Many Have a Beef With 2007 Crisis Victim

Put down that burger while you read this unfortunate story. It's a story of a 67-year-old company that became complacent, took short cuts apparently to save money, and declared bankruptcy shortly after its smoldering crisis became news.

You probably read about Topps Meat Company last fall. Or maybe you were one of the victims. Topps produced frozen hamburgers for distribution through Wal-Mart as well as schools, restaurants, hotels, and hospitals. An E. coli outbreak sickened at least 40 people in eight states and resulted in the recall of 22 million pounds of frozen hamburgers -- a full year's worth of production at the Elizabeth, New Jersey, processing plant. AP Reporter Jeffrey Gold investigated how such an enormous recall and the demise of this company happened. (http://www.app.com/apps/pbcs.dll/article?AID=/20080609/BUSINESS/806090305)

Gold's article showed a company ripe for a crisis:

• Topps didn't test some raw meat for potentially fatal bacteria and failed to follow through with daily cleansings.
• The company did not require that every batch of meat from slaughterhouses be certified free of E. coli.
• Topps decreased end-of-line testing for E. coli from monthly to three times a year.
• Meat ground on one day could be reworked with meat during another production cycle. That's not illegal, but food safety experts say it expands the risk of contamination. A careful company wouldn't do that.
• Federal inspectors criticized sanitary measures at the plant, citing "product residues observed on product contact surfaces" and "recurring deficiencies of unsanitary equipment," including "gouges, cracks and tears" on a conveyor belt.
• The USDA isn't blameless. Federal food inspectors overlooked crucial evidence that Topps used risky processing procedures and employed a flawed food safety plan.

With production halted and with the cost of recalling a year's worth of production, Topps closed its business on October 5, costing 87 people their jobs. Topps filed in late November to liquidate in bankruptcy court. Its assets were sold Jan. 8 for more than $1.25 million. More than 5,000 creditors, which include supermarkets and individuals who bought hamburgers, have unsecured claims of about $1 million. At least three families have sued the company, claiming relatives became ill from its hamburgers. They are seeking shares of insurance payouts that could total $22 million.

The Institute for Crisis Management works with many companies every year who don't want to be the next Topps Meat Company. But more organizations appear in the news just about daily who didn't have the foresight to predict and prevent crises. And we see others in the midst of a crisis who fail to manage communications messages and flow successfully. Effective crisis planning and training cost money and take time. Do you suppose Topps' management would happily spend whatever it would take to go back in time and do a lot of things differently?

Louisville Plant Downsizing Is Part of a Larger Crisis in America

I regretfully must write a eulogy today. I mourn the loss of my former employer, Rohm and Haas's Louisville plant, and industry in general across the country.

Rohm and Haas this week announced it will close one of its production units in Louisville and significantly reduce production in another unit. These changes will eliminate 220 jobs, bringing the plant's employment to about 110. Most of these lost jobs pay between $60,000 and $70,000. In the early '90s we had 800 employees. By 2004, when the plant eliminated the communications function I led, we were down to 500-some. Today there are 353 and the number is dropping again. Rohm and Haas's Rubbertown Neighbor, DuPont Performance Elastomers, closed earlier this year, costing about 200 jobs, and is currently being dismantled.

What's happening to Rubbertown isn't at all unusual. According to The Courier-Journal (http://www.courier-journal.com/apps/pbcs.dll/article?AID=2008806180822), Louisville has lost 19,000 manufacturing jobs since 1999. The community faces the possible closure or further downsizing of its for-sale General Electric Appliance Park. Ford is considering what cutbacks it may add to cutbacks already at Louisville's two assembly plants.

What's happening to all these good-paying jobs? The chemical industry provides an answer. The American Chemistry Council says in 1995, the U.S. had a positive balance of trade in chemicals of $20.5 billion. Just seven years later, we were importing more chemicals than we were exporting, and by 2005 we had a trade deficit of $8.8 billion. The Louisville plant manager told The Courier-Journal that some of the plastics additives products now made in Louisville will someday be made in Singapore or Scotland instead.

Rohm and Haas was the best place I ever worked. The plant had good people. It sponsored training programs (called Rohm and Haas University), sponsored an annual picnic and children's Christmas party, formed an Organizational Development Department to help employees communicate face to face more effectively, and provided me with a budget that made possible TV ads and national-act concerts for the community. I watched as those amenities disappeared, one by one, and my budget shrank to a point where it paid for salaries, a more modest contributions program, and not much more. Public Affairs ultimately followed Organizational Development out the door.

