If you’re the CEO of a public company, you already know that your company’s reputation accounts for more than $1 in every $5 of shareholder value. You know that a company’s reputation is seen as the cornerstone of its corporate value. And, you’re probably familiar with Warren Buffet’s famous mantra: “we can afford to lose money — even a lot of money. But we can’t afford to lose reputation — even a shred of reputation.”
Your company’s reputation (and your personal reputation) should be managed like a priceless asset and protected as a matter of life or death. One survey found that 53 per cent of companies that experienced a crisis still hadn’t returned to their pre-crisis share prices a year after the incident. How a company responds to a crisis can make or break its reputation.
To help you prepare for the unthinkable, I’ve compiled this list of different high-profile crises. This list is in no particular order and isn’t intended to offer any definitive lessons. Rather, it’s to get you thinking. Things can go wrong (or right) in unexpected ways — is your team prepared?
PR Crises To Help You Prepare
1. Aggressive media relations
Uber provides a lesson in how not to handle media: In 2014 Uber executive, Emil Michael, suggested that Uber should consider hiring a team of opposition researchers to use the company’s customer data to dig up dirt and spread personal details about a journalist who had criticized the company. This was a serious threat — the app contains personal details like ride data, home addresses, work addresses, daily routines, and credit card information.
Michael thought he was commenting off-the-record. He would release a statement expressing regret for his comments and underscoring that they did not reflect the company’s views. It was unfortunate timing for Uber, as the comments came at a time when the company was trying to improve its media relations and its management team’s image.
2. Angry consumers
In July 2011, Netflix emailed customers with news that it would unbundle its video streaming and DVD service to create two separate packages. The changes would increase the price for DVD customers. Under intense pressure, and in reaction to venomous consumer feedback, that separate DVD service, Qwikster, was cancelled within a month of its launch.
The company’s share price plunged and Hastings gave up 50 per cent of his stock option awards for the year. Netflix had to go on an apology tour. CEO Reed Hasting said, “I messed up. I owe everyone an explanation. Many members felt we lacked respect and humility….That was certainly not our intent.” Some reporters likened this mistake to New Coke. Ouch.
3. Angry shareholders
Aviva became the first blue chip company to receive a ‘No’ vote from it shareholders on matters of compensation after the credit crunch. Management at the insurance giant had their tails stuck between their legs after their multi-million dollar bonuses were rejected by investors at their annual general meeting.
In 2009, the company’s chairman, Lord Sharman, was also roasted by one shareholder for failing to fire chief executive Andrew Moss after an office affair was revealed. The AGM was seen as a turning point — shareholders were finally taking concrete measures to protest bad management.
4. Vendor failures
California-based Conal Footwear found itself in a tough spot after a Reddit thread erupted. A user shared an image of tread marks from the company’s new pair of boots. The problem? The soles left swastika imprints. This appeared to be an honest mistake made by one of the company’s manufacturers, but the pic went viral, with 116,000 votes and 5,100 comments appearing on the Reddit thread alone. Within days, the photo had more than four million views.
Things took a turn for the worse when neo-Nazi groups began endorsing the product. It didn’t help that the boot shared a name — Polar Fox — with a WWII military operation. The company responded as best it could, recalling the boots within 48 hours and issuing a statement on the homepage of its website rather than bury it in the media room.
5. Disgruntled employees
In March 2012, Goldman Sachs executive Greg Smith penned a damning resignation letter, which The New York Times published. In the letter he excoriates the firm’s culture: “When the history books are written about Goldman Sachs, they may reflect that the current chief executive officer, Lloyd C. Blankfein, and the president, Gary D. Cohn, lost hold of the firm’s culture on their watch. I truly believe that this decline in the firm’s moral fiber represents the single most serious threat to its long-run survival.”
The problem, Smith added, was that the firm cared more about making money and less about taking care of its clients. “I attend derivatives sales meetings where not one single minute is spent asking questions about how we can help clients. It’s purely about how we can make the most possible money off of them. If you were an alien from Mars and sat in on one of these meetings, you would believe that a client’s success or progress was not part of the thought process at all.”
The letter trended on Twitter the morning it was published and spawned at least one clever parody: “Why I’m Leaving the Empire, by Darth Vader.” It was a bad day for the much-maligned firm. On top of Smith’s letter, stakeholders and investors chastised Goldman Sach’s response in the press for being “Too little, too late.”
6. Executive succession
The most skilled PR practitioners nip a crisis in the bud before it becomes one.
Normally, the unexpected death of a charismatic and successful CEO would send share prices reeling. Total, a French oil company, avoided the drop by announcing a new CEO the next day.
CEO Christophe de Margerie was killed when a drunk driver drove a snowplough into de Margerie’s corporate jet at Moscow’s Vnukovo airport. The plane was engulfed in flames and all four people onboard died. The new CEO, Patrick Pouyanne, had long been exposed to media and investors and was a respected entity. The transition was smooth, and the share price unaffected.
7. False accusations
In March 2005, a Wendy’s customer in San Jose claimed to have found a finger in her chili. One month later, a San Jose Police Department investigation revealed Wendy’s was not at fault and the district attorney charged the customer with attempted larceny.
