Leading through crisis at Maple Leaf Foods

Core beliefs, values guided company through 2008 Listeria outbreak
By Amanda Silliker
|Canadian HR Reporter|Last Updated: 02/11/2013

Leading through crisis: Michael McCain, president and CEO of Maple Leaf Foods in Toronto, spoke at a recent Strategic Capability Network event about how the company handled the Listeria outbreak in 2008. The leadership team relied heavily on the organization’s core beliefs and leadership values to guide their behaviour during the difficult time. For more information visit www.scnetwork.ca.

Refreshing difference found in McCain’s belief (Organizational Effectiveness)

Maple Leaf leadership tactics not for faint of heart (Strategic Capability)

Lessons from 3 leaders on values-based approach (Leadership in Action)

In 2008, Maple Leaf Foods was faced with a deadly Listeria outbreak at one of its plants in Toronto. The outbreak made headlines — more than 20 people died from the infection — as did the company’s response. Along with promptly recalling any of its potentially affected products and shutting down the plant, CEO Michael McCain was highly visible throughout the crisis, held many press conferences and posted an apology letter on the company website.

“It was a very tragic event — 23 people lost their lives on my watch, my accountability,” said McCain, speaking at a Strategic Capability Network event in Toronto in January. “And more than any time in our history, our core values guided our behaviour through that time.”

The company’s leadership values underpin its culture and are based on a set of beliefs that set the stage for the type of organization Maple Leaf wants to be, said McCain.

The first belief is leadership is an attitude — not an organizational level on a chart. It’s something that can be “displayed by every sole in the organization” and is not reflected in the hierarchy but in the day-to-day behaviours that exist at the organization, said McCain.

“We believe that it’s situational in style. It can come and merge in any number of situations that an organization will face and we match our style to the appropriate situation,” he said. “And the goal of leadership and leadership attitude is both taking responsibility for outcomes and to achieve committed followership.”

The second belief is that great leaders demonstrate passion above all else. There are four attributes of passionate people: they care about things that are important to them; they are action-oriented; they’re willing to overcome obstacles; and they are fundamentally optimistic, said McCain.

“Leadership passion is probably the most dominant personal attribute that we look for,” he said. “They care at a deeply visceral level about the things that are important to them… and they care so deeply and are acting so decisively that no matter what the obstacle that comes along, they will overcome that.”

The third core belief is great leaders fundamentally impact other people — that’s their purpose. They have emotional intelligence, they’re great communicators and they motivate the people they work with, said McCain.

“They not only have internal energy — a tremendous internal battery — but that ability to turn on that battery and energize other people, and that they are both respected and show respect.”

And the fourth belief is that leaders are driven by results. Their incisiveness, decisiveness and ability to execute against delivering that result are essential to leadership, said McCain.

This collection of beliefs was used to form Maple Leaf’s six core leadership values:

• Do what’s right.

• Deliver winning results.

• Build collaborative teams.

• Get things done in a fact-based, disciplined way.

• Learn and grow.

• Dare to be transparent, humble and passionate.

“There’s a difference between those that have a great story and a beautiful poster on the wall and those that say, ‘I don’t (care) about the poster on the wall, but how does this come alive every day?’” said McCain. “We’ve tried to take it from a poster on the wall — that is absolutely meaningless — and take it into the daily lives of the people in our organization so they’re walking the talk, living it.”

Maple Leaf considers the values to be behavioural norms that reflect the company’s beliefs and describe how it expects leaders to behave when faced with any situation at the organization — good or bad, he said.

“When sometimes you think these monumental decisions that would require extensive dialogue and extensive discussion, when they become rooted in the core values of the organization, as in this case they were, a decision that you think would be monumental was made in minutes, because what was the right action to take was so evident in the organization,” said McCain, in reference to the 2008 Listeria outbreak.

Throughout the crisis, Maple Leaf drew most heavily on three elements of its core beliefs and leadership values. The first was accountability.

“Accountability is very much built into our culture,” said McCain. “Taking ownership of something is very much part of the underlying values of this organization.”

The second was action-orientation — not just talking about it but acting with a high sense of urgency, he said.

And the third was transparency.

“We have this thing called ‘Daring to be transparent’ and recognizing transparency comes with risk and people that are transparent take great risk, particularly in society today — but that’s essential to our culture,” said McCain.

HR played a prominent and significant role during the crisis by executing all of the people components around it — which it did incredibly well, he said. It facilitated employee retention, supported communication with employees, managed staffing levels, ensured values were consistent with behaviour and acted as a sounding board and trusted advisor for employees and management.