Not to boast, but we were very good industrial neighbors. We were instrumental in starting up after-school programs and supporting education with mentoring, Junior Achievement, and financial support. I started a non-profit corporation for an economically challenged neighborhood near the plant so we could raise money to support the Kids' Club Rohm and Haas created. Just as I had to watch all the nice things that made Rohm and Haas such a great place to work go away, I am seeing programs that helped kids and families lose funding and the employee volunteers who made them successful. Of course the city and state are losing all the business taxes and individual taxes, and merchants are losing the dollars once spent by 800 Rohm and Haas employees.

This is happening all over the country. Babcock & Wilcox was my first PR job when I left the news business. The steel tubing manufacturing plant employed 5,000 people in little Beaver Falls, Pennsylvania. A few years after I left, the plant and company were virtually all gone and my hometown was changed forever.

Today I write about a different kind of crisis than I usually blog about. It's a crisis of lost jobs, lower wages, $130 oil, and $4 gasoline. It's a crisis that every business shares. Your organization is assessing what measures it needs to take to survive and prosper in this changing economic environment -- or if it isn't planning and taking action, what are you waiting for? In addition, we need to consider what messages we need to deliver to key stakeholders like employees, investors, analysts, government leaders, and community members. Let them know what steps you are taking and will take to keep the dam from busting. Communicating effectively, honestly, and often has always been important. That's the one thing that hasn't changed.

The WVU Story: Recognizing Land Mines and Yelling 'Look Out' Are Roles for Communicators

I suppose I've sat through meetings where decisions are made that I don't fully agree with, yet I decide to hold my tongue because it was no big deal. Other times, when the alarms went off in my brain, I didn't hesitate to call a timeout and express my concerns. Certainly a senior communications manager needs the sensitivity and experience to smell a dead fish in the room. Unfortunately for West Virginia University, that didn't happen last October. The university has paid the price for the past six months in terms of embarrassment and credibility. The president paid with his job.

Heather Bresch is an executive at Mylan Inc., a generic drug manufacturer. She also is the daughter of West Virginia Governor Joe Manchin. When Mylan promoted her to chief operating officer, the Pittsburgh Post-Gazette questioned a release that claimed she held an MBA from WVU. At first, the newspaper was told she did not finish her degree. Bresch, meanwhile, put in a call to WVU President Michael Garrison, a family friend and former business associate. Days later, university officials reversed themselves, citing a record-keeping error. The university indeed had given her the degree -- but not until 10 years after she last attended classes.

Trouble really began on October 15, as eight officials and faculty members, including the executive officer for communications, met to discuss a sticky political issue. Translation: a smoldering crisis. Imagine you are in the room. The discussion involved Bresch's degree, which she claimed to have earned in 1998. There wasn't much evidence to suggest she had. Bresch told Craig Walker, chief of staff, by phone that then-M.B.A. Program Director Paul Speaker gave her permission to substitute work experience for actual course work. (Speaker later said he did not.) Also, an unofficial list of graduates included Bresch, but the list showed she graduated in 1999, a year later than she claimed. The final evidence was a mixup in the business school with another student's grade, lending credibility to the theory that this was just a paperwork mistake. Evidence to the contrary included official records indicating Bresch didn't complete course work, no sign she had paid tuition for the classes in question, and a professor's statement that he had no recollection or record of Bresch completing a course for which she somehow had been given a grade.

If you were the communications officer in that meeting, what might you have said? He must have known that: a) This was the governor's daughter and a corporate executive -- a high-profile individual; b) This was a family friend of the university's president; and c) Mylan's chairman, Milan Puskar, is WVU's biggest benefactor. The communications guy, or someone in the room, should have anticipated potential for scrutiny of a decision to retroactively award a degree in this case. Instead, the participants concluded that the information available to them was inconclusive. Dr. R. Stephen Sears, dean of the business and economics school, had the final authority to validate Bresch's degree. Sears declared the case for and against the degree was a tie and suggested giving Bresch the benefit of the doubt. According to a five-member independent panel that completed a three-month investigation in April, pressure to resolve the controversy in Bresch's favor was "palpable," with some participants deciding not to "rock the boat" with tough questions. Motion carried.

That's how lots of crises begin.

The panel's report concluded Bresch was 22 credits shy of the 48 credits required. WVU rescinded the degree bestowed upon Bresch. But the story doesn't end there. As usual in smoldering crises like this one, there are aftershocks that may be felt for some time:

• Garrison, the university's president, resigned on June 6, effective September 1. He was hired just last year, amid charges of cronyism and lack of credentials by some, due to his political connections and past service as a lobbyist for Mylan.
• Mylan corporate executives filed information with the SEC that said Bresch, the COO, had an MBA. That faulty information needs corrected. Will this have an effect among investors and analysts?
• Bresch's daddy is running for re-election. Could this have an impact on the race?
• And there are lasting credibility issues for WVU. According to the Pittsburgh Post-Gazette on Sunday, "West Virginia University now must work to regain credibility lost in what arguably is the core of any academic institution -- the integrity of its degrees. University leaders and others stress that what WVU does next will determine how lasting the damage is...."

