39 AM said...

How much of this do you think goes back to the P. T. Barnum theory of a public that secretly enjoys being hoodwinked?

A good story will sell anything. I once bought an amplifier because I was told it had been used by a rodeo clown. Of course the amplifier didn't make me sick.

Rich on 2/25/09, 6:55 AM said...

Jeff,

I appreciate your comment because it tells me that it might be important to point out that I did not rely exclusively on the press reports. PCA had years and years of pushing a quality message combined with a lower price, which was easy enough to source by reviewing and their Web site for the past five years or so, and applying some basic opposition research tactics for the piece.

You also remind me, though, that in offering some educational points, I did not stress one point enough: this company needed to die and didn't deserve to be pulled out of the ditch. (Thus, the whistle blower bullet point.)

And, by the time the outbreak occurred, it was already too late to save because general intelligence seems to suggest that they did these things knowingly, and without remorse.

However, taking that stance doesn't teach anyone anything. So I opted the position that had the company not corrected their safety standards at the whistler blower bullet point (in 2006, perhaps), the public relations practitioner would have been morally obligated to report them.

But you're right. There probably wasn't a public relations practitioner, at least not a good one.

Fortunately, I do get a seat at the table with a great many companies. Reputation management is alive and well, as long as companies remain focused on their core values or similar mechanism to remind them that risk management is important.

I also completely agree with you that it is over, which is why I decided to close the case study. There is nothing more to communicate, except by legal experts who will dismantle the company and destroy the family's pride, a gift from their father, which they eventually lost, imo.

I also appreciated your post on the subject.

All my best,
Rich

Rich on 2/25/09, 7:04 AM said...

Barry,

Ha ha. In this case, I don't think the public enjoyed it. We like our staples, like peanut butter products, to be boring and safe.

However, you might be right that the purchasers at more than 200 companies were hoodwinked.

If a food supplier is beating everyone's price, insisting that they have better quality, and can deliver a faster turn time, something is going to break down.

In the communication industry, a few of my colleagues like to say "cheap, good, fast; pick two." Then again, I'm not sure all of them are delivering on any of those points given some of the work produced lately but the accounts keep paying.

Oh my, darn, see that, you're right. :)

Best,
Rich

Jennifer @ Money Saver 101 on 2/25/09, 3:24 PM said...

One of the few moments I'm glad we're allergic to peanuts around here.

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