Admittedly I’ve had a bit of an obsession with the Tiger Woods scandal. He was (or is— I’m not really sure anymore) my favorite athlete and the whole reason I took up golf. Having followed the minutia of his swing changes for 10 years, I think I’m entitled to listen to a few 911 tapes or double click on the latest Elin sighting. Usually such pursuits are driven by a healthy dose of schadenfreude, but in this case, it’s utter amazement that a US$1 billion enterprise could nearly fold in a few short weeks.
That amazement quickly gave way to a rather predictable scene: experts using Tiger’s failed response to re-iterate well-known Communications truisms that call for a full public mea culpa. I don’t know if a trip to Oprah’s couch would really affect the decisions of his sponsors, but I think there’s a more interesting subject at hand: what can corporate communicators—the guardians of valuable brands—learn from the implosion of Tiger Inc.? I’d argue that the real lessons lie not in the response but in the prevention of crisis.
Let’s step back. A corporate crisis occurs when public expectations of a company conflict with a newly discovered reality. Such a gap threatens a company’s license to operate, but our generally low expectations of companies tend to make this a rarity. For example, one could argue that AIG and many banks survived an unparalleled image crisis and remain in business because we already had little regard for their ethics or competency (and not just because they mean as much to the global economy as Tiger does to the PGA Tour). Similarly, it’s no shock to those of us buying computers and TVs for less than $500 that Wal-Mart may not provide the gold standard of associate wages and benefits. So, what may (or may not) be a crisis on the order of recent sweatshop scandals exists largely in the background of record profits.
By contrast, a real schism between expectations and reality can put companies at great risk. As pointed out in a recent NewYorker profile, John Mackey, CEO of Whole Foods, exposed his company to boycotts and a series of unflattering discussions not because he took some kind of radical view in a WSJ op-ed against public health care options, but because the leader of our Mecca for organic, sustainable, righteous shopping revealed himself as…a conservative! Think about it this way: if former Wal-Mart CEO H. Lee Scott Jr. made the same argument, would any eyes blink?
I’d like to offer a way to think about this expectation/reality frame as you work to protect your own corporate brand. First, seek to understand your own stakeholders’ expectations of the company. Do they center on safety, reliability, customer service, or social values? Next, identify organizational factors that could challenge those expectations. So, if your reputation is built on “family values” and the CEO has a few other families, Communications needs to know. Finally, reduce the likelihood for an expectation/reality gulf by limiting exposure of those threats, or by migrating expectations to a more realistic place.
Example A: If I’m running Tiger Inc., I will make it my business to know if there are threats to the brand I’ve helped create and go to every spot in the Vegas–Orlando nightclub corridor to ensure those threats remain at bay.
Example B: If I’m CCO of a bank that defines its brand around customer service but has recently eliminated live call center support, I’d better redirect our branding efforts to highlight the great savings our operational efficiency provides.
Allow me one final, very technical point on Accenture and crisis communications (and, BTW, I took this picture at SFO three weeks before Gawker did at LaGaurdia). If the public expectation is for superior strategy and expertise, know where your ads are and take them down ASAP!
NB: Part of me still loves Tiger and I reserve the right to post “Tiger Inc.: The New Tylenol of Crisis Response Theory” at any point this year (I hope the first Sunday in April). Let me know your thoughts.
on 13 January 2010
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I agree. It’s about credibility. I don’t care if McDonald’s doesn’t flame broil their hamburgers, but I would be outraged if Burger King did not because they’ve told me that their alleged superiority rests on their burgers being flame broiled. If BK is lying or overstating about that, then who can believe anything else they say (e.g., their hamburgers are 100% pure beef) or imply (they operate sanitary restaurants)?
on 13 January 2010
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So what’s the solution to the bulge-bracket investment banks’ “bonus outrage” problem? Muzzling their CEOs? Inquiring minds could still figure out average compensation from the public filings. Develop marketing campaigns around how companies that employ average Americans are now able to stay in business because they (the companies) are able to re-finance portions of their capital structures that might otherwise force them into bankruptcy? While true, it seems a little abstract for a PR campaign…
on 13 January 2010
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That’s a great question Ted R… essentially, yes in the long run – but maybe with a little less snark. The problem banks now face is the same one Tiger faces (maybe in a lot of ways depending on how far you want to take the metaphor). Now that they are forced to defend big bonuses, they’ve almost certainly lost the PR game. A prevention strategy would have identified huge bonuses + even the potential for government support as issue way before the summer of 2008. Many people knew as the bubble started to burst that the government would be forced to provide bailouts – in fact, some people argue that it was one reason the banks behaved how they did. Communicators protecting their company’s brand must have the foresight to pre-wire the public that huge bonuses are part of the business to protect the backlash that comes from the reality that those bonuses could get funded by taxpayers. No one said it was easy!
on 13 January 2010
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Fascinating topic and some well thought out arguments by both the author and readers. Keep me in the loop for future posts.
on 14 January 2010
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Good points all around…thanks for the response
on 14 January 2010
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It comes back to the need to having a thorough understanding of your celebrity, and doing your scenario planning before the contract is signed. Obviously he had informed enablers. A trip to the couch at this stage won’t save him unless his wife forgives him. He erred by violating the basic principles of good PR – tell it first, tell it fast, tell it all – then beg for forgiveness.
on 15 January 2010
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The problem with John Mackey is not that he’s a conservative per se, but that Whole Foods has a history of mistreating its employees (and, from time to time, its customers). A friend of mine used to stock shelves at a Whole Foods and his experiences were quite shocking (he and his co-workers ended up winning a sizable lawsuit against the company as a result). The image of Whole Foods as a “wholesome” and “organic” company clashes with its oftentimes brutal, anti-union policies.
That said, your principal argument is dead on. Expectations play play a critical role in economic crisis and political change. Think of bank runs. Fearing that banks will run out of money, people pull their money out all at once thus compounding the problem that they initially feared. Economic crisis thus becomes self-fulfilling.
In politics, one would think that angry citizens would be all the more inclined to rebel against a poorly performing regime. But then why do regimes in places like Egypt continue to reign after decades of corruption and rights abuses? People can’t imagine an alternative to the rule of the regime. In other words, the game is not just about controlling citizens’ expectations for the regime, but ensuring that citizens can’t expect anyone aside from the regime to change the status quo.
In business, Starbucks has been known to play the role of the regime. They will open more coffee shops than are necessary in a given area in order to bankrupt their competition. Then they close down the extra shops to consolidate costs. Good stuff.