Opinion: Finger pointing and scapegoats are not what Fonterra needs: A bigger sense of national responsibility is what is required

Opinion: Finger pointing and scapegoats are not what Fonterra needs: A bigger sense of national responsibility is what is required

The expression: "He who smiles in a crisis has found someone to blame," would have to be one of my favourites.

It says everything that needs to be said about human nature. Through life there remains something of the school boy or girl in us. "Who threw that?" "It was him!!!"

By blaming other people there is comfort for us. We are not in trouble. They are.

Journalism is an industry that in my experience is riddled with a culture of blame. A mistake can result in an enthusiastic witch hunt that ends up with the party found to be guilty being subjected to very public (within the organisation anyway) ostracism.

And yet, of the virtually countless times I can recall such a process going on within organisations I have worked for, I struggle to remember any instances where the mistake led beyond the blame game and into actually improved processes; into lessons being learned and people doing their jobs more effectively.

Perhaps journalism's blame culture is the reason why Fonterra's current problems are being seen certainly among some news organisations as leading, through necessity to bloodletting among the dairy giants staff. One newspaper had a poll to find out whether Fonterra's CEO Theo Spierings should be sacked. When he fronted NZ news media for the first time on his return from China he was asked whether he was going to fall on his sword (although not in those words). His answer was that this would be up to the board.

Also, watching the main political party leaders speaking on the issue in Parliament this week, it seems clear there is a mood afoot among them for large scale inquiries as well as, hopefully (from their perspective), some floggings. After all there may be political points to score.

Now, if gross incompetence is found to be behind this latest public safety scare at Fonterra then there can be no argument a person or persons as yet unknown being fired might be the right course of action.

But personally I would hate it if scapegoats are made simply to satisfy the public bloodlust, and with the thought that once the sacrifices have been made everyone will shut up about the safety issue and carry on as before.

Inevitably such matters are subjective, but I thought there were two main problems with Fonterra revealed by this issue. 

In the early stages I certainly thought I perceived a whiff of arrogance and secondly, and more significantly, I felt there was a disconnect between Fonterra's world view and that of its customers.

Fonterra is a strange beast. It had a very privileged creation with the bringing together of the separate dairy companies into one very big one being allowed to take place without having to go before the anti-trust authority the Commerce Commission. If it had not been given that privilege could it have been created at all?

The relationship between Fonterra and its farmer shareholders seems, from the outside, to have always been uneasy. The Fonterra head office folk have chosen to be city slickers in Auckland, well away from the rural roots. Indeed the Princes Street offices near the university don't seem to have ever been good enough and the company is going to relocate to far more des rigueur premises closer to the waterfront.

This seems an odd mix to me. A grass roots-based (literally) operation with the apparent pretensions of being like a high flying investment bank.

I don't think Fonterra should be like this. 

What Fonterra is, or should be, is the custodian of New Zealand's dairy industry. It is massively important to all New Zealanders.

But does it see itself like that? It reluctantly answers to its farmer shareholders, but has it considered itself answerable to all Kiwis?

If Fonterra learns anything from this latest issue, then I hope it is a sense of humility, a recognition that we New Zealanders have entrusted it with a big part of New Zealand's economy and it needs to recognise that we have expectations of it. 

Likewise, when it comes to its customers, Fonterra needs to 100% appreciate that the customer is always right. Again I don't think that message has always been clear within Fonterra. Yes, the company is in a position to know that the latest scare has been in every sense overblown by the public. But the point is, and this seems to have been lost on Fonterra - parents don't want to know that food they give their babies is 99.999% safe, they want to know it is 101% safe.

Yes, that's probably grossly unrealistic on the part of the public. But that's the way it is.

So, forget the firings and the witch hunt. What Fonterra needs is a root and branch overhaul of who and what it is culturally.

If the current scare results in a Fonterra that displays greater humility and a huge sense that it represents New Zealand and its economy in the wider world, then it will have been worthwhile. 

 

 

 

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16 Comments

While I agree with much of this article, there are parts of it i take issue with. As a Quality specialist i find myself asking why Fonterra is shipping product before it is cleared in it's testing processes? It seems to me that there is a serous case of complacency here that probably runs through the organisation, but begins at the top. This translates to incompetence. Quality must be provable and demonstrable. Currently Fonterra has proven that their systems are unreliable and flawed. Those responsible need to explain why they have allowed this to occur.

