Author Archives: Jeremy Story

When PR Disasters Aren’t Really Disasters

emergency-planWe live in an age of instant analysis, a world where our Attention Deficit Disorder culture means that we rarely take the time necessary to understand the long-term impacts of current events.

That certainly applies to our political landscape, but it also applies to the business world. In an environment in which investors only care about the next quarter’s earnings, it can be hard to step back and focus on the long-term implications of opportunities and challenges.

This is especially true in the world of public relations. Each December, I present a list of the year’s biggest PR disasters. Some are almost a year old, and others are only months – or even days – old. Truth be told, that is not nearly enough distance to understand what the full impact will be on a company.

Having something negative happen is just one piece of a complex public relations puzzle. How quickly and effectively a company responds to that challenge can be as or even more important than the actual issue that has arisen. Equally important is how much trust a company has earned in the past helping insulate it from long-term damage.

The Value of Responding to a Crisis Quickly and Effectively

Southwest Airlines is a great example. It recently announced that it lost about $100 million in revenue due to a decline in ticket sales because of the death of one of its passengers. That is an enormous short-term figure, but what is the long-term damage to the company? From an investor perspective, the company’s stock dropped a little more than 7 percent in the aftermath of the incident, but it has rebounded and is now up more than 12 percent compared to where it was before the incident.

Southwest suffered a “PR disaster,” but because it responded effectively and had already earned trust from the flying public, it has weathered the situation well. The management team may be on a shorter leash, but even $100 million in lost revenue is a momentary blip, at least to long-term investors.

Next time you hear that a company has suffered a PR disaster, understand the context. Usually it means that a company has experienced a terrible incident. It doesn’t mean that all hope is lost. Philosophers have argued that the measure of a person is not whether they face challenges, but in how they respond. That is true with companies as well. Like Southwest, Toyota, Sony, Netflix, Apple, Volkswagen, Wells Fargo and United have all suffered “PR disasters” in the recent past, and all have managed to climb their way back. That is the power of having a strong crisis plan and responding quickly and effectively.

Jeremy Story is a Vice President at GroundFloor Media, where he co-leads the firm’s Crisis, Reputation and Issues Management practice. He has more than 20 years of experience helping companies ranging from start-ups to the Fortune 100 prepare for, manage, and recover from crisis issues.

2018 Already Offers Some Blue-Chip PR Disasters

The year is barely half over, but we already have a few blue-chip contenders for 2018’s biggest PR disasters. Among them:

RoseanneROSEANNE BARRThere has always been a fine line between creative genius and mental illness, and Roseanne Barr embodied that connection when she melted down on Twitter in May. Riding high from the return of her groundbreaking television show, Roseanne, the mercurial star made outrageously racist comments about a former advisor to President Barack Obama. ABC immediately cancelled her show, then revived it as a separate show, The Conners, that does not include her.

One company did emerge from the Roseanne debacle looking good, however: Sanofi, the makers of the sleep drug Ambien. When Barr said her tweets were a byproduct of using the drug, Sanofi responded by saying: “While all pharmaceutical treatments have side effects, racism is not a known side effect of any Sanofi medication.”

HM LogoH&M – The Swedish multinational clothing retailer became the latest poster child for a company that needs a more diverse group of employees making its marketing decisions. In January, the company released an ad that featured a young black boy wearing a hoodie that featured the phrase, “Coolest Monkey in the Jungle.” As media such as The Washington Post covered the issue, they quickly found that this wasn’t H&M’s first issue. In 2015, the company defended a lack of black models in its South African ads, saying, “… it is essential for us to convey a positive image. We want our marketing to show our fashion in an inspiring way, to convey a positive feeling.”

southwest-airlines-logoSOUTHWEST AIRLINES – As a company with one of the nation’s strongest reputations, Southwest suffered a rare stumble in April when a mid-air engine explosion killed a passenger. Fallout from the incident exposed tensions between management and airline mechanics, with the latter alleging that the company had adopted a culture that put safety second to on-time performance. In the two months since the accident, Southwest reported that bookings were down as much as 3 percent, which represents tens of millions of dollars.

apple-logoAPPLE – The computer giant started 2018 with the corporate equivalent of a big New Year’s Day hangover when it was disclosed that the company was throttling iPhone performance to maximize battery life. While that trade-off is one that many would make, the fact that they didn’t let consumers make their own choice was at the heart of the problem. Apple apologized and quickly offered an inexpensive battery replacement program for older phones, but the company still got a tidal wave of “planned obsolescence” stories that questioned its integrity.

