It’s been a year of big challenges for many companies, with an ongoing pandemic, labor shortages, supply-chain bottlenecks and record inflation. As if all this weren’t enough, some corporations added to their own afflictions with self-made crises caused by dreadful public-relations judgment.
1: Peloton’s “And Just Like That…” Imbroglio. After a year off my list, this repeat offender returns thanks to a dizzying succession of stupid and savvy PR decisions. First, a company representative said Peloton didn’t know Mr. Big would die after riding its bike when it gave permission for one of its instructors to appear in the sequel series to “Sex and the City.”
That was its first fatal mistake (pun intended). Its stock dropped 11.3%, to a 19-month low. Moral of the story: Insist on knowing storylines before agreeing to product placement or guest appearances.
Next came some smart moves: The company argued that the fictional Mr. Big’s lifestyle was to blame for his heart disease, and exercise likely prolonged his life. While it’s unfortunate that a lack of foresight left Peloton in the position of needing to make this self-serving argument in the first place, it was also accurate. Peloton quickly threw together an ad with actor Chris Noth (who played Mr. Big) along with the Peloton instructor, claiming “he’s alive.” Critics applauded. Its stock rose over 7%.
Then came the latest twist: Noth has been accused of sexual assault by two women (allegations he denies). Peloton pulled the ad. Next moral of the story: Conduct thorough background investigations on any potential staffers or partners before working with them. If this ad hadn’t been pulled together in such a rush, it’s possible the company could have sussed out these potential problems — though investigations are never, of course, foolproof.
Another shrewd decision: Peloton promptly pulled the ad. The company deserves plaudits for responding — by both releasing and recalling the ad — in the “golden hour” of crisis response. Just as someone having a heart attack is more likely to survive if they get to the hospital within an hour, organizations have to respond speedily to crises in order to survive with their reputations intact.
But the even savvier approach is to avoid creating them in the first place.
2: Morgan Stanley chief executive James Gorman’s veiled threat to employees in June, saying “we’ll have a different kind of conversation” if they weren’t back in the office by Labor Day. Gorman did say that the policy wouldn’t be “dictatorial” and that staffers could do some work from home. And to his credit, he now acknowledges he was wrong about the pandemic. “I thought we would have been out of it past Labor Day, and we’re not,” he said earlier this month.
The first lesson (which should have been obvious even in June) is that the coronavirus isn’t predictable. But that’s not the only thing Gorman was wrong about. Amid the Great Resignation, as workers quit their jobs en masse and search for better work-life balance, burnishing a reputation as an inflexible, insensitive employer is a surefire means of scaring talent away.
3: Better.com chief executive Vishal Garg’s widely reported Zoom call firing 900 staffers all at once. Lesson: Word of how companies treat their staffers gets around quickly. After communicating this decision so tactlessly, Better.com is unlikely to be able to successfully recruit top talent when it needs to hire again. (The company now says Garg is “taking time off.”)
4: Tesla and SpaceX chief executive Elon Musk calling Senator Elizabeth Warren “Senator Karen” in a dispute over taxes. This leader — who, as I’ve said, didn’t have an ego in need of stroking when he was designated Time’s “Person of the Year” earlier this month — clearly feels emboldened by all the attention. But cultivating a reputation as a troll rather than as a trustworthy leader stands to backfire on Musk in the future when lawmakers take up inevitable big questions about legislating driverless vehicles and space travel.
5: The addition of Linda Chorney to the list of Grammy nominees after the nominees were officially announced. Although the National Academy of Recording Arts and Sciences is a nonprofit organization, I’m sneaking this snafu onto my list because its members are big players in the industry. After the academy received questions about Chorney’s exclusion, it claimed the indie singer and songwriter wasn’t added to the list until her nomination was cleared under an audit performed by Deloitte.
A few lessons to other organizations: Get your facts straight before making announcements and anticipate eminently foreseeable controversies like this one before creating them. It’s also extraordinary that executives still need to be reminded to include members of underrepresented groups like independent artists in everything they do. (In 2012, Chorney was accused of “gaming the system” by promoting herself to people who voted for nominees, even though she didn’t break any rules. But how else is an independent artist supposed to gain recognition?)
After years of writing these lists, one thing is clear: Companies are great at creating their own public-relations problems. In fact, when I created a new online public-relations graduate program at Hofstra University last year, I included a mandatory concentration in reputation and crisis management because I’ve come to believe the most important skill PR executives can learn is how to protect their organizations from self-inflicted harm. Here’s hoping some of these lessons sink in before next year’s column.
More from other writers at Bloomberg Opinion:
• The Five Worst PR Disasters of 2020: Kara Alaimo
• What We Learned From 2019’s Worst PR Disasters: Kara Alaimo
• The Top 5 Biggest Corporate PR Disasters of 2018: Kara Alaimo
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
Kara Alaimo is an associate professor of public relations at Hofstra University and author of “Pitch, Tweet, or Engage on the Street: How to Practice Global Public Relations and Strategic Communication.” She previously served in the Obama administration.
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