How Introduced Crises Threaten Brand Reputation

By Tony Jaques

It is a fact that about three-quarters of all organisational crisis are not sudden unexpected events, but follow red flag warnings which could have, and should have, been identified in advance. But there is an emerging class of events I call ‘introduced crises’ – where reputational risk is instigated by external events, often social media-driven, over which the company or brand has little control and usually no warning.

A prime example is when American white supremacists staged a torchlight march in the glare of what were described as Tiki-torches, and the phrase was constantly repeated for weeks. No thought of course for the unlucky manufacturer, which found itself unwittingly linked to a racist cause. The company made its position clear, that Tiki Brand was not associated in any way with the events that took place in Charlottesville and their products are “designed to enhance backyard gatherings and to help family and friends connect with each other at home in their yard”. Sadly, the reputational damage was done, and the unwarranted association will likely persist for years.

The latest victims of such an introduced crisis are innocent businesses in Hong Kong, which recently found themselves caught up in pro-democracy protests. China has put heavy pressure on high-profile companies – which are seemingly not in any way complicit – to support the Chinese line and sanction staff who attend the demonstrations. They even forced the British CEO of Cathay Pacific Airline to resign.

However, introduced crises which damage brand are not new. Think of the brand impact when long-standing Subway spokesman Jared Fogle – widely known as the Subway guy – was jailed for 15 years for child sex offences.

Or when a manager at New Balance expressed support for Donald Trump’s ‘made in America’ trade policy, and the neo-Nazi website Daily Stormer labelled the company’s sneakers “the official shoes of white people”. The company quickly declared, “New Balance does not tolerate bigotry or hate in any form,” but here again the damage was done and the racist label gained enormous exposure.

Or consider the high-profile drug companies which got dragged into the death penalty debate and had to block their brands from being used in executions by lethal injection.

Then there was the notorious case when was falsely accused of sponsoring dogfighting. It arose from a photograph of a dogfight at a nightclub in Mongolia years earlier where Heineken posters appeared in the background, leftover from an earlier promotion. The brewery announced it had nothing to do with the event, but the allegation and the images continued to circulate online.

Given that social media has turbo-charged the spread of introduced crises, they are extraordinarily difficult to combat. So, what can companies do to protect brands which become innocently embroiled in controversy?

  • do not underestimate how deep and long-lasting reputational damage can be
  • issue prompt and firm statements denying involvement
  • respond consistently as often as required to dispute the claimed link
  • provide managers and staff with effective material to be used with customers and stakeholders
  • monitor and respond to misstatements on social media

Most importantly, responding to an introduced crisis demands balance; balancing the need to state the facts against the risk of giving oxygen to groundless claims and balancing the need to respond against continuing to repeat the false link. It is self-evident that a one-off denial is probably not enough. But the impact of unwarranted links and introduced crises can last for weeks or months and the company and brand need to establish a firm foundation to move forward.

Tony Jaques is Director of Issue Outcomes Pty Ltd, a specialist consultancy for people who work in issue and crisis management. For more articles like this one, visit www.issuesoutcomes.com.au

Tony can be reached at tjaques@issueoutcomes.com.au