It was a relatively busy year when it comes to public relations challenges by some of the world’s biggest corporations and organizations.
I deliberately avoid individual PR blunders (i.e. Bill Cosby) because those are usually the product of one person’s arrogance, crime and/or errors in judgment. Instead, corporate and institutional PR mistakes are made by teams of people — they are often strategic team decisions versus one person’s decisions and actions.
There’s still a few weeks to go, so there may be amendments to this list. For now, let’s call it a ‘living document’, shall we? Here we go:
Volkswagen Emissions Scandal:
There should be no surprise here.
VW’s blunder story isn’t the kind that comes and goes. This one has stickiness. It has “legs” as we used to say in the newsroom. It’s one that has, and continues to have, dramatic financial impact on the company.
In a nutshell, Volkswagen used that solid German technology it’s known for to develop a way to cheat environmental emission tests — while simultaneously marketing its low-emission vehicles. In some cases, emissions were reportedly 40 times higher than allowed in the U.S.
VW’s response has been fairly textbook for any company caught with its hand in the cookie jar. Michael Horn of VW America said “We totally screwed up” while the CEO resigned. It took some time, but a top executive with Audi has resigned. VW has launched an internal inquiry and will recall millions of cars in the new year, costing it billions of dollars. Shares in the company have plummeted.
Most of these responses weren’t really voluntary decisions and they lacked a level of authenticity, in my opinion. It seems the public agrees as VW sales are sinking like a rusty anvil.
Like any relationship, we can forgive a mistake — an honest mistake. However, as I tell my children, when you lie, you are impacting the trust in our relationship. And, trust is feeling — not thinking. Breach of trust is very difficult to overcome. It takes much more work. As VW has learned, the lie is often worse than the action in terms of impact.
Ashley Madison Privacy Breach:
Ashley Madison is the online dating site that encourages married people to have an affair. Embedded in that message is the idea that because everyone on the site is in the same boat (cheating on a spouse), that it’s safer in terms of your spouse not finding out. It is the website’s “unique selling proposition” as they say in marketing.
So, imagine the surprise of people who pay for this service (privacy and discretion), when the story broke back in August that hackers retrieved and released the Ashley Madison client list — about 37-million accounts.
First of all — what were these people thinking? If hackers can infiltrate the Pentagon, they can crack a dating site. Just know this as fact.
Second – and possibly more interesting and potentially damaging — was the news that Ashley Madison was overwhelmingly men. It was the virtual equivalent of the worst nightclub ever with one woman to every ten men. According to reports and analysis by Annalee Newitz:
“Ashley Madison created more than 70,000 female bots to send male users millions of fake messages, hoping to create the illusion of a vast playland of available women…What I have learned from examining the site’s source code is that Ashley Madison’s army of fembots appears to have been a sophisticated, deliberate, and lucrative fraud.”
The company’s PR response was interesting to say the least.
It came out roaring immediately with the “any publicity is good publicity” approach by stating that business was booming because of the attention surrounding the leaked database. It’s an unsubstantiated statement and very difficult to believe. This was a very weak strategy.
The CEO didn’t even resign immediately. He only resigned after his emails were hacked, alleging he personally had an affair on his wife with a Toronto escort.
The Taxi Industry:
I can only imagine how blacksmiths felt when the automobile was invented. Your way of making a living and providing for your family is suddenly at risk of disappearing due to technological evolution. I don’t want to diminish that. It has to be very challenging and emotional. But, I highly doubt blacksmiths rioted in the streets.
Look — technology is here in the form of Uber — the ride-sharing app and company. And, it’s taken on the monopoly that was the once-lucrative taxi industry around the world. The fact of the matter is this — if consumers were satisfied with the pricing, service and safety associated with the taxi companies, there would have been no market demand for Uber. Quite clearly, there was a problem that required a solution.
The cab companies can’t argue on price. So, they began by arguing they were safer. Many people have stated that the worst Uber car they’ve been in was better than the best taxi they’ve been in.
They’ve argued Uber isn’t regulated and not properly insured. No one I know cares about that.
And, taxi drivers have responded aggressively — whether it’s been blocking traffic and slowing down commuters in Toronto — or with violent protests around the world — from Mexico City to Paris….and all points in between. It’s a bad strategy.
This approach has backfired, not surprisingly. Nothing is worse PR than disrupting traffic and slowing down commuters who are angry and frustrated on a good day. If anything, it has drawn more awareness to Uber from those who had no idea what it was.
Uber’s valuation now is approaching and incredible $68-Billion — making it bigger than GM, Ford and Honda as recently reported in Forbes. It’s not going anywhere.
As for the blacksmiths — with the introduction of the automobile — they realized times were changing and they had to change with them. In fact, many blacksmiths reportedly ended up becoming the first generation of automobile mechanics. They evolved.
The taxi industry should take note and learn from history. They had a horrible 2015 — time to change the PR approach for 2016. Stop focusing on what you have no control over (evolution) and start focusing on what you do have control over (how you respond to evolution).
If you’re interested, I wrote an entire blog on how Uber is winning the PR war with this issue. You can read it here.
Speaking of being stuck in the dark ages…….FIFA.