You can see a list of PR disaster “winners” from previous years:

2017http://groundfloormedia.com/blog/2017/11/biggest-pr-disasters-2017-part-3/

2016http://groundfloormedia.com/blog/2016/12/biggest-pr-disasters-2016/

Jeremy Story is a Vice President at GroundFloor Media, where he co-leads the firm’s Crisis, Reputation and Issues Management practice. He has more than 20 years of experience helping companies ranging from start-ups to the Fortune 100 prepare for, manage, and recover from crisis issues.

 

Southwest’s Strong Reputation Helping it Weather the Storm

southwest-airlines-logoFew companies in America enjoy a reputation as strong as Southwest Airlines. Its customers may not get tattoos of the company’s logo, but millions of consumers turn to the airline because of its reputation for providing reliable and fairly priced air travel.

The recent news coverage of the grisly death of a Southwest passenger has posed a challenge to that brand loyalty. After all, reputations are finicky things. Famed investor Warren Buffett once noted, “It takes 20 years to build a reputation and five minutes to ruin it.”

While Buffett is right, it also represents the extreme. Southwest had a bad moment, but it is insulated from more serious consequences because of the brand loyalty it has earned over the previous decades. Customers trust it to provide quality service, and three months after the incident the company has only seen a slight decline in bookings.

The most damaging PR crises are those that happen to companies that haven’t already earned that level of trust with customers. Once the public is suspicious of you, it is much harder to get them to trust you. That work has to be done before any issues arise, or as part of a lengthy campaign following an issue.

Jeremy Story is a Vice President at GroundFloor Media, where he co-leads the firm’s Crisis, Reputation and Issues Management practice. He has more than 20 years of experience helping companies ranging from start-ups to the Fortune 100 prepare for, manage, and recover from crisis issues.

 

Starbucks Shows it Takes Discrimination Seriously

Starbucks_3By now, you have no doubt seen the news that two African-American men were arrested at a Philadelphia Starbucks  Thursday. The men were waiting for a friend when they were asked to leave because they hadn’t yet purchased anything, a request that appears to run counter to the company’s policy. The incident sparked outrage and protest amid accusations that race was at the heart of the incident – had the two men been white, for example, it is almost certain the police would not have been called.

Give Starbucks’ senior management and crisis communications teams credit for neutralizing a delicate situation. The company recognized immediately that it had a highly charged and potentially combustible issue on its hands, and its reaction has been impressive. Among its responses:

  • Starbucks immediately acknowledged the issue on social media and promised to look into the issue.
  • Once Starbucks quickly determined it was in the wrong, CEO Kevin Johnson personally apologized to the men. Johnson also apologized publicly in written and video statements that were posted to the company’s social media platforms.
  • Johnson traveled to Philadelphia and spent several days listening face-to-face to members of the community.
  • Starbucks reassigned the store employee who called the police.
  • The company announced that it will close all 8,000 of its U.S. stores on May 29 to conduct racial-bias education training for nearly 175,000 employees. Additionally, Starbucks shared that the curriculum for that training will be created in collaboration with some of the leading experts on addressing racial bias.

Bottom Line: Starbucks followed the PR crisis playbook closely, and it has been incredibly effective at neutralizing this crisis. It didn’t just react, it leaned toward overreacting. Protesters in Philadelphia (and nationally) have been trying to leverage this situation into something bigger, but Starbucks has been a step ahead of them from the beginning. Additionally, Starbucks has signaled to its socially conscious customer base that it shares their inherent values and is more than willing to be a leader in the fight for principles such as racial equality and respect for all individuals.

Jeremy Story is a Vice President at GroundFloor Media, where he co-leads the firm’s Crisis, Reputation and Issues Management practice. He has more than 20 years of experience helping companies ranging from startups to the Fortune 100 prepare for, manage and recover from crisis issues.

