April 2013 |


It?’s not my fault. It wasn?t me. Sound familiar? These are common excuses we?ve used since childhood. And while they may pass in many circumstances of private life, they don?t often fly in the corporate world. Pointing the finger usually doesn?t protect shareholder value nor avert corporate reputational damage.

IKEA, one of the most prominent international brands, has learned this the hard way.  First came revelations that traces of horse meat had been found in the company?s world famous Swedish meatballs. And then just as that crisis was dissipating, news emerged last week that traces of pork had been discovered in its Moose Lasagne.

The fact that most might prefer pork to moose meat is beside the point. Something that wasn?t supposed to be there was, and the ramifications are significant.

Just in case you thought IKEA CEO Mikael Ohlsson was himself slaving over a stove, preparing the popular meatballs and lasagnes, let me disavow you of this notion. IKEA is just one of the multitude of global companies that has a large, diversified and global chain of vendors and suppliers. The meatballs, the lasagne, the pressboard dresser-drawer units all come from somewhere else.

Yet, at the end of the day, when something goes awry, it?s the consumer facing brand that gets the blame and feels the brunt of the impact from investors and on its reputation – as well it should.  What?s that line about the buck stopping?

Perhaps CEOs should study up on Truman (who coined the term ‘the buck stops here’), because we believe incidents such as those that have befallen IKEA will only become more commonplace as supply chains grow more complex.  With complexity comes increased difficulty monitoring managing and ultimately, mitigating risk. It?s why we also believe there is a need to establish a dedicated operation within these organizations responsible for having complete visibility into the chain and vendors? quality control practices.

Today, it?s horse meat and misplaced pork. Who knows what it will be next time?