Despite this result, Wendy’s was left with the unenviable task of rebuilding trust with its consumers, without reminding them of the finger. To compound matters, the finger itself stayed in the news: yes, the accuser would face criminal charges for trying to defraud Wendy’s, but the source of the finger she placed in the chili was never revealed.
8. Natural disasters
In March 2011, a magnitude 9.0 earthquake hit Japan’s northeastern shore. It’s the most powerful recorded earthquake to ever hit Japan. The subsequent tsunamis wreaked additional devastation across three coastal prefectures, wiped two towns off the map, claimed thousands of lives and displaced more than half a million people.
The Cosmo oil refinery in Ichihara city was one of many business hit by the quake. Throughout the 10 days the refinery was engulfed in flames the company provided regular updates, expressing “the sincerest apologies for the problems and unease caused to the nearby residents and to all those concerned.” They ensured residents that “every action will continue to be taken to resume normal operations as soon as possible.”
In 1998, Henry Silverman, a private equity investor at Hospitality Franchise Systems, led his company into a disastrous merger. The $14 billion deal with CUC International formed Cendant Corporation, but the honeymoon was short-lived. Shortly after the merger, Cendant uncovered a massive, decade-long accounting fraud at CUC International. CUC’s top executives had been preparing false business statements. The total estimated cost to investors was over $19 billion, making it one of the largest financial scandals of the 1990s.
10. Government investigation
In 1998, Bridgestone began receiving complaints about its Firestone tire treads’ tendency to separate, often resulting in horrible accidents. For two years, the company refused to admit there was a real problem. Instead, Bridgestone attempted to blame customers and pointed the finger at Ford. Motor Co. (which used many of the tires). The U.S. National Highway Traffic Safety Administration (NHTSA) launched a large-scale investigation, and finally, on August 9, 2000, the company issued a recall.
Bridgestone issued a recall for 6.5 million tires — the second largest in U.S. history at the time. The NHTSA eventually announced that the faulty tires resulted in nearly 200 deaths and more than 700 injuries.
In 2014, Sony Pictures was the victim of a cyber attack that leaked emails and forced the electronic release of upcoming films. The government of North Korea spearheaded the hack in response to Sony’s upcoming movie, The Interview, which included the assassination of North Korea’s leader. Apparently dictators don’t like being made fun of. In any case, as the leaks continued, and the gravity of the breach became apparent — largely through leaked emails in which senior executives insulted Hollywood stars — the company remained mostly quiet. It took Sony more than a week to issue substantive comments on the matter. The breach was humiliating, exposing, pay disparities and personal feuds.
Sony followed-up by firing its senior communications executive and threatened reporters against using the information from the hack with legal action. The studio drew President Obama’s ire for cancelling the release of The Interview: “We cannot have a society in which some dictators some place can start imposing censorship here in the United States,” Obama said. “Because if somebody is able to intimidate us out of releasing a satirical movie, imagine what they start doing once they see a documentary that they don’t like or news reports that they don’t like. That’s not who we are. That’s not what America is about.” Sony insisted that “we have not caved, we have not given in, we have persevered, we will not back down,” before releasing the movie on various digital platforms.
12. Product tampering
In 2010, a couple from Suffolk County, NY, decided they did not want to pay $1.40 for a pack of Jell-O. The couple developed a scheme in which they bought the pudding, replaced the Jell-O powder with a mixture of sand and salt, and then returned the package to the grocery store for a refund. They managed to hit up four stores with 50 fraudulent packages of pudding before getting caught. A customer who bought one of the fraudulent packages complained to the grocery story and surveillance video led police to the criminals. While the story received national attention, the issue was mostly seen as an isolated incident and Jell-O managed to avoid becoming the story.
13. Proxy contests
Billionaire investor Nelson Peltz launched a high-profile proxy campaign against DuPont in 2015, painting the chemical company as an underachiever (even though DuPont had a total shareholder return of 266 per cent over the previous six-year period). Within three months of his campaign launch, Peltz’ narrative appeared to be gaining traction. DuPont’s share price rose five per cent after the Institutional Shareholder Services advised DuPont shareholders to vote for Peltz to join the board, leading to speculation that Peltz’ presence would boost the company’s value.
In the end, Peltz lost, which came as a surprise to most observers and analysts. Despite his winning record as an activist shareholder, Peltz failed to secure the backing of a sufficient number of institutional investors and retail investors. Investors came to the conclusion that DuPont’s CEO was already making the type of pro-shareholder moves that activists try once they get on the board.
In 1993, Pepsi had to deal with a scary rumour: a syringe was found in a can of Diet Pepsi in Washington State. Within one week, there were more than 50 reports of tampered Diet Pepsi cans across the country.
Both Pepsi the FDA were confident the reports were outright lies (they were). The company came out hard, staunchly defending itself to kill the rumour. This approach only works when you know the facts are completely in your favour. Pepsi produced four videos throughout the crisis, including a detailed review of its canning process, and eventually, security footage of a Colorado woman putting a syringe into a can of Diet Pepsi behind the store clerk’s back.
