This article was first featured in Business Report.
South Africa, March 2018: KFC and Enterprise Foods have been dominating the local and international news in the last two months, with KFC losing out over its logistical nightmare and Enterprise located as the source of the listeriosis outbreak. In both cases, a crisis of leadership is apparent. When a catastrophe hits and a company doesn't have resilience built into its culture, that's when irreparable reputational damage can become a threat. From KFCs perspective, a lack of communication internally catalysed chaos. For Enterprise, a lack of accountability to the public is causing on-going harm to Tiger Brand's image.
Enterprise is refusing to take ownership of the consequences of the listeriosis outbreak and has been on the defensive from the get-go. Additionally, there are now reports that its workers at the Polokwane factory won't be paid. With 183 people dead and numerous staff employed at the factory, leadership at Tiger Brands needs to step up and start to honestly communicate with the public, according to a big-picture plan. A crisis of this magnitude has the potential to derail a business completely. That's why leaders have to ensure resilience across every faction of a business and have a clear communication plan in place.
Here, I use KFC and Enterprise to illustrate key learnings on fostering resilience through good leadership:
What happens when the chickens fly the coop?
The KFC (owned by Yum! Brands Inc.) crisis in a nutshell: From 14-28 February, KFC experienced unprecedented chicken shortages when it switched to DHL from Bidvest Logistics in an attempt to cut costs. By 18 February, only 266 of its 900 UK branches were open. Following the chicken crisis came an unfortunate gravy crisis, causing further franchises to close.
Lessons from losing out over logistics:
- Have a plan for change: In a VUCA (Volatility, Uncertainty, Complexity & Ambiguity) world, agile change is imperative for long-term business survival. But, it needs to be carefully managed. KFC made a big change without thinking through all the prospective consequences. The lesson here is to pre-emptively foster resilience by having key decision-makers and problem-solvers sit round a table and imagine multiple worst-case scenarios with potential solves. Engineers are good at this as they're systemic thinkers who can often foresee complications that could arise 10 moves down the line. From this, a safe plan can be developed and communicated to every stakeholder the change may effect. This needs to include a clear game plan should things go wrong.
- Open up the communication channels: Resilient leaders welcome feedback and foster a culture of idea-sharing by incentivising ingenuity. To do this, open communication channels are key. By inviting criticism and alternate ways of doing things, resilience starts to seep into every facet of a company, strengthening its core culture. To be a good leader, it's vital to let go of ego and arrogance. A leader that people want to be led by has the humility to ask for help. For KFC, open communication channels could lead to the inter-departmental collaboration required to thwart future crises.
- Realise that micro-management is a cluck-up: Leaders need an eye on every facet of a business. They achieve this by delegating critical responsibilities to trusted managers. Trust and communication go hand-in-hand; when a manager is empowered to make decisions and run with something independently, that's when resilience grows. In delegating, a leader can step away and glean a big-picture view of the business and identify core competency gaps – say, in the logistics department, for example – from input from key managers. These then need to be addressed either by grooming emerging executive talent through training and courses or by hiring new capabilities.
- Learn from KFC's FCK-ing good crisis response: 'A chicken restaurant with no chicken is not ideal' – so said KFC's tongue-in-cheek apology, which also saw the letters in the chain's name rearranged to FCK. Yum! Brands ran a full page FCK ad and set up a website directing people to the closest open outlet. They received mass praise for the way they handled the crisis – owning up to it and responding with humour that was completely on-brand. This is an example of a good crisis communications plan being seamlessly executed. In responding so, KFC helped repair its damaged reputation and built its brand's resilience in the public eye.
- Have the grace to back-track: Why did the chicken cross the road again? To get back to the supply company it had before. Resilient leaders can admit to failure fast and learn from it even faster. KFC has handed back some of its logistics business to Bidvest, who has now signed a long-term contract to supply about a third of the fast-food giant's 900 restaurants.
What happens when your polony is a bunch of boloney?
The Enterprise Foods (owned by Tiger Brands) crisis explained: 183 people have died from a listeriosis outbreak that's been sweeping through South Africa. Its source has been identified as Enterprise's Polokwane factory. This has resulted in Enterprise recalling multiple meat products, class-action law suits against Tiger Brands, extremely negative public sentiment towards Enterprise, and polony being the most talked about food on social media in South Africa.
Lessons from the Tiger Brands debacle:
- Protect your reputation: Arguably, Enterprise Foods has seriously mishandled its crisis communications, with a defensive, dismissive response that's done nothing to rebuild its reputation in the public eye. Resilience comes from ethical, honest behaviour. When something goes drastically wrong, leaders need to act decisively without ambiguity: honest ownership is usually the best response. The public want to know what the business knows so it's best to be upfront and try to responsibly rectify the situation as quickly as possible. Remember: a crisis leaves a void that can either be filled with potentially harmful speculation or the information you give to the public.
- Have a post-mortem, not a witch hunt: Leaders within Enterprise will need to pinpoint how the problem arose without conducting a witch-hunt or laying blame. A company is a living organism so pain in one area affects the whole business. The aim of a post-mortem needs to be building resilience by bolstering institutional knowledge. Both the factors catalysing the crisis and the handling of it need to be analysed in an After Action Review held with representatives from every level of the business.