Learn from the listeriosis crisis and disaster-proof your business

The listeriosis outbreak has had far-reaching consequences for multiple businesses; not just Tiger Brands. JSE-listed RCL Foods predicts listeriosis-linked losses to equate to R75m, with a profit impact of R20m a month. By their very nature, crises are usually unforeseen and wield potentially devastating consequences for the businesses they directly – and indirectly – impact. Think of the Ford Kuga fires and Samsung Galaxy Seven’s flawed battery flames. When these catastrophes hit, businesses have to act fast to protect and rebuild their reputations.

Kobus Engelbrecht, Marketing Head of Sanlam Business Market , believes there are many business lessons to be learned from the listeriosis crisis. While unforeseen disasters can rarely be avoided altogether, business owners can mitigate risk and limit fallout by having a plan in place.

Engelbrecht says, “Every business needs to have a plan to deal with crises, even before any issue arises. A crisis needs prompt intervention so as to avoid the situation spiraling further out of control. There’s no time to start the process from scratch. If everyone’s scrambling around trying to figure out what to do, mistakes happen and often, a reputation is further compromised.”

Here, Engelbrecht suggests six important steps business owners need to take to prepare for possible crises and to help ensure best practice when they hit:
  1. Workshop a plan ASAP: Have a plan that addresses exactly how a crisis would be handled. It does not need to be too specific because we often don’t know what the nature of the crisis will be. Remember to include basic stipulations such as your policy on the key role-players, required timelines on managing the situation, the channels available to you (including owned channels), your single media contact person and identified spokespeople. This process needs to be thoroughly work-shopped and the relevant people briefed and trained if necessary.
  2. Scenario planning: This is the critical process of mapping out a myriad scenarios you could potentially face, with best-practice responses to each one, e.g. how to react in the case of operational standstill, labour relations fallout, natural disasters, etc. This prepares you to act quickly and in the appropriate manner and will differ from one industry to the next, according to associated risks typified to each sector. Your place in the value chain will also suggest possible issues. For example, if you are in manufacturing, you carry the risk of defects in your products, while if you are a distributor, your suppliers will carry the risk of defective products.
  3. Limit reputational damage: A business owner should ensure there are good quality control measures in place across every aspect of the business, and that the business is insured against the risks that cannot necessarily be managed. Be honest from the outset about your product or service. Do not promise something you cannot deliver, because you will be caught out.
  4. Get covered: Assessing the type of insurance your business needs and, importantly, using a credible short-term insurance broker who can help you navigate the process is an important step. This professional will be able to advise you on which risks you can insure yourself. Business interruption insurance, for example, is designed to cover loss of income when you have to close your business temporarily because of events beyond your control.
  5. Seek professional counsel: Before you do anything, get legal advice. It is also advisable to obtain the services of an external communication or reputation specialist to help you with your communication. Be honest and open. If you need to apologise, do so – taking ownership is often imperative to rebuilding a reputation.
  6.  After the crisis: Once a crisis is over, it’s tempting to breathe a sigh of relief and put the entire ordeal behind you. Don’t miss the opportunity to analyse what did and didn’t work and what measures need to be put in place for next time.
Engelbrecht says, “Learn from what you did right and what you could have done better. Also study how other businesses have handled the crises they have faced because the reality is that it’s much better and cheaper to learn from the mistakes of others.”

For more information on Sanlam’s value proposition to business owners, visit www.sanlamsme.co.za or phone 0860 100 539.