CEO Craig Weatherup took that evidence to the airways, appearing on news stations — with the explicit support of the FDA — to assure the public that Diet Pepsi was safe for consumption. Within two weeks, the rumours fizzled out and the FDA made multiple arrests for false reports. While sales dipped two per cent during the crisis, Pepsi recovered within one month.
15. Sexual harassment
David Davidar left Penguin in 2010. The company announced that Davidar was leaving to pursue “his successful writing career and other projects.” The real reason for his exit remained a mystery for a couple days until new facts came out: a recently-dismissed Penguin employee had filed a $423,000 lawsuit against the company, and a separate $100,000 suit against Davidar. The employee alleged that she was fired after complaining of sexual harassment from her boss. She claimed damages from Penguin for wrongful dismissal and the “harsh, vindictive and malicious” way the company treated her after she complained about Davidar. Penguin said the employee resigned from her position after “having declined to pursue other career opportunities within the organization.” The lawsuits were settled quickly thereafter.
16. Special interest groups
In early 2010, Greenpeace launched a campaign criticizing Nestlé’s palm oil sourcing practices. It rolled out a “Take a Break” ad campaign that went viral. It featured an office worker gnawing on an Orangutan’s finger instead of a Kit Kat Bar. The tagline? Kit Kat Killer. The response? After its Facebook page was overrun with comments about its palm oil sourcing practices, the company posted the following message:
“To repeat: we welcome your comments, but don’t post using an altered version of any of our logos as your profile pic—they will be deleted.”
According to Greenpeace, Nestlé also successfully had YouTube remove the ad campaign from its platform, citing copyright concerns. Nestlé denied the claim, but said “we notified YouTube about the campaign video’s infringement of the visual identity of our Kit Kat brand. The video is now back up and we will not submit the form again,” a Nestlé spokesperson told CNN.
Within 10 weeks, Nestlé announced it would stop sourcing unsustainable palm oil.
17. Trademark infringement
In 1999, the Washington Redskins lost their trademark protection because the U.S. Patent and Trademark Office ruled the name was disparaging to Native Americans. While the football club was under no obligation to change its name, it lost the ability to prevent counterfeit Redskins merchandise from being sold in the country. The team has since spent the better part of two decades appealing various court decisions on related matters. In October 2016, the Supreme Court declined to hear the Team’s legal challenge.
18. Unethical behaviour
Once the poster-child of the post-financial crisis banking world, Wells Fargo’s relied on its ability to cross-sell more profitable products to its customer base. This would prove to be bit of a mistake. Executives sought to drive growth by putting undue pressure on its employees to hit sales quotas. Many employees took to the challenge by fraudulently opening customer accounts. Most of these accounts were closed before customers noticed, but in other cases consumers were hit with associated fees or took hits to their credit ratings.
Wells Fargo fired about 5,300 employees who engaged in illegal tactics, and was forced to return $2.6 million in ill-gotten fees, and pay $186 million in fines. But the biggest hit Wells Fargo will take is to its reputation, as the media and government officials spent much of the year slamming the bank for its fraud. CEO John Strumpf stepped down—with a $130 million payout.
In 2013, a whistleblower exposed a practice whereby Princess Cruises would discharge gallons of polluted bilge waste along the British coast. The cruise company used a device known as a “magic pipe” to bypass on-ship water treatment systems and unloaded wastewater directly into the ocean. The company was fined $40 million dollars—the largest of its kind. Investigators also discovered that employees covered-up these illegal practices before investigators could get on board.
The cruise line published a written statement, as well as a YouTube video from its president. The company said it was “extremely disappointed” that employees had violated company policy and federal law regarding discharge of pollutants. The cruise line added that it cooperated with investigators after the magic pipe was unveiled in 2013 and had taken numerous steps to fix the problem.
“Although we had policies and procedures in place it became apparent they were not fully effective,” the statement said. “We are very sorry that this happened and have taken additional steps to ensure we meet or exceed all environmental requirements.”
20. Organizational misdeeds
We can look to the Wounded Warrior Project for this example. This big U.S. charity fired its top executives after an investigation into accusations of lavish spending on parties, travel, and hotels, as well as exorbitant salaries. Over the course of a four-year period, CEO Steven Nardizzi and COO Al Giordano spent more than $800 million in donations on these lavish expenses. As one former employee (and veteran) put it “Going to a nice fancy restaurant is not team building. Staying at a lavish hotel at the beach here in Jacksonville, and requiring staff that lives in the area to stay at the hotel is not team building.”
WWP would subsequently close nine offices, fire half of its executive team and redirect millions in spending to mental health care programs and partnerships as part of an organizational overhaul.
21. Corporate misbehaviour
Tesco has a bad habit of getting into corporate misdeeds. In 2014, it was mired in an accounting scandal which coincided with food safety scares and chronic financial underperformance. It has become the poster-child of corporate misbehaviour, dealing with high executive turnover. In 2016, the company faced legal action by a group of investors seeking £150m for losses related to the 2014 accounting scandal. This, in the same year the Serious Fraud Office charged three former Tesco executives over the same accounting scandal. And that was before the FCA investigation ever concluded.
