Tiger Brands cleans out its closets – A Lesson in Reputation Risk Management

How does a 100 year of company destroy its reputation, trust in it as well as its market capitalization?

Simple , really! It allows practices like price fixing and collusion to operate and flourish and become part of the way things are done in the company.

Read more: Business Report – Tiger Brands cleans out its closets

As a keen observer of organizational development (OD) and behavioural practices I am disturbed:

  • Where were the OD experts in all of this? The outside consultants who should advise? Surely there must have been rumours, incidents and talk about these types of behaviour?
  • Where were the Reputation Managers or was PR just another activity based exercise in the company?
  • Where were the Compliance Officers in all of this?
  • Where was the Internal Auditors and Risk Managers?
  • Where were the internal employees who should be questioning unethical practices and conduct?

Surely there must be processes in any organization to determine smoldering risks. Smoldering risks are those risks that can result in unplanned visibility and reputation damage should it go public (Technically, a smoldering crisis is any serious business problem which is not generally known within or without the organisation, which may generate negative news coverage if or when it goes “public” and could result in fines, penalties or unbudgeted expenses). Surely there must be a process in any organization to act on those small insignificant issues that can potentially cause harm when they come into the open.

The Sunday Independent of today reports that Tiger Brands is continuing a company-wide review to root out anti-competitive behaviour, after a R53 million rand fine for collusive tendering was slapped on its medical supplies firm, Adcock Ingram, on Friday. And this, just after another fine because of price fixing in the bread industry.

Peter Matlare, the Chief Executive of Tiger Brands, promised journalists on Friday that ‘’We are intent on rebuilding our reputation through a culture of compliance and strong ethics, engagement with all of its stakeholders and the adoption of world class business practices’’.

Do I have a message for Mr Matlare!

Dear Mr Matlare, How are you going to do this?

Dear Mr Matlare, The means to do this starts with raising awareness and education and training.

The means to do this have existed for years. It just so happens that I have been addressing these issues the past 12 years, facilitating workshops in more than 8 countries. In the 12 years I have regularly sent notifications to companies like Tiger Brands and interestingly enough to Adcock in particular.

In 12 years only one delegate from Marketing attended one of my workshops. In fact I was told a few years ago by a then Adcock PR person to stop bothering them, they have got things under control. Sure, they did.

Oh, the fallacy of assumptions. As if a few people in a PR department can manage the reputation of a company.

There is clearly a misunderstanding by management teams in South Africa. Managing and protecting a company’s reputation is a multi-dimensional and holistic management function. It cannot be managed linearly by any one department.

In the case of Tiger Brands, their behaviour was the pivot to damage, and that behaviour was influenced by the thinking practices in the organization.

The Thinking practices within an organisation is defined as the mental activity of every member of the organisation….all the idea generation, learning & skill development, exchange of information, development of strategic directions, project planning, communication, market research, problem solving, process improvement and quantum leaps that make up the total intellectual activity of the organisation.

(Source: Transformation Thinking by Joyce Wycoff).

How come all of the above experts did not identify or do anything about these practices? Is it because of our tendencies to only identify tangible asset risk?

It surely is time for organizations to take a closer look at the intangible performance drivers in the business and how they interact with the tangible drivers.

What Mr Matlare is speaking about is called Radical transformation. Not transformation in the BEE sense, but real transformation. The thing is that transformation can occur in any organisation when every member of the organisation becomes an important, participating part of the whole….when every member is taught fundamental but powerful thinking skills and the dynamics of how to think together.

What is going to be necessary at Tiger Brands is a radical a change of direction on all levels within an organisation, a change of not only how they work, but how they think, interact, participate and perform.

Reputation makeover is not a short term process, but they can bounce back, provided they have the impetus to do it.

Dear Mr Matlare, here is a formula that you can apply to the Tiger Brands group.

Change == D+V+S+C

For change to happen a business has to:

– Be dissatisfied with its present state

– Have a clear Vision of where it wants to go

– Take the necessary steps to get there

– Create enough energy (or tension) to overpower the COST required (in terms of money, time and energy) to make the change happen

I hope that you all cherish your Reputation enough to make this change happen. Good Luck!