Bulletin / Gaff or Crisis...

Gaff or Crisis

Author: Charlie Maclean-Bristol

This week Charlie looks at the importance of 'thinking before you speak', especially when your words can affect your organisation and its reputation.

The former Mayor of London, Ken Livingstone, was suspended from the Labour Party earlier this week for making anti-Semitic comments. It got me thinking about how the words of senior managers can have a major affect on their organisation and its reputation. Ken Livingstone’s comments have fed into a wider debate within the labour party on whether parts of the organisation are anti-Semitic. This has been further emphasised by revelations that some of its members, including the Labour Leader Jeremy Corbin, and Sadiq Khan, Labour candidate for the London Mayoral election, have in the past shared speaking platforms with an extreme Islamic organisation. At a time when the Labour Party wants to be talking about its manifesto for the council and mayoral elections, it is instead defending itself against a number of possibly damaging allegations. 

 Having done some research for this bulletin, I have found a multitude of material on the inappropriate or unfortunate comments made by CEOs which have had a major impact on the organisation’s reputation or have even led to the failure of the organisation. 

The most famous case was that of Gerald Ratner. Although Ratner’s jewellery shops were seen as cheap and a bit tacky they were popular with the public. In 1991 He made a speech to the Institute of directors where he said: 

“With six glasses on a silver-plated tray that your butler can serve you drinks on, all for £4.95. People say, "How can you sell this for such a low price?", I say, "because it's total cr*p.”

His speech was widely reported in the media which led to £500m being wiped off the value of his company and two years later the company was sold and he lost his job as the CEO. Once his speech was reported in the media, his customers didn’t want to be associated with the brand. Who wants to be seen to be going into a store which sells rubbish, as stated by the CEO? I think the Ratner’s case is a little bit of an extreme example but if your organisation either sells poor quality goods or is dishonest in their portrayal and is caught out, then customer confidence in your products can very quickly evaporate, having a massive impact on the organisation.

There have been a number of other CEOs, who through inappropriate comments have had an impact on their organisations brands and their personal reputation. Satya Nadella, chief executive of Microsoft, hit headlines in 2014 when he declared that instead of asking for a pay rise, female employees should rely on “karma” to provide the rewards they deserve. This was announced to an audience of women who had gathered to celebrate female accomplishment in technology! Often comments like this play into an already negative perception of a company and they seem to emphasise this perception. Microsoft has been criticised as being 70% male and 60% white, so Satya's comments seemed to be endorsing this view.

Tony Hayward’s well reported comments during the Deepwater Horizon oil spillage, played into the public perception that as CEO of BP, the company was far more concerned about itself than the people whose environment it was polluting and it further emphasised that that it was uncaring and incompetent - “There’s no one who wants this over more than I do. I would like my life back”.

The perception only began to change when there was a change of spokesperson from the British CEO, to a former American Admiral. So again, poorly chosen words by a CEO can deepen a crisis and play to existing negative perceptions.

Businesses who comment on sensitive issues such as gay marriage do so at their own peril and can cause a backlash against their products or company. There were protests against Chick-fil-A, a chain of southern American fast food restaurants, when the CEO Dan Cathy made comments which were seen as homophobic. It was also revealed at the same time in 2009 that the chain had donated millions of dollars to anti-gay groups. There was a major backlash against the company on the internet with boycotts, protests and even a campaign entitled “National Same-Sex Kiss Day at Chick-fil-A”. Chick-fil-A is known to be a company with strong Christian values but their comments on contentious issues has had a major affect on their brand.

As business continuity people we are not going to be able to stop our CEO’s making stupid comments. However, I think it is part of our role to quickly recognise which comments are likely to damage our brand or reputation and quickly invoke our crisis / strategic plans to manage the impact of the incident.

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