By February 4, 2009 12 Comments Read More →

Idiot Corporation of America?

Ga. peanut plant has history of problems – Food safety – nbc.com

NY Times article

There was a lot of focus in the news yesterday about this peanut contamination being an “FDA problem”, with President Obama pointing at a lack of proper inspection and oversight.

I’d tend to view this as a business ethics problem. Companies, manufacturers, and managers need ethics and a sense of purpose to society. The government can’t inspect every business (or hospital) 100% of the time. Business can’t just be about maximizing short-term profits (Principle 1 of the Toyota Way reads: “Base your management decisions on a long-term philosophy, even at the expense of short-term financial goals.”

Short-term thinking is at the root of many of our problems in business and government.

So what happened with the “Peanut Corporation of America”? I know I shouldn’t call people “idiots” (or a company)… the whole “respect for people” thing, but I’m going to anyway. What’s wrong with the idiots who run this peanut company?

Officials said the Peanut Corp. of America plant had shipped products that the company’s own initial tests found to be positive for salmonella. They retested and got a negative reading.

So you have a product that you KNOW is contaminated and you ship it anyway? Hello, jail time anybody?

The company kept testing until they got the result they wanted — negative:

“The inspection revealed that the firm’s internal testing program identified salmonella,” said Michael Rogers, director of FDA’s division of field investigations. “In some cases … a subsequent lab was used that reached a negative conclusion.” Peanut Corp. then shipped the products.

So did they find an incompetent lab or did they pay them off to get the negative test?

“Inspections are worthless if companies can test and retest until they receive the results they want,” said Rep. Bart Stupak, D-Mich, who heads a congressional panel conducting its own inquiry. He’s introduced legislation to end such “lab shopping” and to require companies to submit all test results to the FDA. Officials said Peanut Corp. did not initially disclose the test results that found salmonella.

Rep. Stupak wants new legislation. Maybe this is already against the law, according to the NY Times article:

It is illegal for a company to continue testing a product until it gets a clean test, said Michael Taylor, a food safety expert at George Washington University.

So why would managers make a decision like this? Was their bonus on the line? Were they under the pressure of financial or “pay for performance” incentives to the point where they couldn’t bear to make the right decision (not shipping)? Maybe their family’s house was on the line if they didn’t make the numbers and they lost their job? That’s reckless speculation on my part… but I could see that scenario being part of what happened. I wonder if we’ll find out what happened behind the scenes?

Without naming names, I’ve worked at a couple of manufacturing companies where quantity was the priority over quality. Ship it! Move the boxes! Make the numbers! At least people (children, even!) weren’t going to get potentially poisoned and die from the wrong decision in those cases.

The NY Times story outlines many examples of known problems being ignored and proper standardized work not being followed. This is a management problem, not a government problem.

The Georgia food plant that federal investigators say knowingly shipped contaminated peanut butter also had mold growing on its ceiling and walls, and it has foot-long gaps in its roof, according to results of a federal inspection.

and…

The firm took no steps to clean its plant after the test results alerted the company to the contamination, he said, and the inspection team found problems with the plant’s routine cleaning procedures as well.

and…

Previous inspections of the plant by the Georgia State Agriculture Department found dirty surfaces, grease residue and dirt buildup throughout the plant. They also found rust residue that could flake into food, gaps in warehouse doors large enough for rodents to enter, and numerous other problems.

And it wasn’t just this one isolated factory, where they could blame one lowly manager. They also had similar problems with a plant in Texas. No salmonella there, so no problem? Um, the “results” were good, but the process was terrible — a dirty filthy plant with roaches everywhere.

This planetfeedback.com page that I stumbled across searching for perspectives from managers lists contact info for the owner and president of the company? I wonder if I can get a podcast interview with him, ha ha.

It’s just sad. I’m about out of outrage anymore. What’s the root cause? Our culture? Our society? Not looking good… but thank goodness for Captain “Sully” and his crew, at least. I’m long overdue in blogging about that bright shiny story. Did you know his local library is going to forgive the fines and late fees resulting from him losing a library book in the Hudson River?? What was he reading? A book on business ethics. Amazing. Nice ethics by the library, by the way!!

 


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Mark Graban's passion is creating a better, safer, more cost effective healthcare system for patients and better workplaces for all. Mark is a consultant, author, and speaker in the "Lean healthcare" methodology. He is author of the Shingo Award-winning books Lean Hospitals and Healthcare Kaizen, as well as The Executive Guide to Healthcare Kaizen. His most recent project is an eBook titled Practicing Lean that benefits the Louise H. Batz Patient Safety Foundation, where Mark is a board member. Mark is also the VP of Improvement & Innovation Services for the technology company KaiNexus.

12 Comments on "Idiot Corporation of America?"

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  1. Michael Lombard says:

    First, let me echo Mark’s appreciation of Captain Sully. I love that guy not just because he’s a genuine hero, but because he’s competent! Why am I so emotionally impacted by a random display of competence? I think it’s because I’m so used to hearing stories of incompetence like this one about the Georgia peanut plant (although incompetence is too nice a word).

    This company seems like a real backwoods operation, but I’ll refrain from making jokes about how “Deliverance” was based in Georgia. Rather, I’ll just say that I don’t think you can blame this company’s behavior on pure idiocy. Don’t get me wrong, I have no “respect for people” qualms with this. In fact, didn’t I read stories about Toyota consultants calling American managers “concrete-heads” or something? I think “respect for people” is more about expecting humans to be able to improve their processes than treating them cordially.