It's important for us communicators to be the conscience as well as the eyes and ears for our organizations. We're getting paid to sound alarms before the fire ever starts. Often we take precautions for events that never come to fruition. That's all right. A baseball player can be considered good when he succeeds just three out of every ten times at the plate. Err on the side of caution.

If you want to read more, the Post-Gazette has a long list of articles it published on the subject. See http://www.post-gazette.com:80/pg/08013/848514-28.stm.

How Open Is Your Management's Door?

Larry Smith, president of the Institute for Crisis Management (http://www.crisisexperts.com/), preaches an open door policy is one of the best ways to avert smoldering crises. If your organization has a "kill the messenger" mentality, employees will be afraid to raise concerns, which could grow into costly and embarrassing crises.

Take, for example, the latest tiff between the air traffic controllers and the FAA. Earlier this year, both sides agreed to create a reporting system to let air traffic controllers point out safety problems without fear of punishment. A similar deal has been in place for years with airlines, pilots, and airports. But now the FAA is balking a bit. It wants the right to terminate traffic controllers for poor performance. Patrick Forrey, president of the National Air Traffic Controllers Association, is concerned that controllers who report their own mistakes could risk losing their jobs, their retirements, and their unemployment benefits. If that is the case, he argues, controllers won't self-report. (http://www.courier-journal.com/apps/pbcs.dll/article?AID=/20080611/NEWS01/806110864)

Let's hope they can reach a compromise. I don't want incompetent air traffic controllers directing my flights into the airport. At the same time, I don't want controllers hiding their mistakes and safety deficiencies to protect their jobs.

The point is to make sure your employees know they can approach management anytime with concerns about safety, environment, harassment (see the post below and then the one below that) or any kind of wrong-doing. At the chemical plant where I worked, all chemical operators and maintenance employees knew they had the right to shut down any operation immediately if they felt it was unsafe to continue. At the corporate level, an ombudsman was available to receive anonymous concerns from employees worldwide. I think that kind of environment is worth working toward if you're not there already. Employees who know they can convey information without reprisals can be invaluable to nipping a crisis in the bud.

Another Allegation of Harassment: 'It Trickled Down From the Top'

The following is a quote from a woman suing her ex-employer for sexual harassment, among other offenses:

"It was the nature of the people I worked with, the people who ran it. It trickled down from the top. It's just the way things are in the garage."

Substitute "office," "shop," "assembly line," or "retail center" for the word "garage." Might it describe your organization? It better not. In this case, the speaker is Mauricia Grant, who worked as a technical inspector responsible for certifying cars in NASCAR's second-tier Nationwide Series until her termination last October. She's suing NASCAR for $225 million, alleging racial and sexual discrimination, sexual harassment and wrongful termination (http://www.courier-journal.com/apps/pbcs.dll/article?AID=/20080611/SPORTS/806110998/1002/SPORTS).

While trying not to repeat myself from the post below about Tavern on the Green, let me italicize and underline the importance of ensuring your workplace culture is one that doesn’t tolerate sexual and racial harassment. (Wait. This program doesn't let me literally underline anything.) See also the good comments made by Michael Gooch to my post below. By the way, whatever your personal or religious feelings, your anti-harassment policy must apply to gay employees, too.

Grant's lawsuit lists 23 incidents of alleged sexual harassment and 34 incidents of alleged racial and gender discrimination during her nearly three years of employment. Grant said she complained numerous times to her supervisors about how she was treated, but they took no action. One time, according to Grant, Nationwide Series Director Joe Balash, her immediate supervisor, simply dismissed complaints. On another occasion, she claims Balash actually participated in the harassment.

What is NASCAR's public response? Spokesman Ramsey Poston said, "As an equal-opportunity employer, NASCAR is fully committed to the spirit and letter of affirmative-action law," adding NASCAR has a zero-tolerance policy for harassment.

Probably everyone has a zero-tolerance policy for harassment. On paper, at least. You should talk to employees. What is the real work environment like in the pits? Is anything driving them to frustration? How can you be sure your anti-harassment efforts stay on track? Doing so may help you avoid the bumpy road that NASCAR must navigate now.

Sexual and Racial Harassment Are Costly in Many Ways to Individuals and Organizations

What is your organization doing to prevent sexual harassment? What stance will you take with your various key stakeholders if employees claim they were sexually or racially harassed? If you think you can manage such accusations on the fly, you better think again. You need a plan in place.

