Remember when the expression was “Consumers vote with their feet”? The meaning was obvious. A company often doesn’t know that it has a problem with consumer satisfaction and confidence until sales have started to drop, and then it’s often very hard to recover from that loss of good will.
Well, now that we live in the age of instant tweeting and blogging, it seems companies can be brought down by rumours spread over social media, online petitions by people who don’t even buy their products, or by a particularly nasty blogger. The mainline media, more concerned about repeating accusations and rumours, than in determining if they prove unfounded, jump into the fray and report tweets and online flamings as news. It’s getting ridiculous.
The real issue for business though is that competition and threats don’t just come from the traditional sources anymore. It used to be competitors, government, and unions were the big bad enemies. Well, now any environmentalist or concerned parent can start a online thread somewhere and the effects can be devastating for a company, even if there is no evidence the company did anything wrong. All that has to happen is an accusation that ‘maybe’ something is wrong…or it’s products are icky.
This is what has happened to BPI, an American meat packing company, as reported in the April 16th issue of Bloomberg Business Week. The company’s founder Eldon Roth about 30 years ago figured out a way to separate what remained of meat on pieces of beef carcass that had been butchered. The process Roth perfected basically uses centrifuges to separate the meat from the fat, which is then freezed and turned into a kind of ‘pink slime,’ as it is known by detractors, so it can then be added into other ground beef products to raise the meat content. Major clients of BPI have included McDonald’s, Taco Bell, and Walmart. To make his product as safe as possible, Roth treated it with an ammonia compound to kill bacteria. This was all approved by the US Department of Agriculture.
Now, BPI is on the verge of shutting down. Why? Because a lone blogger in Texas was concerned about the safety of BPI’s product. Apparently, it wasn’t so much the nature of the product itself, although it IS icky (that’s a technical term by the way). It’s supposedly the fact that it is treated by the ammonia compound, even though that particular process is approved by the USDA, is common in the meat packing industry, and is naturally occurring in beef anyway. BPI’s product isn’t contaminated or carcinogenic. It just happens to be, again, icky, and chemicals are used in its processing.
We could say ‘so what.’ So some company has come under attack for the nature of its product, and it will probably be forced out of business by the rumours that have been spreading on the web. The issue here is that companies can come under attack from quarters they hadn’t even thought of. We’re not talking about other companies, or politicians, or lawyers, or even customers abandoning the company because they no longer like the product. We’re talking about someone in the comfort of their home starting a string of rumours or tenuous accusations that then go viral on the internet and in the band of imitators in the news media.
I write about this phenomenon in my forthcoming book, Brilliant Manoeuvres: How to Use Military Wisdom to Win Business Battles. Specifically, I write about this in the chapter on applying the logic of military intelligence to business intelligence. We never know who our real enemies can be, and where threats will come from. The solution is to assume that these threats exist and to take them seriously when they do occur, even if they are small. Even better, though, is to become proactive by going on the offensive. If you are sitting in your boardroom wondering what would happen if a blogger or an irate consumer found out something about your production process that could be interpreted in a less than stellar manner, even though you know that you are in the right, then there’s probably a good chance that that will occur at some point.
© 2012 Richard Martin. Reproduction and quotes permitted with full and proper attribution.
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