 

5 Truths About Crisis Communications

There are few things as frightening, potentially damaging and as misunderstood as a crisis. Here are five things about crisis communications that may be counter intuitive but are absolutely true: Read more after the jump…

Biggest PR Winners of 2017

Over the past month, I have shared some of 2017’s biggest PR disasters (see Part 1, Part 2 and Part 3). I thought it would also be interesting to take a look at some of the year’s biggest PR winners:

JJWATTJJ WATT …  JJ Watt is a star player for the NFL’s Houston Texans who is known for his community involvement. He took it to a new level following Hurricane Harvey, however. He started a fundraising campaign with a $200,000 goal that would be used to help Houstonians affected by the devastating flooding. Football fans quickly responded, and he met the $200,000 goal within hours. So he raised it to $1 million, and media coverage helped him reach that goal within a day. As the number climbed and climbed, and media attention got stronger and stronger, celebrities starting donating six- and seven-figure checks – people like Ellen DeGeneres, Jimmy Fallon, Miley Cyrus and Drake. And then corporate donors such as HEB and Walmart started adding even more. When it was done, Watt had raised more than $37 million that is being used to help people directly affected by the flooding.

TSWIFTTAYLOR SWIFT … This summer, Taylor Swift became the face of girls and women who fought back against sexual harassment and assault, and her battle occurred in a courthouse in Denver. Swift was groped by a local KYGO disc jockey at a Denver pre-concert meet-and-greet photo session, and he was fired after her complaint. When the publicity made him essentially unemployable, he sued Swift alleging defamation. Swift said she refused to be shamed by someone who assaulted her, and countersued for assault, asking only for the symbolic amount of $1. The case went to trial in Denver, and Swift prevailed. And in doing so, she became a champion for women everywhere.

CajunNavyCAJUN NAVY … Herbert Hoover popularized the concept of rugged individualism, the idea that individuals – and not government – should be primarily responsible for the welfare of Americans. The ideal is perhaps nowhere more obvious today than in the “Cajun Navy.” Formed in the aftermath Hurricane Katrina, the Cajun Navy is an ad-hoc group of volunteers largely based in Louisiana who help rescue victims of flooding when traditional first responders are overwhelmed. The group uses the smartphone app Zello to connect rescuers on bass boats, air boats, jet skis, etc. with those needing help. The Cajun Navy reappeared this year in the aftermath of Hurricane Harvey in Houston, and it is credited with saving thousands of lives.

THIRTEENWOMENTHIRTEEN WOMEN … Hollywood producer Harvey Weinstein was one of the most powerful people in Hollywood for decades. His track record of delivering hit after hit gave him enormous power, and he took advantage of that power to hurt women in the industry. His behavior had gone on for years, but this year 13 women summoned the courage to share their experiences – ranging from sexual harassment to rape – with NBC reporter Ronan Farrow. His article in The New Yorker sent shockwaves through Hollywood. Weinstein instantly became a pariah and a subject of criminal investigations, and more women throughout the worlds of entertainment and politics began sharing their stories, resulting in a wave of firings and resignations known as the “Weinstein Effect.”

The Biggest PR Disasters of 2017 – Part 3

Over the last couple of weeks, I have shared Part 1 and Part 2 of my biggest PR disasters of 2017, which included United Airlines, Red Cross, Pepsi, Facebook, Papa John’s, the Oscars, Kathy Griffin, USA Gymnastics, Nikon and Cheerios. Here is the final look back at the year’s biggest PR debacles.

Uber Logo UpdatedUBER … When the hashtag #DeleteUber becomes your company’s most impactful marketing campaign, you know what kind of year it has been. You can pick which issue was the worst: privacy and tracking concerns, erratic behavior from its CEO, a plot to evade regulators through a complex program named “Project Grayball,” allegations of systemic sexual assault, being banned in the London – the choices go on and on. Former CEO and still-current board member Travis Kalanick added to the miserable year by feuding with his fellow board members, threatening a potentially lucrative IPO.

