The Harvard Business School is always on the lookout for interesting business case studies to help teach its high-powered students about the latest trends in business management.
I’m going to nominate Organic Pastures Dairy Co. for consideration as an HBS case—as an extraordinary example of a company that has forged such a close bond with its customers that they have become a potent political weapon on behalf of the company. Whatever the food safety issues at Organic Pastures, the true nature of the agenda became clear when the California Department of Food and Agriculture rushed to lift the quarantine after OPDC’s owner, Mark McAfee, said, “Enough screwing around,” and had the clout to back up his demand. Without the clout, OPDC would still be waiting, and waiting, and waiting. It’s clearer than ever that politics comes before any considerations of safety in this struggle.
A core teaching principle at HBS is for students, who are tomorrow’s senior company executives and entrepreneurs, to continually come up with new and creative ways of reinforcing among their customers such traits as loyalty, commitment, caring. In today’s globally competitive price-sensitive marketplace, it’s become ever more difficult to encourage even the most basic loyalty, let alone commitment and caring, among customers.
But from the time OPDC was shuttered four weeks ago for being connected epidemiologically to five illnesses from E.coli O157:H7, its customers have been there on Facebook, bemoaning the loss of the opportunity to pay $18 a gallon for raw milk, demanding the government regulators get the hell out of the way of production. News of the five illnesses that led to the shutdown barely rated any mentions of concern from customers. Even the news Friday that the quarantine was lifted had any number wanting their milk…immediately. Said one woman: “Went to Berkeley Bowl yesterday, no raw milk ;-( ..its been weeks now, what are you doing with all that milk, this is a travesty. Are the cows depressed? I am!”
When all was said and done (and there was a lot to say and do), the struggle at Organic Pastures Dairy Co. came down to political power. And it turned out that OPDC had an ace in the hole in its struggle with the CDFA. The company tried to maintain a professional relationship with the regulators. But eventually, the regulators reverted to form by delaying unreasonably, so OPDC played its ace. And the regulators, afraid to confront the coiled raw power inherent in those highly committed consumers, backed off.
Believe me, that is the kind of company relationship with customers that companies large and small would pay the world for. They hire fancy consultants, engage trendy advertising agencies, and do pricey marketing studies to figure out how to make it happen. Inevitably, they determine that it is commitment that can’t be bought. It must be nurtured, developed, earned, over a long period of time. In fact, I can’t readily identify a similar kind of intense relationship that so many paying customers have with a company as OPDC has with its customers. (Facebook users are very loyal, for example, but they don’t pay for the privilege.)
If there has been one lesson we have learned over six years of The Raw Milk Revolution, it is that regulators aren’t going to give an inch…unless forced to do so. Highly committed consumers are the most potent weapon producers have. We saw another example earlier this year in Kentucky, when members of John Moody’s food club refused to abide by a quarantine of their products. Faced with a hornet’s nest of incensed consumers, regulators backed off.
OPDC has been extremely skillful in forging such a tight bond with its customers that, when the dairy was shut down four weeks ago, they were outraged. When OPDC finally warned CDFA that it would loosen this army of upset citizens on the political power structure, the agency capitulated. No, anything but that, CDFA seemed to be saying.
OPDC differs from most other producers of raw milk around the country in terms of its size and the legal rights it has. But there is an important similarity: every raw dairy can educate its customers or shareholders of the risks of political interference with access to their food. Dairies can prepare customers for the possible (no, inevitable) need to become involved in continuing access.
Dairies need to alert their customers to the outrages taking place elsewhere in the country. They need to let them know what customers elsewhere are doing to fight back. Most critical, they need to let their customers know that consuming raw dairy is a right that has to constantly be re-earned and fought for, again, and again…and that they may well be called on to take up positions on the front lines in the battle.
Such education needs to take place in advance of a government crackdown. Facebook is an excellent tool for spreading the word. You can be sure the CDFA regulators (and their FDA bosses in Washington) were monitoring the OPDC Facebook page, and frightened by what they read.
You can also be sure that the FDA watched very closely what happened at OPDC, and didn’t like all the clout OPDC has cultivated via its customers. It will likely conclude it should step up the pace even further over its recent aggressive push against dairies, and pressure its state lackeys to do the same, before other dairies or organizations can emulate OPDC.
The FDA is in a battle against time. It is a battle described today by New York Times columnist Tom Friedman: “ ’The days of leading countries or companies via a one-way conversation are over,’ says Dov Seidman, the C.E.O. of LRN and the author of the book ‘How.’ ‘The old system of “command and control”— using carrots and sticks — to exert power over people is fast being replaced by “connect and collaborate” — to generate power through people.’ Leaders and managers cannot just impose their will, adds Seidman. ‘Now you have to have a two-way conversation that connects deeply with your citizens or customers or employees.’ “
The CDFA leadership didn’t do anything in terms of collaborating or having anything approaching a “two-way conversation” about the illnesses that led to the shutdown of OPDC, or the investigation that followed. Just acting like scared mice was a missed opportunity to educate people about what happens during a challenging food safety investigation of the sort that occurred at OPDC. It sounds as if McAfee tried to access information that would help him correct possible problems, but that the CDFA kept him at arms length. Sorry, “privacy” only extends to victims’ names—it doesn’t apply to insights and clues gained from the multipronged investigation. And bloggers here hitting McAfee over the head about his “husbandry” at this point isn’t productive, either.
The FDA deadwood thinks it can defy the trend described by Friedman, for a good while. But it understands that once the number of loyal and boisterous consumers spreads widely beyond California, powerful elected officials will have no choice but to act, and force replacement of the pathetic arrogant bureaucrats currently seeking to terrorize small dairies and deprive ordinary people of good food. But in order for that trend to come to fruition, dairy farmers must teach their consumers to become effective warriors, and consumers must take the solemn responsibility to heart.