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July 1, 2012

When good days go bad

by Howard Fox Chartered Marketer

Recovering from a public relations disaster.
From the trivial: Michal Jackson’ hair exploding into flame during the filming of a Pepsi commercial, to the dire – BP’s Deep Water Horizon oil spill which killed eleven and caused a massive ecological disaster, in business things go wrong.  We marketers spend a lot of time telling anyone who will listen about how to create a positive impression of organisations. But what when things go wrong? Even relatively trivial events (although it must be said that Mr. Jackson (1958 – 2009) did suffer second degree burns to his scalp) can inflict massive damage to brand value and long term business value. While there is usually a multidisciplinary approach to managing significant disasters within larger organisations, it really falls to marketers to mitigate the long-term damage to the brand and indeed the entire company reputationBad news travels fast, hits hard

Howard with Greg Marinivich (Pulitzer Prize winning photographer) on the occasion of the Launch of ‘Acumen’ GIBS quarterly business magazine for which Greg shot the cover and a photo essay.

Companies (irrespective of their size) are much like high profile people, they are entirely dependent on their reputation, while the press are in the business of reputation-destroying news: In late April this year, the New York Times reported allegations that Walmart had in the past used bribes to facilitate its expansion in Mexico. The company’s shares lost an eye watering $10 billion within days.  You can’t afford to underestimate the speed of impact negative press (and indeed social media) can have on your organization. So even for those of us working in organisations a little less the size of Walmart need an effective way to rally the executive troops in a time of crisis. The simplest method I have worked with was a simple SMS event summary to the company Exco and directors. Colour coding: green, yellow (advisory), red (urgent executive action needed) and blue (company future in danger) – prevented “crying wolf” while getting the message across when needed.

Years of exemplary reputation count for naught

“The minute you think you have it made, disaster is just around the corner.” Joe Paterno

Mr. Paterno (now diseased) knew more than most about the subject of reputational disaster. He enjoyed a stellar career as head coach of Penn State’s (American) football team for over 46 years. The US press still refers to him as “the winningest major college football coach of all time”. More relevant to this article, he was summarily fired in November last year. He was accused of “relative inaction”. Upon hearing an allegation from a graduate assistant that a former assistant coach had sexually abused a young boy in 2002 – he only reported the incident to University Management, but not directly to the police. Everyone has a duty to do everything in their power to bring child abusers to book. Mr. Paterno’s sin was one of omission – i.e. not doing enough to match societies expectations of him. In the Penn State board’s eyes he was as guilty as the perpetrator himself. His exemplary record for almost half a century if anything probably raised the level of expectations from him. The board, eager to protect the entire University’s reputation and determined not to be accused of inaction themselves rapidly fired him as head coach as well as firing the President of the entire university.

The same holds true in business. Nothing makes juicer news than the downfall of a previously blemish free organisation. But there is a second lesson here. Companies are expected to be good corporate citizens. Think carefully. Is there anything your organisation doesn’t do which could be reputationally damaging?

The Senator problem

We are the authors of our own disasters (Latin proverb)

You have probably noticed – it is always the American senator who has based his election on clean living and family values who promptly gets caught in bed with someone other than his wife… and is ripped apart by the press. It is about being consistent in one’s behaviour. If your organization sets itself up as ‘virtue personified’ you have effectively put a reputational target on your back. Consider the response to Tiger Wood’s infidelities. Tiger, having a somewhat clinical (some would say “holier than thou”) attitude based on clean living, was ripped apart at the very first suggestion of dalliance. Disgraced, sponsors fleeing, he has never really recovered. Compare that with Phil Michelson who took the number one spot from Tiger. In spite of rumors of, it seems, an illegitimate child; he and his wife being ‘swingers’ and even his wife having an affair with Michael Jordan, he has not been crushed. This is because his image was more that of the ‘everyman’ – flawed and not creating a virtue of his character. It might have been less differentiating while Tiger was number one but it was much lower risk given his lifestyle. Let’s not forget – if we put our company’s reputation out there as a virtue (think Woolies) then we are required to work doubly hard to ensure there is no hint of impropriety.

