Success and Failures: How Brands Managed Their Cultural Risk
May 23, 2017 - By Chris Britton -Target is a great place to shop. I love going there, and I bet many of you do too.
But I also find the company fascinating because over the past few years it has provided huge debating points for those of us who make a living managing issues and crises.
Until United Airlines recently showed how to turn a crisis into a disaster and created learning points for years of lectures, Target’s handling of its 2013 data breach was the poster child for “what not to do in a crisis” workshops.
More recently, and a little less clear cut in terms of best practice, Target has been in the spotlight ever since it published a blog post in April 2016 welcoming transgender employees and customers to use the restrooms and fitting rooms corresponding to their gender identities.
While we all got obsessed by the United tragi-comedy over recent weeks, a couple of studies were published which suggested that the Target bathroom issue is the one we should examine most closely.
There is growing evidence that managing risk from cultural, social and political issues is the biggest emerging challenge for all kinds of organizations.
One of those recent studies was from The Institute for Crisis Management (ICM). It published its annual crisis report in which it tracks six hundred thousand crisis stories in the news worldwide.
Mismanagement (malpractice, misconduct, negligence, unethical practices and so on) was top of the charts accounting for nearly 30% of crises.
But look what was number two on the list with a bullet.
Discrimination stories skyrocketed to around 20%, with ICM’s report citing news articles involving Papa John’s pizza, the restaurant chain Noodles & Co and the North Carolina bathroom bill (which is when Target published its now infamous bathroom blog).
By comparison natural disasters accounted for just one per cent of crisis stories in 2016 – and stories about data breaches just five percent.
The second study published in April was from the thought leadership unit of the marketing agency McCann, ‘The Truth about America’.
McCann highlights how the rising political divisiveness in America and the sharp divide between liberals and conservatives deeply affects perceptions about values, institutions, brands, foreign countries, American symbols or news sources.
It is always a careful walk when brands and companies make judgment calls and get involved in issues around race, gender, nationality and politics – but never greater than right now in divided America.
Once you tear your eyes away from the United Airlines soap opera and become aware of the emerging risks to brands from issues such as gender, race, politics and polarizing social issues, you keep tripping over them everywhere.
Another example is Chick-fil-A whose culture is strongly influenced by its founder’s, Truitt Cathy, southern Baptist beliefs. This can range from hungry customers getting grumpy because the chain does not open on a Sunday to more strongly held opinions, on both sides of the issue, about the causes that Chick-fil-A has chosen to support in the past.
On the opposite spectrum, there was a fascinating moment in time in April. The 20th of that month is a ‘holiday’, a celebration of marijuana use, known as 4/20.
Brands with famously liberal leanings such as Ben & Jerrys and the Californian brewery Lagunitas went so far as to name products with overtones of drug culture (‘Half Baked’ ice cream, for example).
But getting involved in 4/20 created gyrations in what brands were prepared to say outright in public.
An article in the Washington Post reported Ben & Jerry’s statement on the topic of the ‘Half Baked’ ice cream, “We’re really known for our tongue-in-cheek humor but it’s pretty coincidental that it’s coming out on the 20th…That’s the official line.”
But don’t think you can avoid cultural risk by doing nothing. Consumers have taken that option off the table. Earlier this year, the marketing behemoth Unilever unveiled an international study that showed a third of consumers buy brands that can demonstrate a social and environmental impact.
In 2016, the BBMG agency identified a sector of the buying public it calls ‘Aspirationals,’ which it claimed represent 40 percent of the global public and are defined by their love of shopping, desire for responsible consumption, and their trust in brands to act in the best interest of society. So, damned if you do, damned if you don’t.
What does all this mean for you in your role as a defender of your organization’s reputation?
Take a look at your crisis planning.
How well does it equip you to manage these kinds of issues? How well would you respond in this type of crisis? What inputs and counsel can you call upon to overcome lurking cultural blindness?
When you access your plan on your crisis mobile app and you have to react at social media speed, you will want to know that these questions have been answered.