TACO BELL: HELP I’M BEING SUED

Posted in Business Crises We Create, Crisis Communication Response, Liability Communications, Litigation Communications, RETAIL FOOD CHAINS, Taco Bell, What to do when you are sued on February 16th, 2011 by mnayor

Ouch! On January 25th it was reported that Taco Bell had been hit with a class action suit asserting that the company’s claim that it uses seasoned beef or seasoned ground beef in its products is false. Plaintiffs allege that the Company’s beef mixture is only 35% beef with the rest a mixture of oats, soy, maltodrextrin and soy lecithin and water. Monetary damages are not claimed. The plaintiffs want to compel Taco Bell to be honest in its advertising.

After a couple of weeks we have not heard from Taco Bell other than it will “vigorously defend the suit”. No damage control here.

Perhaps the Company feels the public will soon forget all about the suit. And maybe it will. After all, not too many people expect ground fillet mignon in their $1.00 wraps. But then again, not too many people expect adulterated food either. Time will tell whether sales are negatively impacted. So what’s a company to do?

Honesty. It’s a difficult concept to play with sometimes. The public likes your product the way you make it. You actually disclose some information on your website (how many people research product ingredients on a website before purchasing?). No harm has apparently been done (although some of the additives are common allergens).

How about some real facts. Instead of ducking down and waiting for the shots to subside (along with the jokes), why not deal with the issue head on. Research carefully. Analyze your products and make full disclosure. Publicize the nutrition value of each product as well.

Most companies and their attorneys play it very close to the chest when they are being sued. But it is not always necessary to be 100% tight-lipped. The goal of any company in this type of circumstance should be to be as up-front as possible without exposing itself to greater liability. In this instance Taco Bell isn’t even being sued for monetary damages. And as for potential suits in the future, any good laboratory can discover the ingredients in Taco Bell products. There are no secret formulas.

After analysis, the Company should make a determination whether it wants to change its recipes or not. It is conceivable that TB may announce that it is retaining its recipes because of their good nutritional values. It may change the wording of its “beef” content. It may upgrade its recipes (with great fanfare). Or it may just let the marketplace decide and let the chips fall where they may. If it chooses the latter it takes a risk (that may be justified in its mind) but it has not taken advantage of the opportunity to sell itself and burnish its image if it can inform the public about some positive information.

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THE DIFFERENT USES OF REPUTATION MANAGEMENT

Posted in managing your reputation in good times as well as bad, publicizing good works, reputation management, the benefits of doing no harm on February 1st, 2011 by mnayor

In times of business crisis, many executives turn to reputation managers or public relations consultants to stem a tide of negative publicity, staunch the flow of bad press or put a spin on events that will make their companies look better. But managing your reputation is far more than that. Many companies understand the benefits of continual reputation monitoring as an integral part of their successful management and capitalize on good news on a regular basis.

Why are so many companies today fighting fires instead of basking in the sunlight of good press? Perhaps it is because from the inception of our country the concept of capitalism has been somewhat muddled. Capitalism envisions private ownership and means of production with the resulting benefits or profits to those same private owners. It is the counter theory to government control. Capitalism is also a theory of freedom – free markets and freedom from undue government interference.

Our founding fathers did not, in all likelihood, support these great ideas for the purpose of allowing private enterprise to take advantage of the public. Of course, our history is replete with charlatans and snake oil salesmen. After all, “there’s a sucker born every minute”. But one would be hard pressed to believe that an overriding principle of capitalism is to milk the public for private gain. Instead, capitalism is a catalyst for stimulating individuals to take risks and seek their own rewards by providing for a free market and private profit. Hopefully, those who engage in capitalistic endeavors are creative, savvy, have a competitive advantage, a better product, or better marketing and distribution channels.

An adage that actually predates the Hippocratic Oath is “First, do no harm” or primum non nocere. Its meaning is obvious, especially in the medical profession. But it certainly has applicability to the business world as well. In the quest for profits, a business should “first do no harm”. Unfortunately, for some the quest for profits is overriding and justifies questionable actions. The potential for profit is great and the risk either small or not easily measurable.