Anyone who follows journalist Andrew Jennings was not surprised by the alleged bribery and ticket scandal that hit the world governing body for soccer, FIFA, this past year. Jennings uncovered a lot of dirt with the International Olympic Committee — before turning his attention to FIFA a number of years ago — writing his first book on the issue back in 2006. His book was what launched the investigation. In the end, a number of officials were arrested, accused of a racket totalling more than $150-million. The investigation has focused on the awarding of the 2018 and 2022 World Cups to Russia and Qatar.
At the centre of the PR scandal was the former head of FIFA, Sepp Blatter. This is important to the story because it was evident this was a systemic problem with FIFA — and not an isolated incident.
FIFA’s response to the charges and the PR crisis that followed was nothing short of arrogant. It blamed everyone and anyone, tried to portray itself as the victim of a smear campaign and, remarkably, not only did Blatter not resign — he was re-elected shortly after the scandal broke.
The fact he allowed his name to stand for re-election was incredible from a PR point of view. He only resigned after being re-elected and pressured by sponsors (aka. the money) after it became too much to hold off. In crisis communications, fast and decisive action is paramount.
Without knowing the intimate details, I suspect (having seen and experienced this situation before) that the communications team for FIFA was likely giving the proper advice — it just wasn’t being taken. Ego is an incredible thing and has been the downfall of many a person.
As for FIFA, international soccer is a craze that is unlikely to be affected by a scandal — even of this magnitude. Attendance will continue to soar, merchandise will be sold and corporate sponsors will still sign on. That’s the funny thing about sports — people are passionate about it, the players and their teams. The excitement always seems to drown out the scandal. This is why I am limiting my list of PR blunders to only one sports-related. It’s not the real world. It’s some ridiculous fantasy-land where the customers forgive and forget quickly. And sports executives know it.
This was a last minute addition — but had to crack the top 5 after the food chain’s multiple and ongoing PR disasters this past year.
We get it — restaurants sometimes have contamination issues. And, they often rebound and recover. But, Chipotle’s don’t seem to be going away.
As recently as last month, some PR experts were saying Chipotle would be just fine — and would get through this year unscathed despite 43 locations being temporarily shut down last month. I personally didn’t agree but I wasn’t in the article. I felt this would cling as I wasn’t seeing the company taking full responsibility for what was happening.
As time passed….more of its locations were closed temporarily…then throw in a norovirus outbreak out top of the E-Coli problems…with 141 Boston College students getting sick after allegedly eating at Chipotle this month. It was far from getting better.
Chipotle took a thumping as stocks have plummeted about 30% since early November. That’s about $6-billion in devaluation. Billion.
It’s moments like this when you get to see the true DNA of a company’s media relations. Everyone can be nice in good times — but how will you do when the pressure is on. Chipotle’s CFO responded by first blaming the Centre For Disease Control before turning to blame the media.
“Of course the press writes ‘Outbreak expands to new states’, which is not true. Because the media likes to write sensational headlines, we can probably see when somebody sneezes that they’re going to say, ‘Ah, it’s E. Coli from Chipotle’ for a little bit of time.”
As a former journalist, I can tell you reporters chuckle when the “it’s the media’s fault” argument comes out. It’s a sign of desperation and weak deflection the media will remember in the future. Poor strategy. And, if it wasn’t a strategy — if it was the CFO going off-the-cuff, then it was a poor example of not controlling your message.
There was backlash from that — so the company wisely sent out the CEO to do something that should have happened a long time ago….apologize in a major way. He did so back in November, but in a statement. That just won’t cut it.
So, the CEO picked The Today Show on NBC to say sorry.
He came off as very genuine. He truly did. And, big points for that. The feeling was one of transparency and quality assurance moving forward.
The issue is that this should have happened earlier. In crisis communications, speed and timing are everything. Waiting it out as a strategy was never going to work. It rarely works.
Want proof? After the CEO apologized, share prices bounced back slightly. Imagine if he had done this earlier instead of the company blaming everyone else? It could end up being a multi-billion dollar mistake.
The gold standard in the food industry for handling a contamination crisis is Maple Leaf Foods where 23 people died. Here’s a good overview of how it handled the crisis and went on to recover and regain customer confidence. I’ll give you a hint: they acted fast and took responsibility.
(BONUS: ON THE BUBBLE)…..
Starbucks Disastrous “Race Together” Campaign
Best intentions aside, this was an idiotic idea and it really backfired on Starbucks CEO Howard Schultz. This PR blunder was in my early edition of the Top 5 of 2015…but got bumped out last minute by Chipotle.
In a nutshell, Schultz instructed his barista’s everywhere to write “race together” on the cups to try and begin a conversation with customers about race relations. Important conversation, certainly. A conversation that should happen in a busy 8 a.m. lineup of 10 people waiting ten minutes for a $5 coffee on a good day? Nope. Stupid. No one can sum it up better than John Oliver did in his hilarious, and pointed, summary.
It didn’t last long after the backlash in the media and social media — and the “race together” campaign ended abruptly.
My question is this: where was the CEO’s executive team? His PR team?
It’s their job to speak up, push back and offer some perspective through a different lens. That may have been somewhat challenging if, as reported, his executive team was made up predominantly of white men.
Maybe that’s a good place to start before pawning off solving the world’s race relations issues to your minimum-wage earning baristas.
In the interim, you’re a coffee shop. How about you sell coffee? And, faster, please. We all have places to be.
I welcome your insights and thoughts to this unscientific assessment of the top PR blunders of 2015. Thanks for reading.
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