Tag Archives: damaged reputation

Crisis Management, Reputation Case Study, , , , , , , , , , ,

As NBC News’ Allison Linn says, the new plane is “receiving plenty of attention lately — but it’s not at all the kind of buzz the aircraft maker had been hoping for with an aircraft that carries such high hopes it was dubbed the ‘Dreamliner.’”

In an article highlighting similar problems with aircrafts historically, BBC News’ Rob Corp notes that, while their seriousness and impact can vary, such issues “can have a detrimental effect on an airliner’s popularity, reputation and sales.” A New York Times article on the 787’s issues echoes that perspective: “While problems are common with early models — including with the first Airbus A380, the Boeing 777 or even the first 747s — analysts say the issue could become a growing embarrassment for Boeing if travelers or airlines begin to lose confidence in the plane.” The company needs to move fast to solve these problems. According to The Wall Street Journal, the 787 and other Boeing models have already experienced “lengthy delays that have damaged Boeing’s credibility.”

Reputation Restored…

Under W. James McNerney Jr., who became CEO in 2006, Boeing has spent recent years improving the company’s reputation following a period of misconduct that “marked an all-time low for the company,” according to Businessweek. In addition to smart moves like “encouraging managers to talk more openly about Boeing’s severe ethical lapses,” McNerney was responsible for Boeing doing the “right thing” when it came to closely watched tax decision. McNerney’s work has earned the company the #30 spot on Fortune’s list of the World’s Most Admired Companies.

…But Experiencing Turbulence

While history suggests that Boeing will weather this crisis, today’s media environment makes things less certain. A video of smoke coming from a 787 in Japan, for example, has been broadcast widely. “Welcome to the era of social media, Boeing,” aerospace consultant Michel Merluzeau told the Times. “That sort of thing is going to be seen by millions of people.” While Boeing has wisely responded to the issues via social media, if the company can quickly resolve the 787’s problems, they may be forgotten just as fast. “Two years from now, no one will remember this,” Airfarewatchdog.com’s George Hobica says in another LA Times piece. “People still rode on ocean liners after the Titanic sank.

 
 
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Papa Johns

Since founding Papa John’s in the back of his father’s bar in 1984, John Schnatter has built his business into a leading international pizza delivery chain. Its reputation for customer service, quality and value has fueled that growth and distinguished it from competitors like Domino’s and Pizza Hut.

Papa John’s has deftly built and maintained that reputation, but recently there have been challenges. The first challenge occurred earlier this year, when a racial slur on a receipt at Harlem Papa John’s went viral.  Papa John’s quickly stepped in to protect its image. Just a day after the offensive receipt appeared online, the chain took to Twitter and Facebook to apologize and announce that the employee responsible had been fired.

Politics and Pizza

The pizza chain has been less successful in its response to the more complex controversy surrounding Schnatter’s own comments about the Affordable Care Act. Discussing his view of the health care law over the summer and after the presidential election, Schnatter drew extensive media coverage and triggered both positive and negative reactions on social media. He attempted to clarify what he had said in a Huffington Post blog post, but his explanation doesn’t appear to have succeeded in swaying public perception or distancing the Papa John’s brand from such a heated political issue. A recent YouGov BrandIndex report found that the controversy has negatively impacted the chain’s reputation. Chicago journalist Edward McClelland may have said it best: “Everyone eats pizza. And when you’re trying to sell a product to everyone, it’s not smart to alienate the 51 percent who voted for a winning presidential candidate.”

Papa John’s doesn’t need to look further than its own recent successes for a strategy that might help repair its reputation. In 2008, after drawing ire and boycott threats from Cleveland Cavaliers fans for t-shirts that insulted NBA star LeBron James, Papa John’s made up for it by selling pizzas to Cleveland residents for just 23 cents and donating to the Cavaliers Youth Fund. That approach earned the chain one of PRSA’s Silver Anvil Awards for Crisis Communications. Americans may clash when it comes to sports teams and politics, but, to borrow from the quote above, everyone eats pizza.

 
 
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Though some hedge fund founders have cultivated rock star status in recent years, most follow a conservative approach regarding their public profiles.

The most highly respected hedge funds often are run by the most low-profile founders. John Paulson, perhaps the most low-key, made a rare public appearance recently when his family’s foundation announced a $100 million donation to Central Park.

A common hedge fund issue

A common reputational issue that many funds encounter is the investor lawsuit.  Even the most well-respected funds face them. One such filing can rank high on a Google search of a company’s name for years, even if it is the only such instance in a long history of good standing.