The Chinese do not buy Fonterra Milk Powder they buy New Zealand MIlk Powder. Fonterra are trading off the reutation of New Zealand built up over a large number of years.
The Chinese have put in front of us exactly what we are doing wrong as a country.
Is the best option  to insult them rather than actually take it on board?
Trouble is they are right, and they put it so well. John Key simply had to bat it away and say they were wrong.
Yet,
Yes the leaky homes and the Botulism are connected. 
Self Regulation is no regulation at all
Regulation without actual real government people to do the checking is no regulation at all.
I would urge everyone to read the article and have a think. Maybe even wonder where is MAF where are the inspectors, where are the plant managers
http://www.chinadaily.com.cn/xinhua/2013-08-05/content_9769307.html
All of this harm as detailed by the Chinese is being done in our name, It is time we told our government and our unelected elites to stop using the good name of New Zealand in such a way. 
This should be a wake up call
Finance companies
Leaky Homes
Fonterra
Polluted rivers
are symptoms of something deeply rotten in New Zealand
 
 
 

I would urge everyone to read the article and have a think. Maybe even wonder where is MAF where are the inspectors, where are the plant managers
 
I would suggest they have been politicised if not financialised. They undetake to pay tribute to their political masters- a truely independent thinking and acting civil service beyond corruption is a legacy doctrine no longer practised.
 
Glaring examples of gangster type actions bringing us beyond the stone age can be witnessed here.
 
Emails released in the High Court at Auckland today show Justice Minister Judith Collins' staff were seeking to stop a judge appointed to independently review David Bain's compensation case from "going completely feral".
 
An email sent from Ms Collins' press secretary Rachael Bowie to Ms Collins, her senior private secretary Megan Wallace and Ms Collins' senior adviser Margaret Malcolm said Justice Ian Binnie needed to be kept "in the tent for as long as possible" to avoid his "very damaging" report from being released.

"I would suggest they have been politicised if not financialised. They undetake to pay tribute to their political masters- a truely independent thinking and acting civil service beyond corruption is a legacy doctrine no longer practised." -- Could not agree more.

Personally I think it's indicated while there are benefits to having Fonterra, it’s highlighted how much the eggs are all in one basket.
I think there’s no doubt they have become arrogant, I remember their first comments when this first came out (which strangely although widely reported at the time, has barely been mentioned at all in the last week or so).
They were refusing to give any details on which customers were affected, I was amazed they would make a comment like that, and I think that it did not go down well, they may have learned a lesson from it.
They have apparently done a 180 turn on that and are now falling over themselves to appear concerned about it.
It makes you wonder if Fonterra should have been made two separate companies rather than one, at least there something to fall back on, should one have scares of this nature.
Whenever the main focus of anything is getting the share price up and costs down, corners will be cut and this kind of thing will always continue.
It’s all very well saying don’t play the blame game, but like you mentioned this company has been given a very privileged position in NZ, and increased scrutiny should definitely come with that.
Besides the fact that the top management are happy to take credit when things go well, and very fat salaries.
They have to take responsibility for failures as well.

Shouldn't merge the two large dairying companies into a single super large company back in 2002.  Let's be the lesson for the proposed meat board.

... why should Fonterra be the custodian of the NZ dairy industry , David ?
 
Helen Clark loved monopolies , and she ran roughshod over the commerce commission's recommendation that the dairy industry be allowed to have competition , several big players ..
 
... and the result we see , is 3 major screw-ups by the company in just the last 5 years ..... tarnishing the country's reputation for safe and high quality produce ....
 
Fonterrorism !

Helen Clark loved monopolies , and she ran roughshod over the commerce commission's recommendation that the dairy industry be allowed to have competition , several big players ..
 
Gummy, I think this is more to do with reserved rewards for crony capitilists than party politics.
 
The Commerce Commission has just been sidelined once again, but this time by National. 
 
Govt 'price-fixing to suit mates' in Chorus:
 
Lines company Chorus would benefit and consumers would lose out from Government proposals made at the start of a review of telecommunications law, says an industry group and the Labour Party.
 
Chorus' share price jumped to its highest point in months yesterday and closed up 4.48 per cent at $3.03 as Communications and Information Technology Minister Amy Adams released a discussion document as part of an examination of the Telecommunications Act.
 