While the vast majority of business managers do not have a wish to do harm, how can a business capitalize on that achievement with the public? Actually much can be made of doing no harm: honors from customers, industry awards to managers, press releases announcing “50 Years of Service to the Airline Industry”, and so on. Naturally, new improvements in existing products are another whole source of good press.

So, doing no harm can in fact enhance a reputation. But doing “good” can enhance it even further. New innovations and developments, acquisitions, a new plant, support for local and national charities, management participation on government advisory panels, the list is endless.

Reputation management is an ongoing process. It is not something that is rolled out in emergencies to provide cover. In order to capitalize on a reputation – first, do no harm. The rest will follow.

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SUCCESSION PLANNING FOR FAMILY BUSINESSES OR GIANT PUBLIC CORPORATIONS

Posted in Letting go of the reins, orderly transfer of executive management, poor succession planning creates concern, succession planning avoids a crisis on February 1st, 2011 by mnayor

Sadly Steven Jobs has taken another leave of absence from Apple for health reasons. Everyone wishes him well and hopes that he deals with his issues quickly and successfully Timothy Cook, the COO has been left in charge. Stockholders and other important stakeholders are concerned about the future of the company.

Many corporations have anonymous management with revolving doors. Executives change. Styles change. Some executive suites are inspirational. Others are lackluster. Some companies seem to be driven more by their middle managements than by their top earners. One might even say that about governments. Leaders come and go, but the core management often goes on regardless of who is at the top.

This is not true of Apple. Steve Jobs is the personification of this, the second-largest company in the U.S. (in market capitalization), and by all accounts, rightly so. Key persons or a key person sometimes are a company. We see this most often in privately-held family businesses, especially when the founder dies and his children are not heirs apparent, either because they are unqualified or not interested. We also see it in some partnerships when one partner is the visible soul of a company while the other(s) are strictly behind-the-scenes. In some cases the companies are perfectly capable of continuing, oftentimes even more competent and competitive than under their old regimes.

Yet succession planning is often an orphan and gets paid little attention. Such benign neglect can lead to a crisis in at least two ways. First, clearly some companies don’t address the issue at all. The “old man” figures he can go on forever or can find someone to take over “when it’s time”. This mentality of course has the makings of a disaster, not just a crisis. In situations involving private companies, widows sell for ten cents on the dollar, or a manager takes the customer lists and several employees and runs for the door. In a public company, an executive may be anointed as interim CEO, or a search committee is formulated by the board and mistakes in choice are often made.

But let’s assume that enlightened management has a successor lined up. We have all seen these best laid plans fall apart. The successor bolts. The successor and the current CEO have a falling out. The current CEO is not quite ready to cede authority and control. Some new potential executive is noticed. Many things can upset a plan. Which leads to the second way poor succession planning can create a crisis, and why Apple may be a good example.

Succession planning requires acknowledgement of new blood and publicity so that the public and stakeholders can get comfortable with new names and faces. The old guard must not hesitate to hand over the reins and leave the stage. It may be a one year plan. It may be a five year plan. But unless there are compelling reasons to delay, the plan must be followed. In the interim, the new person must be given face time and confidence must be built.

Steve Jobs’ announcements have created a great deal of speculation about Apple. In 2004 he had surgery for pancreatic cancer. Upon his return, grooming a successor or successors should have begun. That may have happened. But just as important, those new faces should have been given more exposure. Others should have become voices for Apple as well as Steve Jobs. The public should have begun to recognize a Tim Cook or someone else so that Apple would be seen as a continuing entity with competent and creative people at or near the helm. Instead the public continues to speculate about what happens to Apple without Jobs.

Steve should and will relinquish his hold on Apple one day soon and when that day comes the public should be comfortable with its new leader, and the company’s continued capacity for technological innovation. Perhaps Apple should take a page from Google’s recently announced management shake-up which will see its dominant chief executive, Eric E. Schmidt bumped up to executive chairman, and co-founder Larry Page become chief executive in a couple of months. No matter what the reason, Google’s change is a clear indication that it is planning for the future.

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