Large organisations, be they private companies or government agencies, suffer from the same problem as Fonterra: people work in silos and are very patch-protective.
They have their own budgets, and one way to curry favour with their bosses is to be under, certainly not over, budget. Managers fear others treading on their patch and taking slices of it and some people do this because they are hungry for power. This is petty, childlike behavior and has no place in a large multi-national company.
The fact that Fonterra managers made a series of silly mistakes then, worse still, argued over a few thousand dollars to sort it out, beggars belief. At no stage, until it was too late, did anyone get the big picture.
This sort of behavior – fixating on the small and ignoring the big-picture stuff – is common in large organisations. It is there to see especially in central and local government.
Fonterra and many other companies will pay a huge price for what is essentially a management failure to instill in all staff the overall aims of the company and how their personal role, however small it might seem, is crucial to success. In Fonterra’s case, a lens off a torch falling into in a spray drier started this dramatic escapade.
As Professor Keith Woodford noted, food companies have to be especially diligent because of the emotion attaching to their product and the public outcry that will inevitably follow any risk to human health.
Fonterra has paid a high price for failing to get the company culture right. Hopefully others watching this debacle playing out in the media are taking note and, like Fonterra, are putting in place protocols that will prevent an incident like this happening again in the New Zealand primary sector.