22. Management deception
Companies face a crisis of management misconduct and deception when management indulges in deliberate acts of illegality, concealing or misrepresenting information about itself and its products. The Satyam scandal—”India’s Enron”— serves as a poignant example. In 2009, the company’s chairman resigned, confessing that he had manipulated account’s to the tune of $1.47 billion. In the immediate aftermath, investors lost as much as $2.2 billion as the company’s shares tanked. Six years later, the former chairman was convicted with 10 others. The Indian arm of PwC was fined $6 million by the SEC for not following auditing standards in their duties related to the accounts at Satyam.
One of the more famous cases dates back to the mid-1990s. Six of Texaco’s African-American employees sued the oil company for racial discrimination after damning conversations between executives revealed a propensity to belittle minority employees in racist terms. As the news broke, Reverend Jesse Jackson became Texaco’s most vocal opponent, calling for a boycott. CEO Peter Biljur issued a public apology, deploring the insensitivity of the taped remarks and placed the company’s equal-opportunity programs under review. He also commissioned an investigation by an outside lawyer. The executives in question were suspended pending the result of the investigation. He and his team then went on tour, visiting all branches and company offices to apologize to employees. The company then hired Uniworld Group to run an ad campaign to douse the flames. Jesse Jackson would soften his view in light of the company’s proactive handling of the crisis. Texaco settled the suit, agreeing to pay $176 million and Biljur implemented additional discrimination checks for executives and managers.
2001 was not a good year for Pacific Gas & Electric Co. With soaring wholesale power costs outpacing retails prices (the result of California’s 1996 deregulation law preventing higher costs from being passed on to consumers), and a drought that reduced the amount of hydroelectric power combined with delays in new power plant approvals, the company filed for chapter 11 bankruptcy. The crisis cost the company $40-$45 billion. It would emerge from bankruptcy three years later after paying $10.2 billion to its creditors. As part of the restructuring, the company’s customers had to begin paying above-market prices for several years, to pay off the debt.
25. Workplace violence
In 1986, Patrick Henry Sherrill, a 44-year-old mail carrier from Edmond, Oklahoma who was known as a troublesome employee showed up to the post office in his uniform with three pistols and a bag of ammunition. For 15 minutes, he went on a murderous rampage, killing 14 coworkers. In the two decades since Sherill’s rampage, the U.S. Postal Service has tried to prevent worker violence, but there have been other attacks. Nearly 50 people have died in post office violence since the 1980s.
26. Environmental disaster
This list wouldn’t be complete without mention of the Exxon Valdez tanker spill of 1989. The ship ran aground, spilling 11 million gallons of crude oil into Alaska’s Prince William Sound. The oil damaged more than 1,300 miles of some of the most remote and pristine shoreline in the U.S.
The company was very slow to contain the spill, refusing to communicate openly about the incident. Exxon Chairman Lawrence Rawl was immensely suspicious of the media, and reacted accordingly. Media coverage escalated while Exxon dodged the media. The Chairman refused TV interviews, saying he had no time for “that kind of thing”. A company spokesperson misrepresented the extent of the spill and clean-up efforts. More than a week later, the company eventually held a press conference. Small pieces of good news claimed by the company were immediately contradicted by the eyewitness accounts of the present journalists and fishermen. Rawl gave a live interview and when asked about the plans for the cleanup, said it was not his job to read such reports, placing blame for the crisis at the feet of the world’s media.
Nearly three decades later, the sound’s coastal ecosystem is permanently damaged—thousands of gallons of oil still pollute the beaches.
27. Product safety
In 1996, Odwalla juice experienced an e-coli outbreak. One child died and more than 60 people in the Western U.S. and Canada became sick after drinking the contaminated juice. Sales plummeted 90% and Odwalla’s stock price fell 24%. Customers filed more than 20 personal-injury lawsuits, and it looked as though the company would never recover. But Odwalla provides a case study on how companies can rebound if they handle the crisis effectively.
CEO Stephen Williamson ordered a complete recall of all (potentially) contaminated products from 4,600 retail outlets, forming internal task forces to execute the recall within 48 hours, and at a cost of $6.5 million.
In all his media interviews, Williamson expressed sympathy and regret for all those affected, immediately promising to pay medical bills. He conducted daily company-wide conference calls to give employees the chance to ask questions and get the latest information. Within 24 hours, the company launched a website (remember, this is 1996), which received 20,000 hits within 48 hours. The company spoke openly and frequently with media to provide updates. These proactive communications efforts, in conjunction with the swift recall went a long way to building goodwill.
28. Mysterious circumstances
In March 2014, Malaysia Airlines flight MH370 disappeared, carrying 239 passengers onboard. Given the nature of the crisis, the airline struggled to effectively manage the crisis. It took the airline 16 days to send a text message to relatives of the passengers on board. The message was received as inappropriate, impersonal and detached. However, to the airlines credit, it established daily media briefings, published daily statements, and provided a focal point for the public to get the latest information.
