By David Tate ,
Retail, Food, Beverage and Leisure Industry Leader, UK & Ireland
12/10/2021 · 4 minutes read
In recent years, the breadth of a business crisis has grown exponentially. Crises like cyber-attack, food product recall, mislabelled foodstuffs causing an allergy response, disgruntled workforce, supply chain issues, modern slavery, and activist damage have all become more prevalent within the food and beverage industry over the last few years.
Organisations have also become far more than just physical assets and the products they produce. Intangible assets dominate most consumer brands’ enterprise values. It is therefore important to focus on mechanisms to prevent intangible asset damage and protect against the consequences of an event that impacts, for example, a business’s brand or reputation. It is imperative to build an organisation’s resilience against these types of event.
Reputation is crucial to continued growth and customer trust. Intangible assets account for over 80% of the average company’s value, of which reputation is a major part; 90% of businesses report that they have inadequate data to manage reputation. But, what does that mean for food and beverage businesses?
As our society becomes more socially aware, it becomes easier for companies to inadvertently take the wrong path — and potentially end up on the wrong side of ever-increasing public activism. Instances where a company’s senior management is embroiled in a public corporate crisis are becoming more common. From 2015 – 2020, 69% of leaders experienced at least one corporate crisis. Acknowledging that reputational risks exist is one thing, having a tested plan and a trained and confident response team is another.
A response framework is essential during a crisis, this helps to ensure that companies have an appropriate response to crisis events and can demonstrate resilience. Strong and effective leadership during decision-making will help to build trust with stakeholders. Leadership through a crisis can be a brutal and confusing trial by fire for many, and it requires a great deal of individual and collective preparation to be successful. The laying of this vital groundwork should be done before the crisis arrives.
When determining the problem, call upon external advisers to provide additional capacity and support.
Avoid decision paralysis. While there will be differing opinions from all sides — such as legal, financial, regulatory, and consumer — waiting to hear each argument will stall the process. When speed is of the essence, trained, confident, and competent crisis leadership is vital for making the right decisions at the right time.
Training and education is critical. A powerful response to crisis takes practice, coaching, and training to ensure executives can respond to the pressure appropriately.
Consider the channels you use to deliver your response. You will have to engage with the media, which requires a specific skillset. Having a senior voice and taking ownership of the immediate problem can be of enormous benefit to managing the reputational damage.
Think about the three key phases:
Planning and testing will support the success of these phases.
A swift, accurate, and well-articulated response is now essential to build trust. Formulating an approach to crisis prior to a disaster will not only support you should the worst happen, but also enhance resilience and protect enterprise value over the long-term.
1 World Intellectual Property Organisation, 2016