By GREGORY DL MORRIS, an independent business journalist with more than 20 years' experience covering finance, industry and commerce worldwide.
Even as risk managers were assessing the implications of the Chapter 11 filing by meat processor AFA Foods in the wake of the "pink slime" controversy, another media storm broke over Nikki Haley, Governor of South Carolina: she was about to be indicted.
On what charges?
It wasn't true.
A blog post on March 29, for which the poster never checked with the governor's office, was picked up on Twitter. The unsubstantiated claim went viral, and within minutes legitimate news outlets were calling the governor's office for confirmation. The story was quickly corrected and no lasting damage seems to have been done.
For Haley, the storm was an annoyance, but for AFA Foods, a recent media blitz became an existential threat. The company has been selling "finely textured beef trimmings" for years, but soon after their product was dubbed "pink slime" by the media and seen as wildly unhealthy by the American public, the company filed for bankruptcy.
To be sure, AFA was already struggling through the recession and the decrease in beef consumption in the United States.
The drop in orders, along with the negative publicity, were not death blows for the company but the last straw. Other processors like Beef Products, Inc., closed three plants temporarily, but chose to keep paying employees at those facilities at least 60 days' wages.
Three governors, Terry Bradstad (R-Iowa), Rick Perry (R-Texas) and Sam Brownback (R-Kan.) held a press conference at one of BPI's closed plants to decry the unfairness of the media storm, the closing of the facilities, and the loss of jobs. "This is a safe product," stated Brownback. "No one has gotten sick from this product in more than 20 years of use."
The press conference barely made any dent in the conversation. In a stark contrast, the social media frenzy had plenty of firepower. A YouTube video titled "Meat Smoothie" is approaching 200,000 viewers, while videos on the Huffington Post and ABC News have also garnered thousands of viewers.
The Associated Press video of the three governors' press conference has gotten barely a few thousand views.
Crisis risk management experts say that while these media storms are of human origin, they have to be treated like natural disasters: they cannot be prevented, but thorough preparation and planning can go a long way in mitigating immediate losses and long-term damage.
"This goes beyond communication," says Susan Morton, senior consultant with Marsh Risk Consulting. "It starts with senior officers at the company. They have to know what their strategy is -- not just their communication strategy but their overall company strategy. They have to assess what the risks are of a negative news story or blog post on their company, and they have to engage all stakeholders: employees, suppliers, customers, regulators and the media."
Morton lauds BPI's decision to pay their employees at least temporarily while the plants are down. It was not only a wise investment in employee loyalty, she explains, but also precludes one potential avenue of continuing coverage: the hardship of the employees thrown out of work.
"You can't just react and respond to media crises," she says. "If you do you will constantly be back-footed. Of course you have to address issues as they come up, you have to fight fires, but you have to think about how to limit the damage and then repair the damage even as you are still fighting the fires."
April 13, 2012
Copyright 2012© LRP Publications