In 1872, a man by the name of Julius Maggi took over a company from his father. He was the first person to bring out a protein-rich legume meal to the market. Then he followed it up with a soup-based legume meal in 1886, about 14 years later. Julius Maggi was the founder of the company Maggi GmbH in Singen, Germany, which is still there. In 1947, this company merged with Nestlé to bring out what we have all come to know as their flagship product – Maggi noodles.
Today, Maggi noodles is under fire with it being banned across India for having more lead content and containing MSG. it brings to the fore questions about how they are handling it. The jury is still out on whether they have handled it successfully or not. But pundits have been talking about it and drawing leadership lessons from it. I thought it would be good for us to look at it very superficially, given the short time that we have, and see if there are any lessons that we could learn as this continues to unfold, because it isn't over yet.
I think crisis is the crucible in which leaders are either made or unmade, or broken. You either come up and take the heat and hold it and are able to lead during that time, or time will tell whether you are slowly pushed aside and a new person comes to handle a situation that went out of control.
As we look at what's been going on with Maggi, we find various ways in which people say that this kind of a crisis ought to be handled. I was looking at a Wall Street article by Bill George, who is the author of 'True North', and also the former CEO of Medtronic. He says, "There are seven lessons that you can learn through a crisis. One of the seven is: You've got to be aggressive in the marketplace. Crisis offers the best opportunity to change the game in your favor. But you've got to be aggressive about it.
I remember when Tylenol had a problem way back in the 80s; they immediately changed what had happened because 7 people died in Chicago. Bottles of Tylenol were tampered with and injected with cyanide. They changed the bottle and came out with a new bottle that made it absolutely tamper-proof, especially by children. That was a wonderful way of exerting aggression in the marketplace.
Max Depree, management consultant says, "The first responsibility of a leader is to define reality." You've got to look at the situation and understand the reality of it. It's not a time to put your head in the sand and say, "This too will pass." It's a time to look in, take the advice of people, especially people on the ground who are able to tell you exactly what is going on, and then handle the issue.
Doug Yakola, McKinsey's senior partner for their Recovery & Transformation Services, has 20 years of leading companies through crises. He too reiterates, "The first step is to acknowledge that there is a problem." When we look at Nestlé and the way that they have handled it, a lot of people have found problems with the way they have, and I'm sure each one of you on the call has been following to some extent, what's been going on. In your mind I'm sure you've decided whether they've done it right, they've allowed their brand to absorb, whether the brand has the capacity to absorb all of this and come back or whether they've left it a little late – done too little too late.
Look at what has happened! Paul Bulcke, who is their global CEO, came out and met the press only on June 4, when the crisis has started almost 2 weeks before that. In fact, Nestlé's India Twitter handle had a single post on May 21. They only engaged on June 3 on their twitter handle. If you look at the way they handled it, it seems almost as if they had hoped that the crisis would go away and they could wait it out and not really have to go in and take charge. Time will tell whether that has been a good strategy or not.
David Lammy, a member of the British Parliament, who was responsible for the rioting in London that shook Britain for 4 days, says he learned 4 things during that time as he led. He says:
1. The ability to listen to what's going on, trusting your instinct, knowing what is happening around you, being able to have conversations with people.
2. Communication, staying calm. He says, "We needed to prioritize, to clear, to bring media together, to give one message that was coming out.
3. Support vulnerable people affected by the crisis. There are always people affected by crisis and it's far greater than what's going on in the company. There are people who have put their trust in a product – they need to be supported.
4. Prioritizing the wheat from the chaff. Support from a trusted team was key at that point, to really know what you had to, and didn't have to, do at that time.
Time has shown us that companies in the past have handled crisis very well. We look back to the pesticide controversy in India in 2003, where Pepsi and Coke were on the firing line. It was great to see both the CEOs coming out together, going on the road, telling their story – something that had rarely been seen before. They had never been seen together before. But both of them decided to go out. Tylenol handled their crisis so well. Immediately they pulled their stock from the shelves. They didn't wait for anything. Air Asia, when they lost their plane, Tony Fernandez their CEO, came straight out and apologized to all the relatives of people who lost their lives. Rudi Giuliani, in the 9/11 crisis when the twin towers came down, was so visible. He was everywhere, with the rubble, talking to people, letting people know that there was a person in charge.
"You have to be visible," says Patrick Ropella, when he points out that there are 4 Cs that are important in visibility. You have to be visible to
· Colleagues who are with you in this crisis time
· Customers
· Constituents, vendors, stakeholders, suppliers
· Communities, the cities that you are serving, local/national media, etc.
All good points for us on how to handle a crisis. I don't think we can point any fingers at Maggi right now, or Nestlé, and say, "They should have done it like this, or they shouldn't have done that." I'm sure they have their crisis team in place and they are handling it the way that they think they ought to handle it. But, as it unfolds, it also gives us an opportunity to look at our own areas of work and say: If there's a crisis, are we ready? Do we have things in place to help us to do that? Do we think about it and say – If something develops, these are the 1-2-3-4-5 things that we ought to have in place. I think it's always better to be prepared than unprepared. It's always better, when a crisis comes, to be out there and to take charge and to handle it.
I thought that as we've been looking at what is unfolding in Nestlé, it would be good for us to look inwards at the areas we are in and the realms that we have control over and ask the question: If, God forbid, there should be a crisis that develops, do we have in place the mechanisms to be able to handle it well? There's always time to be decisive, and if we don't take that time, then after that, it's always playing 'catch up'. Catch up is always so difficult. I'm going to leave you with that and just pray that God's almighty wisdom would be available for you. As you let this thought play through your mind, look at scenarios and ask yourselves the question: Would I be prepared for a crisis if it developed around me? Whether it is at work, at home, among colleagues or friends or relatives, would I be prepared for a crisis? My prayer is that as you do that, that you would allow God to come and speak into your life and let Him know that you will lean on Him during a time of crisis, the One who is 'wisdom personified'.
Let me pray with you. Almighty God, we may not be in a place of crisis right now. But if we ever get to one, Master, help us to deal with it wisely, effectively, quickly, urgently, all under Your guiding hand. You know the big picture. You are the author of all wisdom. So we will lean on You for that understanding. In Jesus' name we pray. Amen.
• Julius Maggi, http://en.wikipedia.org/wiki/Maggi
• David Lammy, "Leading Through a Crisis," https://hbr.org/2012/08/leading-through-a-crisis/
• Bill George, "Leadership in a Crisis--How to be a Leader." http://guides.wsj.com/management/developing-a-leadership-style/how-to-lead-in-a-crisis/
• Doug Yakola, "Ten Tips for Leading Companies out of Crisis." http://www.mckinsey.com/insights/corporate_finance/ten_tips_for_leading_companies_out_of_crisis
• Patrick Ropella, "The Top Ten Mistakes Leaders Make and How To Avoid Them." http://www.ropella.com/index.php/toolbox/articles/crisis_leadership_the_top_ten_mistakes_leaders_make_and_how_to_avoid_them
• "As Maggi stewed, Nestle PR was slow to Tackle Fire." http://timesofindia.indiatimes.com/india/As-Maggi-stewed-Nestle-PR-was-slow-to-tackle-fire/articleshow/47561579.cms
• Paul Bulcke, Nestle's Global CEO
• Tony Fernandez, Air Asia's CEO
• Rudolph Giuliani, NY Mayor at time of 9/11 crisis.
• Max Depree, "The first responsibility of a Leader..." http://www.brainyquote.com/quotes/quotes/m/maxdepree100557.html
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