In many situations the content becomes prominent on the Internet because there is so little online information about the company. (The less information that is online about a topic, the higher new information about it will rise and the longer it will stay high on searches.)

Hedge funds facing such issues have more freedom now to publish a broader range of marketing and other online information than they have in the past.  Consistently publishing new online content is a fundamental aspect of online reputation management. Rebranding can’t confer trust capital or restore a tarnished reputation, but it can re-establish and help rebuild a company’s image. It can also signal a new direction…and sometimes that is a good tactic.

 
 
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Schwarzenegger’s Campaign to Repair His Image

Arnold Schwarzenegger has undertaken a campaign to restore his public image. The central issue the campaign is addressing—and needs to address of course—is last year’s infidelity. Schwarzenegger seems to be taking the best approach to that problem: owning it.

The release of his new memoir, Total Recall: My Unbelievably True Life Story, suggests the sort of confession and personal reflection that is needed. But in a host of negative reviews the media has judged that attempt unsatisfactory. It “fails to achieve either the depth or the emotional impact that would make us care more deeply about this fascinating public figure,” according to the Washington Post’s Vernon Loeb.

The Toronto Sun offers some excellent advice on how he could have crafted a more effective memoir.

Schwarzenegger’s reputation rehabilitation plan has fared better with the recent launch of his own eponymous political think tank at USC, a move that has helped rebrand him as “a global policy wonk and statesman dedicated to leading America into what he calls a new post-partisan era,” according to the Associated Press’ John Rogers. The American Psychological Association’s Dr. Bernard Luskin explains the relative success of this branch of his strategy to The Christian Science Monitor’s Gloria Goodale: “Arnold will persist with the same aggressive ruthlessness that he has demonstrated with the other obsessive passions in his life,” the American Psychological Association’s Dr. Bernard Luskin tells Ms. Goodale.

Arnold’s Future

There is no broad consensus on how effective Schwarzenegger’s efforts will finally be, but experts tell the Monitor that his comeback could succeed, but it probably won’t restore him to his previous stature. “The public may be willing to forget to some degree but will not forgive—so much as accept—as he attempts to remake himself,” says the APA’s Luskin. Echoing that sentiment, University of Texas, Arlington’s Ben Agger imagines that the former California governor “well be publicly redeemed if he seeks, not elective office, but talk-show host.”

Luskin and other analysts have likened him to Bill Clinton, but Schwarzenegger will need to recognize his own unique strengths and weaknesses to fulfill his goal. A Business Insider article by USC marketing professor Ira Kalb provides a great breakdown of the characteristics and history of his public image. He deftly protected his reputation against previous allegations, Kalb acknowledges, but last year’s scandal dealt it a major blow. “Time will tell if he is successful repairing his image,” Kalb says. “His admissions and apologies are two steps in the right direction, but this is the third time he has employed this approach in public, and it may take more time and a more aggressive charm offensive to pull it off on this go-round.” Schwarzenegger certainly doesn’t lack aggressiveness, but he’ll need the perfect balance of charm to win back the public’s trust and respect.

 
 
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Though the uproar over replacement referees actually boosted television ratings, the swift end to the NFL referee lockout last week demonstrated how important integrity and quality is to the league and its millions of fans.

NFL commissioner Roger Goodell was at the center of the controversy, not only because he is the “most powerful man in sports,” but also because he has “made protecting certain aspects of the sport’s good name his consuming aim,” according to the New York Times’ Judy Battista. Elevating the league’s standards both on and off the field with moves like a strict personal conduct policy and heavy punishments for New Orleans’ ‘Bountygate,’ Goodell has bolstered the NFL’s excellent brand and helped it become “America’s premier sports league by sheer entertainment value, a demand for perfection, and a hard-earned reputation for integrity,” according to the Christian Science Monitor’s Patrik Jonsson.

Controversy showed the importance of referees to NFL’s integrity

The lockout controversy showed how important the referees are to that integrity – and how undervalued they had been from that standpoint. Washington Post columnist Sally Jenkins offers a fascinating account of how officiating has been an integral part of American football since its beginnings, distinguishing it from the traditional “honor code” of British rugby. Given its fundamental role in the sport, its not surprising that less skilled officiating had a significant impact on the level of play.