Equifax Logo.svgEQUIFAX … There are only about 320 million Americans, so it takes a special kind of incompetence to let hackers steal the personal data (names, Social Security numbers, birthdates, addresses and driver’s license numbers) of more than 145 million of them. But the good folks at Equifax rose to the challenge. Particularly frustrating is that there is little to nothing that average consumers can do to punish the company. Fortunately, Equifax’s corporate clients have also grown leery of the company. And to date, it has spent nearly $90 million in legal fees and other expenses to respond to the incident.

Subway LogoSUBWAY … Subway has been on my annual lists of biggest PR disasters for so many years it should win a lifetime achievement award. In years past, the disasters have been much worse (think convicted pedophile/spokesperson Jared Fogle), but this year the ubiquitous sandwich chain made the list for a research study that found that the “chicken” it serves was only 50 percent chicken. Panicked Subwayophiles were relieved to learn that the other 50 percent was soy rather than something more sinister, but the sensational headlines were everywhere. In the end, it may not hurt Subway as much as it could. The decision-making hierarchy for eating at Subway starts with price, moves to taste and eventually lands at quality. Hybrid soy-chicken is still cheap and salty.

Nivea LogoNIVEA … Every year, a company wins the award for “Needs a more diverse set of employees.” This year, that company was Nivea. In February, the cosmetics company launched a “White is Purity” ad campaign that targeted consumers in Middle East countries. The campaign quickly went viral, and earned it the support of a white supremacist group that posted on Nivea’s Facebook page: “We enthusiastically support this new direction your company is taking. I’m glad we can all agree that #WhiteIsPurity.”

Adidas LogoADIDAS … Context is king in public relations, and Adidas blew it this year. The Boston Marathon has become an almost-sacred event in the wake of the terrorist bombings that killed three and injured hundreds of others in 2013. This year, Adidas launched an email promotional campaign to marathon participants congratulating them for “surviving the Boston Marathon!” The company quickly apologized and is unlikely to suffer any long-term damage. But, it was an extraordinary gaffe from a global company that doesn’t often blunder.

Read the entire series of 2017’s biggest PR disasters:

Part 1: Includes United Airlines, Facebook and Papa John’s Pizza
Part 2: Includes Kathy Griffin, the Oscars and Men
Part 3: Includes Uber, Equifax and Nivea

The Biggest PR Disasters of 2017 – Part 2

Last week, I shared Part 1 of my Biggest PR Disasters of the Year, which included United Airlines, the American Red Cross, Pepsi, Facebook, Papa John’s and former Denver Post sports reporter Terry Frei. Here is Part 2 of the look back at 2017’s biggest PR debacles.

Oscars_Logo-1002x326THE OSCARS AND PwC … If you are like me, you went to bed on the night of Feb. 26 thinking that La La Land had won the Oscar for Best Picture. It wasn’t until the next morning that I learned Moonlight had actually won. So what went wrong? In short, star-struck auditors at PwC. The duo assigned to the Oscars was more focused on celebrity selfies than their jobs, and they blew it by giving the wrong envelope to presenters Faye Dunaway and Warren Beatty. In an instant, an all-time Oscars moment was created and an 80-year relationship between PwC and the Academy of Motion Picture Arts & Sciences was frayed.

MenMEN … Between Silicon Valley and Hollywood, it has been a year when many powerful men have been outed as lecherous sleazebags. In June, The New York Times wrote a definitive piece on sexual harassment by employees at Silicon Valley venture capital firms, and it seemed like we had hit a tipping point. Women throughout the technology industry quickly shared their stories of harassment, and some of the worst offenders found themselves fired. Not to be outdone, the entertainment industry showed that when it comes to harassment, Silicon Valley is a bunch of amateurs. From Harvey Weinstein to Louis C.K. to Kevin Spacey, the #MeToo campaign helped Hollywood prove it really can be the Boulevard of Broken Dreams.

kathy-griffin-featureKATHY GRIFFIN … Infamous for her place on Hollywood’s D List, comedian Kathy Griffin has always pushed the boundaries of good taste. But in May, she accomplished what few others have been able to do – she made Donald Trump a sympathetic figure. Her photo shoot that featured a bloody, severed Donald Trump head was evocative of ISIS beheadings and immediately made her a pariah among both the political left and right. When she sensed the magnitude of the backlash, she quickly apologized, but it was too late. She lost her annual CNN New Year’s Eve gig with Anderson Cooper, and her planned comedy tour was cancelled.