From October 2014 through January 2017, a comprehensive survey of 120,000 km2 (46,000 sq mi) of sea floor about 1,800 km (1,100 mi) south-west of Perth, Western Australia, yielded no evidence of the aircraft.
29. Terrorist attacks
Months later, Malaysia Airlines flight MH17 was shot down over Ukrainian territory, killing all 283 passengers and 15 crew onboard. The plane was brought down in an area controlled by pro-Russian separatists. The attack received enormous media attention due to the nature of the previous crisis, the geo-political issues between Ukraine and Russia, and the violent nature of the crisis.
Within one hour of the crash, Malaysia Airlines tweeted confirmation that the flight had lost contact over Ukrainian airspace. The response was speedy, and included a statement with greater detail on the exact waypoint when Ukrainian air traffic control lost contact with the Boeing-777. It also hired a PR agency to handle crisis communications, taking care to communicate its financial assistance for each victim’s next-of-kin, offering to fly relatives to “Amsterdam or wherever appropriate to be able to continue the grieving process.” Learning from the MH370 experience, the airline stayed in daily contact with relatives and provided 100 caregivers to help with support and counseling. It’s just too bad the company followed this up with an ill-advised “Bucket List” campaign.
30. Offensive commentary
Air China’s editorial team published an article in its inflight magazine that warned passengers about visiting certain areas of London. “Precautions are needed when entering areas mainly populated by Indians, Pakistanis and black people.” The editorial naturally prompted derision and outcry among London MPs and residents.
“I am shocked and appalled that even today some people would see it as acceptable to write such blatantly untrue and racist statements,” said Mr Sharma, the Labour MP for Ealing Southall. She invited Air China reps to visit her constituency “to see that a very multicultural area is safe, and would be of great value for those visiting London to see.”
It took Air China a couple of days to apologize after social media quickly turned the offensive comment into a global news story.
31. Market manipulation
In 2015, Volkswagen was caught in an embarrassing lie by the Environmental Protection Agency. Volkswagen claimed its vehicles were environmentally friendly. By that they meant they had installed software that detected when cars were being tested, and changed the car’s performance temporarily to reduce emissions.
After it was revealed, VW botched its response. CEO Michael Horn told a U.S. House subcommittee, under oath, that only a few rogue engineers were to blame. That claim was proven false when Spiegel issued a report with evidence that at least 30 managers were involved in the scheme. Given that the altered software affected emissions, mileage, cost, and power — the types of things executives would care about — it was tough to imagine the software’s installation went unnoticed. Regardless of who was to blame, having the CEO lie under oath with a dubious explanation, is pretty bad PR.
In 2015, the FBI and IRS disclosed cases of corruption by officials at FIFA, indicting 14 people for wire fraud, racketeering, and money laundering. The officials in question corrupted media and marketing rights for FIFA games in the Americas, including $110 million in bribes.
One of those officials, FIFA VP Jack Warner, attempted to defend himself on by citing an article from The Onion—a satire publication—to prove his innocence. One week later he appeared on TV with a bizarre statement, saying the “gloves [were] off”, claiming to have “compiled a comprehensive and detailed series of documents including cheques and corroborating statements”, which he said revealed his “knowledge about certain transactions at FIFA including, but not limited to its president Sepp Blatter”. Warner was ultimately banned for life by FIFA, which took a $369 million loss in 2016 as a result of the corruption investigation — triple the losses from the year before. Since the scandal broke, FIFA has spent nearly $130 million on lawyers and court costs.
33. Government intervention
In 2016, a federal judge asked Apple to cooperate with the FBI to help unlock Syed Farook’s iPhone. Farook was responsible for the San Bernardino shootings, which left 14 people dead. If Apple cooperated, it would need to overhaul its system that locks the phone down after 10 unsuccessful password attempts. CEO Tim Cook called the order “chilling” and said Apple would not give the FBI a master key that could unlock hundreds of millions of iPhones. The FBI insisted this was a one-off request. Donald Trump chimed in, admonishing Apple and calling for a boycott of Apple products.
Despite the controversy, Apple handled the situation well, actively communicating its rationale to consumers and shareholders, knowing its massive base of loyal fans would likely appreciate the company’s efforts to protect their privacy. Eventually, the FBI announced it was able to access the device without the the need for master key software, and asked the judge to drop the case.
34. Supply chain errors
In 2003, two worm-infested Cadbury chocolate bars were found in Mumbai. At first, the company was slow to respond, releasing a statement asserting that the infestation could not have happened in its manufacturing plants. The Indian equivalent of the FDA disagreed, resulting in a public joust between the two. In the initial days of the crisis, Cadbuy’s approach didn’t generate much sympathy or trust in public opinion.
The company modified its strategy. It pulled its planned marketing campaigns and replaced them with an educational PR campaign, taking a proactive media relations approach to keep the media informed on the specific measures it was taking to correct manufacturing and storage processes. The PR campaign was backed with real action; Cadbury imported a new manufacturing machine and changed its packaging.