Goodell and the NFL were criticized for coasting along on fan loyalty and replacements until they could negotiate a better contract with the referees. They didn’t appear to realize that loyalty is based on certain expectations, among them quality officiating. “For the NFL to lack integrity based on the replacement officials quickly became a big problem for them, because people expect perfection and the product to be seamless,” USC Sports Business Institute David Carter told the Alaska Dispatch. The regular officials sometimes make bad calls, too, but “the difference in those cases was that fans, players and coaches knew it was a mistake and did not think that the league had allowed incompetence to determine games in the name of a more favorable business deal,” according to the Times’ Battista.

Fan outrage & endangered NFL reputation was the turning point

The turning point was the controversial ending to last Monday’s Seahawks-Packers game, which sparked widespread outrage that registered on social media, in an ESPN fan poll, and even reached the White House, with President Obama calling the game-deciding call “terrible.” With its reputation clearly in danger, the NFL and the referees quickly returned to the negotiating table and hammered out a compromise. “No matter how money-driven fans think Roger Goodell and the owners are, they are human beings,” writes ESPN’s Darren Rovell. “They do have pride in what they do.”

Both sides were hoping that they would emerge from the lockout with the best deal, but it looks like each ended up putting their sport’s reputation ahead of getting exactly what they wanted. The deal showed that the NFL “is willing to share its prodigious wealth to protect the reputation of the game,” according to the Washington Post’s Tracee Hamilton, but she also highlights the referees’ agreement to let the league hire additional officials and fire underperforming ones. “This was a concession by the union, and an important one,” Hamilton says. “If the league wants to protect its image, and the officials want to be regarded as an integral part of the NFL, they have to be held to a high standard.” Goodell defended the league’s decisions in a letter to fans, but he also acknowledged that the lockout’s damage would require mending. “We always are going to have to work harder to make sure we get people’s trust and confidence in us,” he said.

 
 
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FareedFareed Zakaria rose quickly into the rarefied strata of the prominent public intellectual after he authored a Newsweek cover story (“Why They Hate Us”) on the 9/11 attacks. He’s an extraordinarily prolific writer, hosts a television program, and makes frequent public appearances.

As reported by The New York Times, he recently experienced a reputational crisis after several paragraphs in one of his columns for Time magazine featured several paragraphs that were almost identical to a New Yorker article.

The incident was judged a one-time event—a mistake from an over-committed writer—after several publications undertook a thorough review of his past work.

Mr. Zakaria has since cut back on engagements. It is worth emphasizing the lesson he gives us—expanding your brand across platforms offers visibility, but it is important that all material reflects your values.

 
 
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A recent New York Times article on Lawrence, Massachusetts’ quest for a better reputation offers a great example of how a concerted effort to forge a better image can have a real impact on a community.

With years of high crime and unemployment as well as lackluster education and local government, Lawrence’s image has suffered so much that Boston Magazine recently called it “the most godforsaken place in Massachusetts.” Spurred by such harsh words, a group of citizens launched We Are Lawrence, a campaign to reshape the city’s reputation. Acknowledging that they “cannot put more officers on the streets,” We Are Lawrence opted instead for “small steps that might revitalize the city, fostering pride and economic development by highlighting its robust history.”

Changing the Narrative

The campaign is only a few months old, and Lawrence’s problems won’t be easily fixed, but there have already been some signs of improvement. The Times describes how “cash mobs” are highlighting and supporting local independent businesses, and Lawrence CommunityWorks, one of the nonprofits involved in We Are Lawrence, was recently awarded state funds to build new affordable housing. The local Habitat for Humanity has also been at work on a number of projects in the city, including building one house in less than a week. “This is about changing the narrative, empowering people to celebrate and encouraging them to work together on the challenges,” Lawrence CommunityWorks’ Maggie Super Church told the Times.

In 2010, the city of Juárez, Mexico, which has been plagued by drug cartel violence, implemented a likeminded strategy with Cronicas de Heroes, an MIT-supported website that shares “stories about ordinary people committing random acts of kindness, bravery and care” in the city. While Juárez’s problems certainly haven’t disappeared, the murder rate has dropped and a new sense of community has begun to emerge. The border city is now literally “back on the map” distributed by the visitors bureau of neighboring El Paso, Texas, which had neglected to include Juárez in recent years.

Highlighting the Positive

Other cities like Branson, Missouri have enacted similar approaches aimed at restoring their damaged images.  In Branson, which was devastated by a tornado in February and relies heavily on tourism, local businesses have taken to social media, combatting the ubiquitous images of destruction presented in the media with ones highlighting their rapid rebuilding efforts.

A city can’t wish its problems away, but working to incorporate more positive aspects into its image can go a long way. It has the potential not only to improve a locality’s overall reputation, but also to inspire local pride and community involvement.