And employee engagement actually increased after the crisis. The engagement level was 82 per cent before the outbreak and 96 per cent six months later, said McCain.

“The lion’s share of that can be traced back to the respect inside the organization that we collectively (had),” he said. “What people in the organization did for their community, for the people affected, various stakeholders, customers, was absolutely heroic. And that became, in every case, connected with our core values, and that became the real solidification of that bond.”

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Refreshing difference found in McCain’s belief (Organizational Effectiveness)

By Barbara Kofman

When it comes to the correlation between enhanced productivity and improved financial results, few senior leaders need convincing.

But what if someone revealed there was one key thing a CEO could do that would, more than anything else, contribute to a better bottom line? In all probability, the CEO would take the time to find out what this step is.

But how would the CEO react if he was told the path to greater profitability lies in the development and execution of a set of durable corporate values, ones that are inculcated into every aspect of the organization, from hiring decisions through to rewards and recognition — and the most unwavering model of these values in action would have to be him?

Many have attempted to put this “value proposition” into action. However, as Michael McCain highlighted, doing this is not simply a matter of developing and posting value statements on a website and telling employees they must use these as the guiding principles in everything they do. It is about planned and consistent execution.

The corporate world is littered with inert value statements, conceivably well-intentioned when developed but ultimately losing momentum. They never achieve their promise to enable the building of a culture where there is a clear understanding and sense of responsibility on the part of all employees regarding what behaviour is expected, and for anyone who fails to act appropriately, the upshot is to go — voluntarily or involuntarily.

While some of the strategies Maple Leaf Foods has put in place to ensure employees understand and remain committed to applying these values must be taken “on faith” (such as leadership training), there is evidence on many levels that a competitive advantage accrues to organizations that build their leadership promise and organizational effectiveness around an immutable set of values championed first and foremost by their CEOs. The significance of a culture centred on values was powerfully illustrated when McCain described how it was these “values in action” that guided the way the Listeria tragedy was managed. One of the outcomes after this crisis was rising employee engagement numbers.

Given the evidence, why do many leaders fail to see the folly in not leveraging and infusing their organizations’ values into every aspect of the business? What holds them back? Is it a lack of vision, a focus on short-term results, self-interest, ego, CEO turnover? Conceivably it is a bit of all of these things. Indeed, Maple Leaf Foods has the advantage of a long-term, stable leader at the top who has had the opportunity to develop, take ownership for, put into action, see the results and then stay the course.

Hearing McCain speak was a refreshing difference from leaders who speak to the importance of values but fail to act in a way that supports this statement nor hold accountable others who don’t walk the talk. It’s also a good reminder of author Jim Collins’ findings that great companies have “a culture of discipline that ejects those who do not share the values of the organization.”

Barbara Kofman is SCNetwork’s lead commentator on organizational effectiveness and founding principal of CareerTrails, a strategic coaching and HR Solutions organization focused on enabling individuals and organizations to resolve their work-related challenges. She has held senior roles in resourcing, strategy and outplacement, and taught at the university and college level. Kofman can be reached at (416) 708-2880 or bkofman@careertrails.com.

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Maple Leaf leadership tactics not for faint of heart (Strategic Capability)

By Karen Gorsline

Values-based leadership is a popular catch phrase in management literature, but most people underrate both its inherent risks and potential benefits. Listening to Michael McCain talk about leadership through crisis and engagement efforts made it clear a values-based leadership style, if actually practised versus proclaimed on a poster, is not for the faint of heart. Some reflections on his comments:

Entrepreneurial values meet publicly traded company: The values at Maple Leaf Foods are strongly influenced by McCain coming from a highly entrepreneurial, private family business.

“Doing what’s right” reflects a sense of community in a more personal and intimate way than a more sterile concept of corporate social responsibility, as articulated by many public companies.

Building the organization, delivering on results and getting things done are classic entrepreneurial values Maple Leaf Foods broadened to include collaborative teams, the discipline of process and an explicit reference to the importance of growing and learning.

This adaptation represents a nod to modern management concepts. As a publicly traded company composed of about 30 acquisitions over a relatively short period of time, Maple Leaf did not have the luxury of subtly shaping the company over time. Values that might have been implicit at a business grown from scratch needed to be explicit and supported by education and programs, and amalgamated into a unified Maple Leaf Foods.

Embracing risk: Most Canadians remember McCain speaking on behalf of Maple Leaf Foods during the Listeria crisis. He apologized for the failing when presenting a vulnerable face to the public and admitting mistakes were not things businesses were known to do. Fewer Canadians are aware of the unease of shareholders with the extended reinvestment plan at Maple Leaf Foods and the impact of the strong Canadian dollar on corporate revenues and returns.