While its chocolate bar sales in India took a 30% dip in the wake of the crisis, it would eventually recover. Within eight weeks of introducing the new packaging and accompanying campaign, sales reached pre-crisis levels. Within eight months, consumer confidence in Cadbury was fully restored.
35. Operational errors
JetBlue had an operational meltdown after an ice storm hit the U.S. East Coast, resulting in 1,000 canceled flights in the space of five days. The company’s response was simply perfect. CEO David Neeleman never blamed the weather (which he could easily have done). Instead, he wrote a public letter of apology to the airline’s customers, introduced a customer bill of rights, and offered monetary compensation to passengers affected by the storm. Neeleman took to YouTube, Anderson Cooper, David Letterman, and the Today Show, among others, to apologize for his company’s operational failures.
36. Honest employee mistakes
One of the American Red Cross’ social media managers accidentally sent out a tweet—intended for her personal account—from the Red Cross’ account. The tweet read, “Ryan found two more 4 bottle packs of Dogfish Head’s Midas Touch beer…when we drink we do it right #gettingslizzerd.” The tweet stayed up for an hour before it was deleted.
Embracing the levity of the situation, the social media director followed up with a humourous tweet from the Red Cross account to acknowledge the mistake: “We’ve deleted the rogue tweet but rest assured the Red Cross is sober and we’ve confiscated the keys.”
Dog’s Head Midas Touch embraced the #gettingslizzerd hashtag and encouraged its followers to donate to the Red Cross. Luckily for the Red Cross, the accidental tweet was not controversial. It was able to move on with nothing more than a blush.
37. False advertising
Taco Bell’s parent company, Yum! Brands was sued over the contents of its taco meat. The allegation? The company’s “seasoned beef” contained only 35% beef and was thus guilty of false advertising.
Taco Bell came out hard, launching a multi-platform campaign to push back against the allegation. It focused the bulk of its efforts on YouTube, Facebook, newspaper ads and online marketing to reveal its “not-so-secret” recipe. It turns out the recipe contains 88% beef, with the balance of the ingredients accounted for by the secret sauce. The public and consumers responded positively to the campaign and the lawsuit was dropped within four months.
38. Extramarital affairs
Boeing’s former CEO, Harry Stonecipher was asked to return to the company in 2003 to boost its reputation after a series of military procurement scandals forced his predecessor to resign. The second honeymoon was short-lived. Stonecipher resigned two years later after his affair with an employee became a matter of public record. In an odd statement, he announced that was was resigning in embarrassment, without citing affair as the cause of his embarrassment.
39. Hidden imagery
In 2013, a Reddit user noticed something rather peculiar about JC Penney’s new teakettle: it looked like Hitler. Within days, the image went viral, and the kettle sold out. JC Penney reacted as best it could. Inundated by tweets poking fun at the company, it responded with this quip: “Totally unintentional. If we had designed it to look like something, we would have gone with a snowman.” The company also took down the billboard that was featured in the viral photo and didn’t re-list the kettle on its website.
Death is perhaps the worst crisis a CEO could ever deal with on his or her watch. Richard Branson had to deal with such a crisis when a test flight went incredibly wrong. One of the company’s aircrafts — designed to run passenger flights into space — split in pieces as it fell to Earth. One pilot managed to eject from the cockpit, but the other was stuck in his seat and plummeted to the ground, dying on impact.
Branson immediately flew to the crash site, tweeting his deepest condolences as he made the voyage and wrote a longer, emotional blog post later that evening.
41. Lewd behaviour
This one still makes me sick to my stomach. In 2009, two Domino’s Pizza employees uploaded a video to YouTube showing off disgusting acts they were enjoying as they prepared pizza — passing wind on a pizza, shoving cheese up their nostrils, sneezing on pizzas, and the like. The video quickly amassed more than a million views. It took the company two days to respond, finally firing its new YouTube stars. The video continues to live on, long after the firing. The company would later admit it had hoped the crisis would pass, and had underestimated the viral potential of social media.
42. Unfair media coverage
When you grow as quickly, and with as much profile, as the famous dating app, Tinder, you are bound to come under media scrutiny. Vanity Fair took it upon itself to expose the app’s “corrosive effect on dating”. Tinder responded in a less-than-nuanced manner, going on a 30-tweet tirade against the Vanity Fair journalist. Tinder insisted it was more than an outlet for hookups, accusing the journalist of one-sided journalism. While every company will eventually receive media coverage it doesn’t like, losing your cool on Twitter is usually not the best response.
43. Taking a legal win too far
Following the 2012 shooting at the Aurora Theatre, families of some of the victims sued the owner, Cinemark, with claims of negligence. In the end, Cinemark won in the court of law, but lost in the court of public opinion with how it handled the court victory. It went after the families for the $700,000 in legal fees it spend defending itself. That’s after posting a $704.9 million profit in the same quarter.
Two of these families’ sons had heroically saved others in the theatre. Media coverage was brutal and #BoycottCinemark went viral. It took the company two months to settle with the families.
