(The last few weeks have been eventful in the realm of public corporate debacles and foot-in-mouth disease. This article from last week got some good commentary on the HBR site, much of it about whether business schools are teaching people to be ethical and humane. In this piece I look at Pepsi and United, but to be clear, these situations are very different in intention and speed of response to a public problem. What connects them in my mind is primarily about the three themes in this article — speed of transparency, expectations of customers and the world, and internal culture.)
United Airlines has leapt into a brand disaster of mythic proportions. In a
scandal that’s still evolving quickly, the company’s employees had Chicago
Department of Aviation officers
forcefully remove
a passenger — a paying customer sitting in his seat — from an overbooked
flight. Around the world, people watched a video of the bloodied man being
dragged down the aisle. The company’s stock
lost hundreds of millions of market cap
, but the damage to the brand (and future sales) may be far higher.
The incident, along with some other recent brand missteps, highlight some
basic realities about the world companies operate in today. Three themes
seem critical.
1. The speed of shame is as fast (and as ruthless) as the internet. When will
companies realize that everyone now has a video camera on them,
and that they can broadcast live on Facebook within minutes? People can now
destroy brand trust at the speed of light, with consequences that are
far-reaching. For example, in China, a critical growth market for the
airlines, the disturbing passenger-shot video story has gone super-viral
(likely in part because the passenger manhandled by United was Asian). It
was the
number one topic on Weibo
, China’s version of Twitter, with 100 million views. And while it’s way
too early to predict the financial damage in that country or more broadly,
the brand will likely keep taking hits for a while — other stories about
being mistreated by United are getting airtime and countless people are
pledging to stop flying United.
Yet United is far from the only company to experience instantaneous
negative reactions recently. Last week, PepsiCo ran — and then quickly
pulled — an advertisement
showing the model Kendall Jenner breaking through a line of protesters (who
looked more like they were at a dance party) to hand a Pepsi to a police
officer. Jenner’s offering of 12-ounces of peace and love seemingly solves
all of society’s tensions. The backlash, especially from those who saw a
jarringly off-note take on Black Lives Matter protests, was justified — and
unbelievably fast. Has there ever been a major ad that debuted and was
pulled in less than 24 hours?
In both cases, word spread partly though
dark humor, which raced around
Twitter, Facebook, and newscasts, including a map of a United plane with a
section labeled “Fight Club.” And Saturday Night Live’s brilliant take on
Pepsi captured the essence of what was likely a well-intentioned effort.
SNL gave us
an imagined conversation
between the ad’s creator and his family (unseen on the other end of a phone
call, like an old-school Bob Newhart routine). His dawning realization that
he’s made a big mistake is comedy gold. Humor plays a big role in stories
going viral and, in cases like these, it may help people cope with
upsetting images. But it doesn’t do the brands any favors.
2. Everyone expects an apology —
and a real one. Pepsi got this right.
The company acted quickly and owned the error
. As a spokesperson said, “Pepsi was trying to project a global message of
unity, peace, and understanding. Clearly, we missed the mark, and we
apologize.”
United, on the other hand, has had a rough couple of days. The
first statement
from Oscar Munoz, the United CEO, was just bizarre, focusing on his
employees while also using an awful euphemism for violently pulling someone
off a plane: “This is an upsetting event to all of us here at United. I
apologize for having to re-accommodate these customers.”
What’s different today is that everyone can feel personally
engaged in what your company does to anyone. In Munoz’ first
statement, he went on to say, “we are reaching out to this passenger to
talk directly to him and resolve this situation.” That’s fine, but CEOs
today need to “reach out” to the public, too. At the very least every
passenger on that plane deserves some direct contact, but now millions of
others want an explanation as well. In our social media dominated world,
everybody has an opinion and feels like they’re owed something.
Munoz tried to make up for his first statement with
numerous public apologies since
— and they’re much better – but the reality is that the first one sticks
and is a very public window into your company’s priorities and soul.
3. Employees must feel safe and empowered to speak up. The biggest question I
(and many others) have about these recent brand disasters is this: Why
didn’t anyone in these companies say something before things got out of
hand? At Pepsi, there must have been employees – in the marketing meetings,
on the set, or even in the ad agency – who felt like the unseen family
members in the SNL skit. Many knew the ad was tone-deaf. If they
believed they were expected to go beyond following rules and maximizing
performance, United employees would have stepped in to de-escalate the
situation once they realized something was going horribly wrong on that
flight.
Of course, intentions do matter. In Pepsi’s case, the ad was likely
well-meaning, so chastised execs and the brand will probably recover.
United is in a radically different situation. As with the
Wells Fargo
and
VW scandals
before it, the problem here is a systematic set of expectations and rules,
set from the top, that lead to very bad (and now public) behavior.
Companies need to think carefully about their policies and their crisis
communications, so they can quickly move from a defensive crouch to honest,
heart-felt apologies — and to real changes in how they operate. But most
importantly, they need to assess whether their cultures
allow their own employees the power and safety
to stand in front of the train of fast-moving stupidity and say, “You shall
not pass!” And they need to have executives who will listen to them.
The big takeaway here is that expectations about how companies operate —
and their very role in society — are rising fast. Pepsi clearly had some
inkling of this; just think about why the company wanted to say
something about justice and understanding, even if it did it poorly. United
(and its airline peers) had better wake up fast to this new reality as
well.
All companies now operate in a world that’s closely watching their
policies, actions, and how they handle themselves when things go wrong.
When literally anyone can simultaneously act as a customer, a protester, a
critic, and a muckraking reporter with a video camera, executives have zero
room for error.
(This post first appeared in Harvard Business Review.
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