“Dare to be transparent, passionate and humble” takes on new meaning when risk is involved. Few leaders and leadership teams are willing to truly embrace the risk required to respond frankly to a corporate crisis or chart a distinctly new course for the business. To embrace risk in a responsible way requires commitment and confidence in one’s own capabilities, coupled with the ability to garner understanding of the situation and support for the proposed course of action from stakeholders — whether they are family, the public or shareholders.

Organization and culture change doesn’t happen in a day: Leaders acknowledge that organization and culture change takes anywhere from three to 10 years, depending on the scope of change and circumstances.

McCain has led Maple Leaf Foods through significant growth and change. The food contamination crisis and impatience of investors no doubt have slowed progress. Dollar parity continues to put pressure on an outdated supply chain, making the reinvestment both more difficult and even more imperative for Maple Leaf Foods. Even though the company has been on its journey for a while and is immensely proud of its accomplishments and brands, McCain acknowledges it still has quite a way to go to accomplish what it set out to do — reinvent the business supply chain and weave the company into a unified culture.

It is difficult to come away from such a presentation without being struck and excited by an entrepreneurial energy and drive not often evident in the leaders of public companies. The ability to blend common sense business acumen, commitment to values and the sophistication of modern management could represent the development of a significant strategic capability.

Karen Gorsline is SCNetwork’s lead commentator on strategic capability and leads HR Initiatives, a consulting practice focused on facilitation and tailored HR initiatives. Toronto-based, she has taught HR planning, held senior roles in strategy and policy, managed a large decentralized HR function and directed a small business. She can be reached at gorslin@pathcom.com.

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Lessons from 3 leaders on values-based approach (Leadership in Action)

By Trish Maguire

A values-based approach has been declared by many experts as a best practice for leaders to embrace and achieve a more stable, principled and sustainable future for their organizations.

How many of you recall the nickname given to Jack Welch in the early 1980s — “Neutron Jack” — which he earned for his demeaning, ridiculing, non-values-driven approach to people?

I recently had the privilege of hearing two keynote speakers. The first was Dina Dwyer-Owens, CEO of the Dwyer Group, at the Profiles International World Conference in Austin, Texas. The second was Michael McCain, CEO of Maple Leaf Foods, at the recent Strategic Capability Network breakfast. Both attributed a values-based leadership approach to sustaining their organization’s results.

Dwyer-Owens explained how her management team defined its code of values with the express intent of creating a set of universal guidelines to support and drive the vision, mission and culture of empowerment that supports seven service-based franchisees to lead more successful businesses and enjoy more successful lives.

The commitment to the values goes beyond the onboarding procedures — every employee from the bottom to the top and across the entire organization is encouraged to “know and follow by heart, and with their heart” the fundamental values. Every manager is expected to live, breathe, walk and talk every value 100 per cent of the time. Employees are given unequivocal permission to challenge any manager who is not behaving or speaking in accord with the values.

In contrast, McCain described how he developed and launched his values with the express intent of providing employees with a sense of purpose and to support his desired culture of being “professionally entrepreneurial.”

For McCain, his values-based leadership approach is expected to encourage people to get it “right but not perfect” and concentrate on the “big rocks.”

For Dwyer-Owens, the values-based leadership approach is about leading her organization without using the traditional powers of title or autocratic command and control. She credits the continued growth and success of the organization to the fundamental road map the code of values has created for every franchisee and employee to understand and voluntarily adhere to.

Both leaders subscribe to the fact that a values-based leadership approach enables people to see beyond the short term and acquire a better understanding of the long-term consequences of their decisions to the whole organization, not just their own business unit. Equally, both leaders are proud of how their values add meaning, depth and courage to people’s conversations and decisions.

With respect to Welch, by the mid-1980s he irrevocably learned there was a far more constructive, sustainable and humanistic approach by which to energize and engage people and that was by gaining their voluntary buy-in to the organization’s values.

It’s a combined learning moment from these three leaders. If your organization genuinely wants to balance business issues with people, perhaps it’s time to re-examine your values-based leadership approach.

Trish Maguire is a commentator for SCNetwork on leadership in action and founding principal of Synergyx Solutions in Nobleton, Ont., focused on high-potential leadership development coaching. She has held senior leadership roles in HR and organizational development in education, manufacturing and entrepreneurial organizations and can be reached at synergyx@sympatico.ca.

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