This week at the Restaurant Association of New Zealand (RANZ) annual Summit, the Managing Director of Salt & Pepper PR Jen Boyes delivered a helpful presentation on the NOTs and WHATs to do in response to a public relations crisis. She unforgettably illustrated her point using the 2015 Chipotle Norovirus outbreak and CEO Steve Ells’ inability to cope with the America-wide social media tsunami.
There is a great deal to make from this story. Jen’s presentation focused on Steve Ells and his lack of a succinct response coupled with his over-promising of guaranteed food-safety in the future, which was of course followed by many more reported Chipotle cases of the Norovirus. E. coli and Salmonella.
To put the Chipotle disaster in its American-sized perspective, long considered the progenitor of Fast-Casual, and darling of innovation, the company had reached the annual revenue of over 2.62 billion only to see it plummet to 1.83 billion in the last financial year. Interestingly, despite several Chipotle restaurants having to close during the outbreak, more opened; the last count we can find is over 2,000. The issues have been widely reported and complicated, ranging from supposedly a series of code violations, uncontrolled growth and the complexities of dealing with fresh food. Chipotle is likely to rise again; probably with more than a few lessons reflected and entrenched in their systems. One American commentator has asked would Warren Buffet buy Chipotle stock? Maybe. It all depends on what is going on right now within the company’s leadership team.
I’m a fan of small-business learning pre-emptive lessons from big companies, and here there are some obvious lessons … and some not so obvious.
- The most obvious lesson was the focus of Jen’s presentation. How should you respond after a crisis? She effectively compared Steve Ells’ 2015 interview on the ‘Today’ show with Domino’s Pizza CEO Patrick Doyle’s apology after a particularly embarrassing episode in 2009. The differences are fairly clear and easy for all to compare at leisure.
It’s true, deal with a crisis badly and it could make a bad situation worse – even if your heart is in the right place. It’s enough to send shivers down the spines of every Hospitality Business owner.
But, of course, many restaurants, particularly large-chains have gone through periods of bad publicity, sometimes extremely bad; Kentucky Fried Chicken, Subway, Jack in the Box, McDonald’s, Taco Bell to name but a few … my personal favourites are Burger King’s use of horse meat and Coca-Cola’s Fanta profits from the Nazi’s during WW2. But these companies didn’t botch up badly during the reign of social media. Chipotle’s multi-faceted botch up has happened in quite a different sort of cultural environment.
Here’s the extremely serious message that Jen aptly pointed out; we do business in a ‘shared economy,’ in a period of interactive marketing and while that can make marketing more powerful than ever, it can also create the most devastating consequences – especially for small and medium size businesses. The stakes are higher than ever – the jury is larger, more vocal than ever, and less tolerant of hypocritical behaviour.
The lesson: Don’t put a 21-year-old waiter in charge of your social media just because he’s the only one that knows how it all works. Take the role of social media seriously; it has created a diversity of voices and an homogenisation of opinion.
- The less obvious lesson from the Chipotle incident is not about Public Relations, but about practice. What is really interesting here, is the breadth of malpractice and systematic failure reported after the vast-string of connected (and unconnected) Chipotle food-poisoning cases across nine American states. In other words, why was the Centre for Disease Control and Prevention involved before Health and Safety?
We’ve all become a bit cynical about the seemingly draconian, over-zealous, and often arbitrary Health and Safety Legislation in New Zealand, but there is another side to the story well-illustrated by Chipotle. There is the argument that Chipotle’s determination to use fresh produce and traditional methods of preparation, rather than automation and state-of-the-art technology, left it open to higher risk. There may well be an important point here. As we go through another home-grown, rustic, natural and ‘close to the source’ love affair with our food it’s important to remember that food hygiene is just as important as ever. We may like our food to look, and be, less plasticised, but that’s no reason to embrace the current trend of uncovered café food that is currently ‘on trend’ all over the country, or relax 21st Century hygiene standards.
The Lesson: There’s a little bit of the ‘there but for the grace of God go I’ in the Chipotle story, so now is a good time to systematically re-visit your food hygiene practice. Ironically, Chipotle’s current practice may be a good place to start. Their systemised ‘alarmed’ 30min hand-washing practice is interesting, as is their routine checking of staff wellness at work. The key-words, of course, are ‘systemised’ and ‘execution.’ Are your Health and Safety practices the best they can be?
Tuesday 11th October – The Hospitality Company