Tavern on the Green is a landmark restaurant in Central Park. Open since 1934, it's the self-acclaimed highest-grossing independently owned restaurant in the United States, with annual revenues in excess of $34 million and over half a million customers a year. Tavern on the Green agreed last week to pay $2.2 million to settle a lawsuit in which the Equal Employment Opportunity Commission had accused it of severe sexual and racial discrimination.

According to a New York Times story, Kam S. Wong, a lawyer for the EEOC, stated, “Verbally, female employees were subjected to repeated comments related to sexual positions, sexual acts, female genitalia and even demands for sexual favors. Physically, female employees were also grabbed, groped and fondled.” (http://www.nytimes.com/2008/06/03/nyregion/03tavern.html?_r=1&oref=slogin) The suit accused a top manager of severely harassing black and Hispanic employees, calling them "ignorant immigrants" and making fun of their accents.

I think worst of all is the commission's charge that the restaurant retaliated against employees who objected to the harassment by reducing work hours or pay. Martha Nyakim Gatkuoth, a 25-year-old former hostess at Tavern on the Green and a native Ethiopian, wept openly during a news conference. "In the part of the world where I’m from, you can’t talk about such things because automatically it’s your fault.”

According to the New York Times, "When the E.E.O.C. first filed the case, it asserted that the restaurant — not just one manager — was guilty of sexual harassment because it “knew or should have known of the severe and pervasive harassment, yet failed to exercise reasonable care to prevent and correct promptly the harassing behavior.”

“Unfortunately, the restaurant industry is still rife with harassment, and well-known, high-end restaurants are no exception to this,” Wong added. “This settlement should send a very clear message to remind all employers and employees alike that the EEOC is here to vindicate their right to be free from discrimination in the workplace.”

Does it send a clear message to you? Does your organization do all it can to prevent threatening or humiliating behaviors? Is your organization's culture one that has a clearly communicated open-door policy in which employees don't fear retribution for speaking up? As this story makes clear, we need to consider those from other cultures who may be even more intimidated than U.S. natives.

Shelley Clark, a spokeswoman for Tavern on the Green, said that the restaurant, in the settlement, specifically denied any wrongdoing. “Tavern on the Green is pleased that this long-pending dispute has been amicably settled,” she said. “The management staff whose alleged actions were cited in the filing have not been associated with the restaurant for years. Tavern on the Green always has been and will continue to be committed to providing a safe, nondiscriminatory, nonretaliatory work environment for its employees, the vast majority of whom have been with the restaurant for more than a decade.”

I think her statement could have been a little less stuffy and a lot more forceful: This behavior has never been tolerated and never will be. Some individuals acted inappropriately and were relieved of their jobs long ago after the problem came to our attention. We have hired an employee ombudsman who employees can contact anonymously if they feel they have been harassed or if they suspect other illegal activities. And we will sponsor annual sexual harassment training to help all understand what is appropriate behavior and what isn't.

In your crisis plan, make your statements strong when strength is called for. If the restaurant was 100% innocent and took extreme measures when the harassment came to managers' attention, Tavern on the Green was a victim of its mid-managers' actions. In that case, speak like a victim. Be outraged. Be incensed. Commit to never let it happen again under your watch.

School Leaders: What Are You Doing to Prevent Bullying -- And the Crisis That May Follow

Another article in The Courier-Journal (Louisville) tells of anguished parents who are suing a school district because of bullying. Their son, a 13-year-old at Allen Central Middle School in Prestonsburg, Kentucky, committed suicide last November because of what the parents call daily harassment and bullying. They claim school officials never told them. The suit names not only the school district, but the principal and former superintendent.

I blogged on this same subject some time ago. Bullying is something I personally feel very strongly about. I tutor kids at Huntington Learning Center and on my own, and I value each one of them. As a society, we must value, nurture, and teach each kid for the sake of the nation's future. When we baby boomers were growing up, our society had more kids than schools could hold. There weren't so many elderly people then. Now the pyramid has inverted. The average family size in the U.S. is less than two kids. The oldest of baby boomers are beginning to retire. People are living longer than they did a generation ago. How do we pay for health care and nursing home care for an enormous population of aged baby boomers after the workforce has shrunken because so many have retired? We need every kid we've got. They must be educated and trained to be productive adults. We have no disposable kids!

That's a smoldering crisis our government seems to be ignoring. But I digress. The heart of the bullying crisis is what it does to kids who may be permanently scarred -- or may even die -- because they were bullied. Next, obviously, school districts need to protect tax payers' dollars by making bully prevention a priority so that they stay out of court or, at worst, limit liability. Ask your kids' school what its bullying policy is. Ask your elected state officials what they have done -- or will do -- to protect your children from bullies. Having a plan isn't enough. Look to see how the policy is being enforced.