Gain Competitive Advantage through Risk Management: NCBA’s Story

Kendal Frazier, Senior VP at National Cattleman’s Beef Association (NCBA) spoke at our Denver Association of Strategic Planning meeting on the subject of crisis and risk management. To appreciate NCBA’s risk management program, it’s helpful to understand this industry. They are HUGE, a $70 billion industry. Cattle are raised in every state, and occupy more land than any other industry in the US. There are over 800,000 in beef cattle; and 200,000 in dairy cattle. The two key goals of NCBA are to protect the safety of US cattle and thus protect the health of beef consumers and maintain consumer confidence in the product. There are strict rules to reduce the risk of disease entering the US cattle market from imports. There is a big push for risk communication: that is how NCBA will react to bad news such as Mad Cow disease!

While the more sensational story was around NCBA’s involvement in the Oprah Winfrey show in 1996, I more appreciated how NCBA implemented its risk management strategy when Mad Cow entered the US on Dec 23, 2003, and believe they reacted in a way that reflects cooperative intelligence principles.

On that same day, NCBA reached out to a pre-selected list of government contacts. They activated a dark website which had been developed just in case Mad Cow penetrated the US. At 5:30 pm that night, Ann Veneman, Secretary of the USDA, made the announcement. Then NCBA held a news conference with 140 media contacts. At 7:30 pm, they made announcements to state agencies, beef councils and affiliates, like McDonald’s who sells 3% of US beef. As of Dec 23, 20 – 30 people worked solely on this issue as prescribed by the emergency response process plan. They had a communication response plan all set to go and worked throughout the holiday season.

What lessons did they learn?

Practice, practice, practice–even down to the level of conducting media interviews.

Organize a team of spokespersons at the National and State level.

Organize your internal resources. Make sure that you have all functions around the table when these crises happen. You need everyone’s perspective: legal, marketing, administrative, purchasing, research, government affairs—all functions!

Drive consumers and media to your dark website. It was helpful to have already developed a dark website for Mad Cow disease.

Your enemies will attack: be prepared. NCBA had a list of enemy activist groups as part of their preparedness for this event.

Expect people to overreact and have your response ready (some schools said they would eliminate beef at cafeterias).

Communicate this difficult problem in easy terms to the consumer.

Make sure that industry amplifies what the government is saying.

Keep major partners in the communication loop.

The media is not the enemy, but is the battle ground. Choose multiple spokespersons for your message.

Evaluate how well your spokesmen come across in the media. Pull weak players and use the more effective spokespersons.

Give the ground team more support (the Washington State team where Mad Cow entered the US).

Being ready when a crisis hits is a huge competitive advantage! Scenario planning is a great exercise to flesh out which crises you should be prepared for. If you wait until the crisis hits, it’s too late, especially in today’s real-time world!

Research on Main Street: Find the Right Local Information to Make Strategic Decisions

Research on Main Street written by Marcy Phelps, CEO of Phelps Research, focuses on using free Internet, social media and low cost databases to access a broad spectrum of local data to support key strategic decisions. Specifically it provides an extensive directory of US city, county and state government resources; local news resources; local demographics and economic sources; and local company data and community issues. In addition to Internet sources, the book discusses how to connect with local people, such as reporters and authors, professors, chambers of commerce, economic developers, local company managers and other local industry and government experts.

This book has broad appeal as so much decision-making either is local or regional or contains a local component. How good a decision-maker feels when you have incorporated his specific local business information using his industry’s jargon backed up by local insight and demographics to support your research findings. Even a salesperson can use the information in this book to bring a local aspect to his sales presentation with better knowledge of his client’s decision-maker, which will set him apart from his competition.

What sets this book apart is the strategic approach that the Marcy develops to ensure success for information gathering:

* Think: who cares about the issue you’re researching?
* Invest in the upfront time to identify your research goals and approach, and identify the required timeframe to locate the data and do the analysis.
* Access the appropriate website resources provided in this book and drill down for the specifics to support your research goals.
* Pick sources to help you learn all sides of the issue which will keep you from being blindsided.
* Uncover experts to telephone who will verify your Internet research findings, and gain the additional insight from a live conversation.