The Government fast-tracked this review after a proposal from the Commerce Commission in December to cut what Chorus charges retailers for access to wholesale copper internet services by $12 a month.

now is not the time for weak wills..
But New Zealand's problems aren't mere "details"  they're starting to look systemic.
One could argue the country is hostage to a blinkered devotion to laissez-faire market ideology. Many New Zealanders fell victim to this when the construction industry was deregulated two decades ago resulting in damp and leaky homes that quickly became uninhabitable.
While it's true the government isn't responsible for the contamination of Fonterra produce, it should be held accountable for the fact that nothing was done to identify the problem before it was dispatched to export markets and domestic customers.
http://www.chinadaily.com.cn/xinhua/2013-08-05/content_9769307.html
 
To get another sense of how strongly the local Chinese embassy is feeling about the scandal, read Claire Trevett's Sri Lanka suspends NZ milk powder imports. She quotes the embassy's Zhang Fan as saying 'Fonterra is your largest company, so a lot of Chinese consumers are consuming their products. This kind of incident, one after another, certainly has shaken their belief in Fonterra. Previously, in a lot of Chinese consumers' minds, New Zealand was a clean, pure place in terms of food safety record. But now, bad things just happen again, again and again'.
http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10909903
 

When Fonterra was formed the reasoning was streamlining of the business to operate more efficiently and responsively. It was prophesised that it would be returning 30 billion in ten years as a result. I suspect it would have been thought that such rationalisation would help avoid such food safety incidents.
However when the government deregulated the dairy board in conjunction with the forces that wanted the formation of Fonterra for whatever reasons, that was the moment liaise faire capitalism usurped the cooperative culture and values of which had driven the dairy industry to this point. Is the industry any better off as a result?  From this farmers point of view no. The conditions that came with bypassing commerce commission scrutiny has undermined the strength and unity of the industry with no obvious value added. Farmer shareholders have abandoned cooperative principles in favour of get rich quick share scheme and corporate philosophy, by defrauding a century of cooperative capital development in favour of a batch and buying the neighbours farm at inflated values. Reference to strength and qualities of Fonterra as a cooperative, are allusions to a bygone error, when remuneration of senior management and governance and subsequent responsibility wasn’t as eye watering as today.

Omno, well done, best post of the week.
 

+1

Thank you.
David Hargreaves articles make a couple of valid points concerning culture, both of which would be nullified within a true cooperative structure, but  aside from journalists blood lust, the point of my comment is an inability, or refusal  to see the wood for the trees.

Heard of a british owned forestry company where if there was a death on the job the country manager had to front up in London in person.  Got a one way ticket to do so.  And just might, only might, get a ticket back after the discussion.  Or might not have a job.
Such a company has my admiration.  It's crystal clear on what it's attitude to safety was.  And clear who had responsibility.  And the policy saved lives I am sure.
It's easy to take the road of peace, love and brown rice.  But we do need accountability.  Crystal clear expectation and penalty does produce a result.  Whats wrong with blame. 

 
 
"Finance companies
Leaky Homes
Fonterra
Polluted rivers
are symptoms of something deeply rotten in New Zealand
You can add the police and the law courts there as well.                                                                                                                                               The system is in bred. The elite and the public service all went to school and uni with each other - all trained by the same system. The David Bain case is typical. Several reviews by the NZ system - all negative in a heartbeat and then it goes to London and they laugh at our stupidity in gaoling an innocent man as far as the facts of law stack up. The same in bred nature is evident everywhere as is the No 8 wire mentality. Until company HSE officers become professional and strong willed the examples of Pike River will continue. It is no use saying we told you so. There has to be the ability to shut down something even if your old school buddy is saying she will be right. And for gods sake get rid of the ex All Blacks fronting things. They are basically brain dead after all the tackles they take.

What puzzles me about this Fonterra fiasco is that product got onto the shelves (huge amounts of it were recalled) so therefore some must have been purchased, which means some must have been consumed. So where are all the reports of babies with botulism? I haven't seen any and the TV news has just about been hijacked by this scandal so I doubt I would have missed such reports, and I can't imagine TV1 and TV3 deliberately ignoring cases of botulism! Why would they? The more lurid and horrid the news the better they like it.

It has left me wondering if our glorious, beloved leader has deliberately steered the media towards the Fonterra scandal to keep public attention away from his Bill that will allow him to spy on me and you at the drop of a hat. He seems uncommonly anxious to pass into law something that spanks of downright despotism.

 
 

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