Disasters don’t keep 9 to 5 hours

Prepare to be surprised.  Poster –

April this year was the hundred-year anniversary of one of the world’s most infamous disasters. In the dark of night, at twenty minutes to midnight on the 14th April 1912, just four days into her maiden voyage, the ‘unsinkable’ Titanic sank. With the death of 1514 passengers and crew, the Titanic remains in the public’s mind as one of the greatest maritime disasters of all time. I am sure that the management of the White Star line was at the time enjoying a well-deserved nights rest having just sent their star attraction off on its maiden voyage. Likewise, the Bhopal gas disaster, the world’s worst industrial disaster (which killed over ten thousand and injured more than half a million people) also happened at night.

Disasters by their very nature don’t occur conveniently mid morning on a slow business day. Invariably they happen when decision-makers are unavailable or distracted. So plan ahead. You can’t predict the future but you can have base plans in place, conceived while not under pressure, which will improve the company’s response time. Assign specific roles. Appoint a limited number of management who are empowered to speak to the press (and strictly ban all others from comment). This will prevent contradiction. Ensure that systems are in place to get accurate information about what has happened. Nothing is worse than underestimating the problem: “There is no danger that Titanic will sink. The boat is unsinkable and nothing but inconvenience will be suffered by the passengers.” -Phillip Franklin, White Star Line Vice-President

Don’t go yachting

Yachting. Just because you can afford a yacht doesn’t mean you are smart enough to operate one. De-motivational poster-

If your organization does experience a disaster, the public expects a period of mourning from management. It is simply the right thing to do. Ask Tony Hayward. The CEO of BP took a day off from the rigors of crisis management during the Gulf of Mexico oil spill to watch his 52-foot yacht “Bob” compete in a posh race in England. Those back in the Gulf whose lives his company had ruined were less than pleased: “Man, that ain’t right. None of us can even go out fishing, and he’s at the yacht races,” said Bobby Pitre, 33, “I wish we could get a day off from the oil, too.” [] Mr. Hayward’s comments that “I would like my life back,” probably didn’t help. President Obama’s chief of staff, said that Hayward had committed yet another in a “long line of PR gaffes“. Less than ten days later BP announced Mr Haywood would be replaced.

Never miss a good opportunity to shut up.
The reality is that for most of us (by the grace of God) won’t ever have to manage a really serious reputational disaster, even though we can clearly learn valuable PR lessons from others’ efforts to do so. But what if you have, what should be one of the world’s truly great marketing jobs: Minister of Tourism for South Africa… and the press constantly undermines your efforts with a constant flow of stories of shark attacks, the Shrien Dewani murder trial and reports of Cape Town as a racially divided city (New York Times). Minister van Schalkwyk recently says there is no specific plan to deal with this spate of unflattering articles. I am sure that isn’t entirely true. His communication team will no doubt be working hard on the issue. I suspect what he really means is that based on Will Roger’s advice, there is no plan for a direct rebuttal. If a shark attack happened, it happened, and extending the damage by continuing the debate in the press is often counter productive.

Pacific Airlines in 1967 is possibly the finest example of what not to do. In previous years Pacific suffered an attempted high jacking as well as a horrific crash in which a suicidal passenger shot the pilot and co-pilot, causing the plane to plunge into a mountainside, killing all aboard. In a campaign now part of marketing history, management came up with a controversial marketing campaign:Hey there! You with the sweat in your palms. It’s about time an airline faced up to something. Most people are scared witless of flying. Deep down inside, every time that big plane lifts off that runway, you wonder if this is it, right? You want to know something, fella? So does the pilot, deep down inside.” – Pacific Airlines print ad. To add insult to injury, flight attendants passed out “survival kits,” including a lucky rabbit foot and security blanket. When the plane landed, they announced, “We made it! How about that!”

Unsurprisingly business tended to go those competitors who weren’t mentioning the unmentionable. Sales slumped and Pacific fired the comedian running the campaign as well as two executives. Just months later, the company was sold and became Air West. Lesson learnt.

First published in Your Business


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