Marcy provides the added perspective of a seasoned researcher with these tippers:

* Separate facts from opinions and know which one to use in order to support your marketing and business requests.
* Question your findings with a healthy skepticism and cross-check and verify your data.
* Benchmark your local findings with larger picture regional and/or national statistics and other research.
* Consider the age and accuracy of your sources such as demographics and articles.

Follow the advice in this book to boost your knowledge about local and regional events that may trigger change, such as a major layoff, a change in leadership, deregulation, new regulation or a technical breakthrough. Collect business information and particularly local personalities to warm up cold calls before connecting.

The sources to numerous local and state government websites, demographics and regional figures help companies make practical decisions such as:

* Which city is the best location for your company’s headquarters?
* Which neighborhood is the best location for that new restaurant and how big should it be?
* Does the community have the right demographics to sell your company’s products?
* Does the local market contain the right talent to support your company’s hiring needs?
* If you relocate employees to your new headquarters, how does the school system measure up?

Find data in often overlooked sources, such as local, regional and federal government agencies that regulate your industry or the “approved vendor list” from a state’s official website, which often includes a description of company’s business or lines of business.

If you miss an online resource or reference as you read a chapter, do not despair. Appendix A provides a chronological list and description of each reference source, including the chapter location to read more about it.

The blend of case studies and expert interviews breathe life into the dry business of information gathering and analysis to support specific local strategic business initiatives. There are numerous case study examples sprinkled throughout the book which identify the combination of resources you might tap into in order to find the information to support your local business or marketing initiative. The interviews with research experts lend a practical element as to why and how you conduct business research. Appendix B contains a set of specific business or marketing issues and lists the resources where you can find more information.

This book stands alone as the only research source I know of which focuses on how to find and use local and regional sources in the US. In short, Research on Main Street is a must read for anyone seeking the right local information to make strategic decisions.

Real-Time Competitive Advantage

I am enjoying David Meerman Scott’s book, Real-Time Marketing & PR. He explains the competitive advantage to companies and individuals of being responsive to events that affect them in real-time: that means right NOW, not tomorrow. No longer can you just monitor the news: you have to take action! In this book he tells the story of how United Airlines broke Dave Carroll’s Taylor guitar. Dave Carroll, a songwriter gets back at United with a song about how United breaks guitars which becomes a YouTube hit. The saga continues as Taylor Guitar and Calton Cases (yes you guessed it, they created Dave Carroll guitar cases) capitalized on this event, by responding quickly and decisively. A most amusing story, if you’re not United who came out smelling like a skunk. David tells the story here.

I hadn’t really thought about real-time response as a competitive intelligence professional. Often we’re so busy monitoring, studying and analyzing competitors, market trends and our customers that we ignore what action we should be taking right now to be more competitive. So many companies are stuck in the past and the future and forget that we operate in the NOW!

How many companies are connected to their customers in real-time? Some listen to what their customers say on Twitter and other social media, which is a step in the right direction especially for companies in the B to C space. But what about companies selling B to B? How do they stay connected to their customers in real-time? At SCIP’s annual conference, Rick Marcet spoke about the win/loss model that he developed at Microsoft which is fed by sales. This is the best example I can think of continuous learning from customers. These assessments are completed at the conclusion of the sale, while the information is fresh, and is viewed as part of the sales process. The company takes action on an ongoing basis based on these results. You can read more about this in Rick’s soon to be published book, Win/Loss Reviews: A New Model for Competitive Intelligence.

Carrying this a step further: how many companies have real-time communication with their employees? While many companies claim that their employees are their biggest asset: how many companies really listen to them on a regular basis? Southwest Airlines comes to mind immediately as they solicit suggestions from employees, implement the winning suggestions and reward employees appropriately. This is America’s second largest airline, and has been profitable in an industry which has slim margins and where most competitors have had a bout with bankruptcy.

Almost every company monitors its competitors and the marketplace it perceives that it competes in. However, too many companies just monitor these activities using Google and other forms of electronic connection and social networks. I think this is just a first step and that winning companies take action based on what they learn, and they don’t need to get the board’s approval. Companies that are excellent also have a human source network that they are connected to in real-time who they can count on to be responsive as business needs dictate.

As our world becomes smaller and more easily connected through the Internet and social media, this real-time connection and communication is becoming a way of doing business. Don’t be left out by disallowing your employees to participate in real-time. You will never have enough information to be certain that you are correct, but if you wait until you’re sure of what you “should say” or “should do,” you will be too late.

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