44. Offensive advertising
As part of its “Up for Whatever” campaign, Bud Light printed the line “The perfect beer for removing ‘No’ from your vocabulary for the night.” As you can imagine, an alcoholic beverage company insinuating that removing consent would be okay, did not go over well. It’s mind boggling that the company didn’t have the checks and balances in place to catch something so blatantly obvious. Critics said Bud Light undermined “no means no” anti-rape efforts. The company responded with a statement admitting it “missed the mark” and eventually conceded that the marketing department did not review the messaging before it was released.
45. Responding to a crisis with the wrong tactics
The last thing you ever want to do when handling a crisis is open the floodgates to criticism that you can’t control. Managing your message is a key part to recovering from a bad situation and it’s easy for things to get out of hand if not properly contained.
Unfortunately, no one told this to SeaWorld’s PR team, who decided to host a Reddit-style Ask Me Anything session as their primary tool for communicating with the public. As you can imagine, things turned ugly quick. Thousands of people piled on SeaWorld for their gross mistreatment of animals, slamming the theme park in an open forum for the entire world to sit back and watch. The #AskSeaWorld campaign clearly failed to turn around the park’s problems, as the aquarium continues to suffer from low audience numbers and decreased stock prices.
46. Aloof CEO
The Deepwater Horizon oil spill is the largest accidental marine oil spill in history. Not only did it cause catastrophic and irreparable damage to the environment, it also dealt a serious blow to British Petroleum’s reputation.
The British firm’s lack of compassion and empathy was personified by CEO Tony Hayward. Hayward quickly become public enemy number one after a series of careless statements, from saying the leak was “relatively tiny”, to stating “I’d like my life back” during the aftermath. That wasn’t the only misstep; the company’s website had next-to-no information about the situation and offered a measly $5,000 to potential plaintiffs to try and stave-off lawsuits.
47. Angry brand advocates
It’s never good to find yourself in the crosshairs of an angry army of Reddit users calling for your head. The company’s interim CEO, Ellen Pao, found herself taking cover after firing popular employee, Victoria Taylor, who managed the site’s much-beloved Ask Me Anything Q&As.
It didn’t take long for a public petition demanding for Pao to step down immediately to garner close to 200,000 signatures. After only eight months at the helm, the beleaguered CEO did just that. Pao posted to Reddit that she resigned because she didn’t believe she could achieve the company’s growth targets, not because of the issue with Victoria Taylor.
48. Bad choice of spokesperson
Jared Fogle was once larger than life, both literally and figuratively. Having dropped 245 pounds, the much admired weight-loss champion and Subway pitchman was the posterboy for the sandwich giant’s “Eat Fresh” campaign.
Fogle became a household name that helped grow the company into an international powerhouse with more locations than McDonald’s. But that came to an abrupt end when Fogle was heard bragging on tape about his pedophilic tendencies with underage boys. He’s now divorced and doing 16 years behind bars.
49. Delayed product launch
Admit it — at one time or another, we’ve all pretended to act shocked when our card gets declined. Insufficient funds? Must be a mistake! Turns out 16 million HSBC account holders in England had a legitimate reason to be surprised after Apple Pay didn’t work on their iPhones the day it was supposed to launch.
HSBC failed to notify its customers that the planned Apple Pay rollout was delayed. Customers quickly turned to social media to direct their frustrations at the bank, which simply replied with pre-written statements that lacked any apology. It’s an important lesson for companies to be proactive in foreseeing any hiccups that can cause damage to the brand. HSBC learned its lesson though, tweeting the actual launch 48 hours in advance.
50. Employees publish offensive content on social
Note to all employees, particularly those working in public relations who should know better: don’t write ignorant, racist tweets that could get you fired, because chances are, they probably will. PR Executive Justine Sacco found that out the hard way after tweeting “Going to Africa. Hope I don’t get AIDS. Just kidding. I’m White!”
The company managed to stave off criticism by taking decisive action and severing ties with Sacco. She was immediately fired by her firm, IAC, after the tweet started trending.
51. Fake news
Just days after President Trump’s surprise election victory, Pepsi found itself on the receiving end of a damaging fake news article that had many Trump supporters calling for a boycott of the soft-drink maker. A false report quoted Pepsi CEO Indra Nooyi as saying Americans who voted for Trump should “take their business elsewhere.” The quote went viral, posing a threat to the company’s profit margins and reputation. The scary reality is that it’s getting harder and harder to differentiate between fact and fiction, especially when nearly half of adults now get their news from Facebook.
Talk about an ill-advised decision that literally stopped the household press. Home printer manufacturer Hewlett-Packard quietly issued a “security update” that rendered many printers useless overnight. Because of the update, third-party or recycled cartridges stopped working with HP printers, forcing many to go out and buy HP branded ink.
HP responded by acknowledging it could have done a better job communicating the update, but stood by its position to only use its own cartridges. The company was accused of trying to make an extra-buck. Not only that, it was dishonest with its clientele, and faced the monumental task of regaining their trust and business.
53. Becoming a prop in a political fight
Sometimes the best response is short and to the point, leaving nothing for interpretation. This was Skittles’ approach when Donald Trump Jr. posted a picture of a bowl of the colourful candy to reiterate his position on the Syrian Refugee crisis. The image was accompanied by the question“If I had a bowl of skittles and I told you just three would kill you, would you take a handful?”