USAGymnasticsUSA GYMNASTICS … Every four years, the U.S. Women’s Gymnastics team wows America with its gold-medal-winning Olympic performances. What goes on between Olympics, however, is far more sinister. Team doctor Larry Nassar was accused by 125 female athletes who said he abused them them during medical appointments. While nearly none of the original accusers was a household name, superstar Olympian Aly Raisman announced earlier this month that she was also a victim. The governing body named a new CEO this month, as it tries to reform a culture that was focused more on medals than the safety of its athletes.

NikonLogoNIKON … Nikon is known the world over for its professional camera equipment, and in 2017, the company launched its latest innovation – the $3,200 D850 DSLR. To create awareness of the launch, the company hand picked 32 photographers to get an advance look at the camera and share their experiences on the company’s website. Despite picking photographers from Asia to Africa, all the photographers had one thing in common: they were men. As The New York Times reported, “It was a baffling oversight to many female photographers, who have no shortage of challenges finding opportunities in a notoriously male-dominated industry.”

Cheerios-logoCHEERIOS … It’s no secret that there is an issue with the world’s bee population. Their numbers are declining, and scientists aren’t exactly sure why. As a breakfast cereal with a cute bee mascot, Cheerios seems like a logical product to help bring attention to this issue, and it did just that by distributing 1.5 billion wildflower seeds to help with bee habitat restoration. Unfortunately, the promotion quickly caused controversy when it was learned that “the packets Cheerios sent out included seeds for plants deemed invasive in some states and outright banned in others.” Cheerios pushed back on the accusations, but the damage was already done.

Read the entire series of 2017’s biggest PR disasters:

Part 1: Includes United Airlines, Facebook and Papa John’s Pizza
Part 2: Includes Kathy Griffin, the Oscars and Men
Part 3: Includes Uber, Equifax and Nivea

The Biggest PR Disasters of 2017 – Part 1

As 2017 comes to a close, we take time to reflect on the year’s biggest PR disasters:

United_Airlines_Logo.svgUNITED AIRLINES … The only good news for United Airlines is that its string of PR disasters occurred early in the year when they could be overshadowed by newer debacles over time. But what a year it was. The airline took the worst hit when it literally dragged a passenger off an overbooked plane, breaking his nose and knocking out teeth in the process. While that incident took the lion’s share of the headlines, the airline also managed to make additional waves when it banned two girls from flying because they were wearing leggings and forced a mom to hold a toddler in her lap for a full flight because it gave away the toddler’s paid-for seat to a standby passenger. United apologized for all the incidents, but the airline’s brand was harmed and its stock price remains down nearly 17 percent since the first incident.

Red_Cross_Logo.svg

RED CROSS … NPR and ProPublica have been a thorn in the side of the American Red Cross since the media outlets examined the nonprofit’s spending following Superstorm Sandy in 2014. They found, for example, that seven months after the storm, the Red Cross still had not spent $100 million of the $300 million it had raised. Unfortunately for the Red Cross, NPR revisited the questions about the Red Cross’ efficacy just as Hurricane Harvey hit Texas and the Red Cross was frantically trying to raise money for relief efforts. The Red Cross promised more transparency, but a generation of Millennials who like to invest locally have been finding smaller nonprofits on the ground in affected areas to support. The long-term implications of this PR disaster for the Red Cross have to be scary. Read more after the jump…

Client Culture – The Company You Keep

Screen Shot 2017-10-25 at 11.33.00 AMWhat are your boundaries when it comes to client culture and the type of clients you would represent? And would you have the courage to maintain those boundaries if the client represented hundreds of thousands of dollars in annual fees? How about millions of dollars?

How much do you care about client culture?

Would you be willing to represent Harvey Weinstein following his rape and harassment allegations? Sitrick and Company does. How about Bill O’Reilly following his sexual harassment claims? N.S. Bienstock Agency did. Would you be willing to create campaigns for the NRA or the anti-gun group Americans for Responsible Solutions? WPP did both… at the same time.

Read more after the jump…