It’s a troubling trend.
Many of the top PR mistakes in 2016 have included people and companies in the tech sector. It’s actually uncanny how many there have been — and an indicator that tech needs to start paying more attention to reputation management and not just marketing. Many CEO’s have huge egos that need to be kept in check — and sometimes the quest for scaling and valuation sees some companies playing fast and loose with the facts.
This list is in no particular order. I share it with hopes we can learn from them. There is no common theme in these examples and no overarching lesson learned. This is simply a list. Some of these are about ego. Some are about poor judgment. Some are about not taking communications seriously and underestimating the public. There are probably 100 different lessons in these five examples — all open to your own interpretation based on your personal experiences. I hope they help you.
I’m sure I’ve missed some – so please feel free to add them in the comments section.
Happy New Year, folks!
Photo: David Paul Morris/Bloomberg
Billionaire. Co-founder of PayPal and early investor in Facebook. But, in 2016 Peter Thiel’s broader reputation took a hit for reasons that were completely preventable. First, it was revealed Thiel was financially backing a lawsuit by former professional wrestler Hulk Hogan against Gawker Media over the releasing of a sex tape involving Hogan. It was unclear why Thiel was getting involved in this case. Hogan and Thiel won the suit and Gawker went under. And, then it was reported Thiel was donating millions to the Donald Trump campaign — a move that was denounced by many in the Valley. This is a classic example of ‘bored billionaire syndrome’. Politics and sex scandals are messy. Stick to tech. When it comes to reputations, no one is above the court of public opinion. In situations like this, it’s vital that the people around the CEO keep them in check.
Samsung Exploding Phones
Samsung started 2016 really well with new products and a huge market share. But, by the Fall, things got rough. There were numerous reports of various Samsung phones like the Note 7, S7 and Galaxy S7 Edge catching fire in people’s hands. Millions of recalls. Bad media coverage at a time when new competitors like Google Pixel are aggressively entering the market. Look, problems happen and they happen fast. But, it’s how you handle it and it took Samsung weeks to issue the first recall. It clearly did not know how to handle crisis and paid for it dearly. And it wasn’t just smartphones. You may recall Samsung had a problem with its popular washing machines — having to recall almost 3-million of them after excessive vibration started causing the top lid to fly off, reported injuring people. It’s all taking a toll on the brand with recent reports showing profits down 96%.
Yahoo Privacy Breach
Back in September, the news came out that hackers had hit Yahoo hard — stealing the personal information of some 500-million users. There’s never good timing for something like this — something that erodes confidence in a product that was already fading. However, this timing couldn’t have come at a worse time — just as Yahoo was negotiating a sale to Verizon for almost $5-billion. The real blunder here wasn’t the breach which is huge enough — but the fact it dated back to 2014 and took so long to uncover. And, then in October, it was learned that Yahoo had cooperated with the NSA and ‘secretly monitored emails on behalf of the U.S. government’. To make matters worse, in December it came out that about 1-billion other accounts were hacked back in 2013. Meantime, the Verizon deal isn’t done yet — but financial watchers say Yahoo should be fine, saying the public has a short attention span and will forget quickly. We shall see. By the way, who still has a Yahoo email account these days? 1998 called via dialup. They want their email back.
It seemed too good to be true. A med-tech company founded by Elizabeth Holmes that claimed it could identify illnesses in people from a single drop of blood. It was going to be huge. Rupert Murdoch invested. Walgreens lined up to do business with Theranos and even set up wellness centres in their stores. The company had a valuation of $9-billion. And, then news broke that there were problems. Major problems. The allegations were that most of the lab tests being done weren’t being done using Theranos technology — and that its lab tests were often inaccurate. Holmes’ response was to attack the media who reported the allegations. Then regulators got involved and reinforced the reports. In June, Forbes reported that Holmes’ net worth had plummeted from $4.5-billion to $0. Lots of investors lost money and the company’s value sank. In the end, it was reported that Holmes “built a corporation based on secrecy in the hope that she could still pull it off”. Theranos is trying to pivot in 2017. If it does, it may be a tech miracle.
The Guardian summed it up perfectly (no point re-inventing the wheel):
“As the year unfurled, Facebook had to deal with a string of controversies and blunders, not limited to: being accused of imperialism in India, censorship of historical photos, and livestreaming footage of human rights violations. Not to mention misreported advertising metrics and the increasingly desperate cloning of rival Snapchat’s core features. Things came to a head in November, when the social network was accused of influencing the US presidential election through politically polarized filter bubbles and a failure to tackle the spread of misinformation. The icing on the already unpalatable cake was Pope Francis last week declaring that fake news is a sin.”
Keep in mind, none of this has affected Facebook’s bottom line. However, 2017 can prove challenging. Zuckerberg needs some reputational wins.
Well, that’s the list for 2016. Again, it’s not a science so if there are some PR blunders you think should be mentioned, please add them in the comments section.
Happy New Year.