Not wanting to be accused of profiting from the controversial tweet, Mars Inc., parent company to Skittles, issued a single statement: “Skittles are candy, refugees are people. It’s an inappropriate analogy. We respectfully refrain from further comment, as that could be misinterpreted as marketing.” Not only did Mars receive a ton of praise for the response, but its lawyers managed to get the tweet removed for violating copyright laws.
54. Product defect
Under-promise and over-deliver is a strategy many companies use to exceed expectations with their clients. Unfortunately for Under Armour, they did the exact opposite: over-promised and under-delivered with its new, high-tech speed skating suits for the 2014 Winter Olympics.
Under Armour boasted that the new suits would help American athletes race to the top of the podium, but many skaters blamed flaws in the design for their lackluster performance. Facing controversy, Under Armour decided to be a good sport about the whole thing and publicly supported the team’s decision to go back to the old outfits and announced it would continue sponsoring the team for eight more years.
55. Bad optics
If you’re heading to Washington to beg for a 25 billion dollar bailout in taxpayer money, it’s probably not a good idea to arrive by private jet. Unfortunately, that’s exactly what the leaders of General Motors, Chrysler, and Ford did back in 2008.
Lawmakers lashed out at the BIg Three CEOs for their obvious shortsightedness and expressed concern that the executives flew private at a time when their companies were strapped for cash. Representative Gary Askerman likened the move to “seeing a guy show up at the soup kitchen in a high hat and tuxedo.” Fearing further bad press and public backlash, they chose to drive to their next hearing in hybrid cars.
56. Fulfillment failings
When Oprah gives her blessing to a new product, there’s a very good chance it’s going to do incredibly well. However, KFC’s found out there can be too much of a good thing when Oprah gave posted a coupon for its grilled chicken line on her website.
Restaurants across the US were swamped with customers demanding their free chicken. Thousands of hangry people were turned away after the chain couldn’t keep up with demand and KFC had to send out rain-cheques to those who were turned away.
57. Changes to employee benefit plans
If there was ever a cardinal rule for public speaking, it would be don’t blame sick babies for your problems. Unfortunately this is exactly what AOL CEO Tim Armstrong did. In his speech explaining why the company was cutting costs, Armstrong pointed to the expensive health care benefits for two employees’ newborn children.
Not only is this bad business, AOL’s cost-cutting measures had nothing to do with employee benefits, but the company’s 401(k) matching program. Armstrong could have avoided this entire fiasco had he simply left the babies out of it.
58. Cultural illiteracy
Zara, the popular Spanish clothing retailer, sparked global condemnation after it released a line of children’s pajamas that resembled concentration camp uniforms.The company cited shirts in American Westerns as inspiration for the pajamas, which included a gold star that looked like the Star of David. This wasn’t the first time Zara had been accused of cultural illiteracy. In 2007, the fashion company released a handbag with swastikas on it. Zara issued an apology for the pajamas and pulled the clothes out of circulation.
59. Expired Digital Infrastructure
If you’re old enough, you may remember Heinz’s ‘The best things comes to those who wait.’ ad campaign. While this slogan may be true about the company’s slow-pouring ketchup, it’s definitely not true when it comes to renewing domain names.
Heinz found this out the hard way and was forced to apologize after a customer scanned a QR code on an old ketchup bottle to enter a contest advertised on the label and was directed to a German pornsite. The condiment giant clearly forgot that the physical product had a much longer shelf-life than the online campaign. Heinz had failed to register the website address for more than a year.
60. Tasteless humour
Many of IHOP’s quarter million twitter followers wondered if the restaurant was out to lunch after it posted a controversial tweet. The popular US breakfast chain had kicked off a well-received edgy social media campaign, but it went too far when it tweeted a shot of its pancakes with the caption, “Flat but has a GREAT personality.”
The Twitterverse was quick to criticize IHOP for it’s misogynistic and inappropriate tweet. The company issued an apology and removed the post, but the damage was already done.
61. Unwelcome endorsements
New Balance, the popular Boston-based shoe company, found itself running into a major PR crisis after praising then President-elect Donald Trump’s trade policies. A company spokesman told a reporter that“we feel things are going to move in the right direction” under Trump. It didn’t take long for customers to voice their anger online, sharing photos of their sneakers in garbage cans, toilets, and even set on fire. Just as New Balance was trying to put the shoe on the other foot, a white supremacist website decided to defend the shoe company. It posted on its site that New Balance was “making a gesture to support white people and to support US manufacturing.”
New Balance was swift to react, issuing the following statement: “New Balance does not tolerate bigotry or hate in any form. One of our officials was recently asked to comment on a trade policy that was taken out of context. As a 110-year-old company with five factories in the U.S. and thousands of employees worldwide from all races, genders, culture, and sexual orientations, New Balance is a values-driven organization and culture that believes in humanity, integrity, community and mutual respect for people around the world. We have been and always will be committed to manufacturing in the United States.”