    Getting back to my point, I don’t think it can all be blamed on idiocy. I’ve worked in similar situations with similar people. There’s always a smart, well-intentioned guy at the top who is setting targets and pay incentives, and who is regrettably disconnected from the gemba. If short-term thinking is the root cause, then “genchi genbutsu” is the corrective action.

  2. Mark Graban says:

    Mike — I agree, I think it’s more a lack of ethics and misguided incentives than pure idiocy. Lots of smart people make bad decisions.

    Maybe using “Idiot” in the headline was just a way of grabbing attention…

  3. Andrew says:

    Mark,

    It’s hard to argue with the “idiots” label.

    I also agree with the identification of ethics – not process and policy – as the root problem here. Toyota says it, I think Senge devotes a chapter to it in The Fifth Discipline; business is bigger than short-term profits.

    It’s a matter of optimizing vs. maximizing. Though “maximizing (profits/returns/etc)” is sadly scribed across many global corporations’ annual reports, it is not necessarily sustainable or ethical practice. Making decisions to optimize opportunities takes discipline and perhaps a conscience, but bodes well for sustainable growth.

  4. Michael Lombard says:

    @Andrew, I really like the mental framework of “optimizing vs. maximizing.” I’m guessing that a maximization mindset typically leads to short-term numbers games, while an optimization mindset generally leads to more mature, long-term thinking?

    @Mark, for the record, great title for this blog post! When I saw the title, I thought it was gonna be a post about that “bad bank” that Obama’s creating to house all the toxic debt. LOL.

  5. Andrew Bishop says:

    Here’s someone else’s take on leadership lessons from Captain Sully that I thought were pretty good: http://www.pbsconsulting.com/Quest_Newsletter/January2009.htm

    Most ethical systems, leadership systems, etc. seem to converge, so it’s no wonder that the headings in this piece on Sully look pretty familiar to us in the lean community – training, responsiveness, responsibility, and humility.

    Re. Peanuts… I’m in a business where testing for disease organisms plays a role, and it is abundantly clear that subsequent negative tests on a production lot don’t overrule prior positives! This kind of behavior is one associated with a culture of denial. This versus our recurring theme of problem identification and responsibility in TPS or lean.

    What’s the opposite of the Shingo Prize for these guys? It sounds as though they are adherents to the “Minus 5S” system.

    -ALB

  6. Andy Wagner says:

    I do believe that my company has a strong culture of not shipping defective hardware, but at level removed from an act that morally repugnant, our lean thinking ends where short-term metrics begin.
    We’d rather rework parts than stop a job and solve the root cause of a problem. We’d rather hand out early retirements than learn all we can from our most experienced people.
    I understand the need to meet the customer’s schedule requirements. Unfortunately, that’s often used as an excuse for short-sighted thinking on cost and quality.

  7. Mark Graban says:

    The Peanut Corporation of America CEO is refusing to testify before Congress.

    According to this article, he personally said it was OK to ship the bad product and he was afraid of lost profits.

    Um, he didn’t think two moves ahead did he? How much profit are they going to lose now? How could you put peoples’ lives before profit??

  8. Anonymous says:

    BANKRUPT!!!

    http://apnews.myway.com/article/20090213/D96AVEK00.html

    I feel bad for all of the employees with the horrible leadership exhibited by Mr. Parnell and the plant managers. Idiots, indeed.

  9. Mark Graban says:

    Someone posted this link from my MBT Blog:

    http://digitalhiss.wordpress.com/2009/02/06/fda-ga-plant-knowingly-shipped-tainted-products-yahoo-news/

    LINK

    It includes some empty “quality is our top priority” language from the Peanut Company website (thanks to google’s archive of what they tried to delete).

  10. Mark Graban
    Twitter:
    says:

    2013 update: Indictments have been handled out by the DOJ.

    A 76-count indictment was unsealed yesterday charging four former officials of the Peanut Corporation of America (PCA) and a related company with numerous charges relating to salmonella-tainted peanuts and peanut products, the Justice Department announced today. Stewart Parnell, 58, of Lynchburg, Va.; Michael Parnell, 54, of Midlothian, Va.; and Samuel Lightsey, 48, of Blakely, Ga., have been charged with mail and wire fraud, the introduction of adulterated and misbranded food into interstate commerce with the intent to defraud or mislead, and conspiracy. Stewart Parnell, Lightsey and Mary Wilkerson, 39, of Edison, Ga., were also charged with obstruction of justice.

    Stewart Parnell was an owner and president of PCA; Michael Parnell, who worked at P.P. Sales, was a food broker who worked on behalf of PCA; Lightsey was the operations manager at the Blakely plant from on or about July 2008 through February 2009; and Wilkerson held various positions at the Blakely plant – receptionist, office manager and quality assurance manager – from on or about April 2002 through February 2009. As charged in the information, Kilgore served as operations manager of the PCA plant in Blakely from on or about June 2002 through May 2008.

    Mark Graban recently posted..My Two Upcoming Webinars – on Waste and Kaizen in HealthcareMy Profile

  11. Mark Graban
    Twitter:
    says:

    This is a very old post, but here is an update from the news:

    “A man who knowingly sold tainted peanut butter that killed 9 people could be sentenced to life in prison”

    Read more: http://www.businessinsider.com/man-could-get-life-sentence-for-selling-contaminated-food-2015-7#ixzz3hP7xCATi

    That’s the punishment federal officials have recommended for Stewart Parnell, the former CEO of the Peanut Corporation of America, who knowingly sold truckloads of the condiment from his Georgia plant even though he allegedly knew they were contaminated with Salmonella.

    Mark Graban recently posted..Key Points About Kaizen from Japanese Hospitals, Going Back in SeptemberMy Profile

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