Hindsight is always 20/20, particularly when it comes to crisis management. There’s plenty of raw material; just look at some of the widely covered incidents that have threatened brand reputations over the past two months. Yet, textbook crisis management successes (and failures) aren’t always what they seem. Here’s my take on some recent examples of crisis handling by top brands.
Crisis Management: The Lululemon Yoga Pants Recall
For sheer, on-the-spot crisis management skill, Lululemon wins, hands down. PR experts saw the voluntary recall of its (unintentionally) see-through yoga pants as a ”lemons to lemonade” case. And it’s true that the brand’s agile moves gave new meaning to the word ”transparency.”
In fact, Lululemon seemed to bend over backwards to be proactive and minimize the inconvenience to customers. It communicated the recall, its rationale, and the timeline of events proactively to press, analysts, and its customer base. It promised refunds or exchanges for defective pants bought after March 1 and pledged to improve quality by dedicating employees to work with vendors, tightening production specs, and posting its own staff at partner factories.
However, a closer look shows the seams. Lululemon’s key supplier publicly denied that anyone from the company had even been in touch. At best, that means supply chain communications weren’t aligned.
Worse, product loyalists saw CEO Christine Day’s explanation of the fabric issue as…well, a stretch. Hardcore lulu-lovers have complained of quality problems for months. Negative posts on some yoga boards are packed in tighter than a morning bikram (yoga) class, signaling deeper problems for a brand whose health depends on its cult-like community of fans.
“Pants-gate” was costly for Lululemon’s stock price and for its former product chief, who resigned as a result. The verdict? Sound strategy and good journalist relations are one thing, but Lululemon has more work to do to get back in shape.
Crisis Management: Carnival Cruise Lines
“Is Carnival haunted?” asks one PR community commenter. It’s a fair question.
First there was the Costa Concordia disaster in which thirty-two passengers perished, the captain abandoned ship against orders, and the company’s reputation—and stock price—hit choppy waters. And there’s been a flood of incidents since then. In February, Carnival experienced another PR shipwreck when a fire disabled the Triumph, stranding travelers amidst food shortages and overflowing toilets for five long days. That’s years in crisis management time. To make matters worse, billionaire owner Mickey Arison was photographed court side at a Miami Heat game as #cruisefromhell was trending on Twitter and vacationers were posting updates of the nasty shipboard spectacle.
Bad optics for sure. But this time, Carnival did try to steer its reputation back to normal. It was proactive with communications, issuing consistent updates on the shipboard situation through a specially created web page and its social media channels. It promptly made amends to passengers, issuing full credits and offering $500 towards a future voyage.
Carnival should have worked harder to explain why an at sea rescue was impractical and dangerous—a fact lost on most passengers and press. And I question the decision to drop-ship the CEO onboard—an admirable intention, perhaps, but one that failed to calm the rough seas because it exposed him to passenger ire without offering real solutions to the mess.
Some would say its reputation is sunk, but for me, that ship hasn’t sailed. Carnival is a huge family of brands and it has learned from past mistakes. But it needs to do all it can to ensure a steady course for the coming high season.
Crisis Management: Rutgers University
The Rutgers basketball crisis is only just beginning, but, so far, the university’s handling has been a losing proposition. Yet as the scandal widens into an FBI investigation, one relevant issue for communicators goes back to Rutgers’ own internal review into the behavior of former basketball coach Mike Rice and the decisions made as a result.
Allegations by a whistle-blower that Rice kicked, shoved, and verbally abused players triggered the inquiry which was conducted by key legal players late last year. But the investigation focused almost wholly on the legal issues, chiefly whether Rice’s conduct constituted a “hostile work environment.” The conclusion? It did not. So, Rutgers followed its lawyers’ counsel and dealt with Rice’s behavior with suspension and anger management counseling. Apparently it didn’t consult with PR or reputation specialists. Rutgers Athletic Director and its HR head completely missed the ramifications beyond the basketball court and the legal courtroom.
Five months later, all hell broke loose when the video exploded in the court of public opinion. In hindsight, it looks like a rookie reputation management error and a very costly failure to anticipate two things: the inevitability of the video’s release, and its powerful influence in today’s digital environment.