October 22, 2013
Poor Paula Deen. Overnight, this past summer, she went from being America’s biscuit-buttering grandma to a perceived bigoted stereotype of the Old South and a bad businesswoman, to boot.
While the details of Deen’s personal politics played out in the legal system, the court of public opinion has ruled on her value as a brand ambassador and spokesperson. To date, 12 major corporate partners have parted ways with the culinary queen. Target, Sears, Home Depot, JC Penney, Novo Nordisk, QVC and the Food Network were some of the first to do so.
Despite the fact that Deen’s empire began to fall when her sworn deposition revealed that she had used racial pejoratives in the past, it is not the civil lawsuit or her legal issues that could bankrupt her. It is her deeply damaged reputation and poorly managed public relations that stand to ultimately cook Deen’s goose. (On Aug. 26, a federal judge approved a deal dismissing the lawsuit against Deen. On Aug. 12, the judge dismissed a portion of the lawsuit that contended a former employee was a victim of racial discrimination.)
Big and small corporations can learn some high-level operational lessons from Deen’s demise.
While CEOs and boards are placing higher value on reputation management and corporate communications, there are still a lot of executives who consider PR as the “soft-skill stuff” — at least until a factory blows up, a negative YouTube video goes viral or your celebrity spokesperson swears under oath to being a bigot. Ignoring the value placed on integrity, ethics and inclusion runs afoul of executives’ fiduciary responsibility to shareholders and the brand.
How you respond in a crisis is important, and it translates to real dollars and stakeholder value for both private and public companies. When reporters asked Food Network representatives why they had not renewed Deen’s contract, they cited her management’s clumsy handling of the publicity around the issue and not the issue itself as the reason.
There’s a big lesson here for company executives: They need to take the time to understand the value of the company’s reputation and the public’s power to impact their brand via social media and word-of-mouth. Proactive reputation management has to be an operations priority at the highest levels; it is not something that PR people can fix on the back end.
Deen waited until she had been lampooned on social media, skewered by daytime talk-show hosts and dropped by retail partners before she hired a crisis communications firm.
Business leaders would never dream of representing themselves in a legal matter, but shockingly, many of them attempt to represent themselves in the court of public opinion — a big mistake.
At the first sign of trouble, executives know to bring in legal counsel and give them full disclosure. The opposite tends to be true with communications counsel and reputation management. Often communications experts are brought in to “spin” things after significant damage has already been done to the brand or after the situation has already spiraled out of control.
The worst scenario is when communications experts don’t have the information they need to make the best diagnosis. Until communications counsel has a seat at the table when leaders are developing the crisis strategy, managers cripple their communications teams and run the risk of losing consumer confidence.
The Deen debacle is a perfect example of how a company may win a $1.2 million lawsuit by listening to attorneys but lose $16 million in endorsements and product deals by not following quality PR counsel. Deen recently hired famed crisis manager Judy Smith to help her pick up the pieces of her shattered image. Smith helped Asian governments effectively communicate the SARS pandemic; she also helped Michael Vick and Kobe Bryant navigate their way back to public acceptance and endorsement deals after public legal battles.
Yet even with a crisis specialist like Smith on retainer, the question is, Did Deen wait too long to hire a PR professional?
We live in a 24-hour news cycle fueled by social media and an engaged public. Time and again, executives with stellar credentials and storied careers make egregious PR gaffes, whether via divisive and hyperpolitical tweets or insensitive responses to live interviewers. The things executives say can change a company’s reputation, a person’s career options or even stock valuations. Just ask Tony Hayward, former BP chief, if he ever got his life back?
Senior leaders need crisis communications training every year. It is a skill few are born with, and it takes an expert to teach it. Companies hire spokespeople like the sugary-sweet Southern grandma to sell products because the public trust is so low. Business leaders need to learn from the Paula Deen fiasco that there isn’t a substitute for transparency and effective, authentic communication.
When there is a reputation or integrity crisis, there are some simple rules — even if the general counsel says not to say anything. Tell the truth. Tell it early. Tell it yourself. Tell us what you will do to fix it so that it does not happen again. Reputation management is not just about the media. (Although, another rule could be: Don’t pull a no-show on Matt Lauer.)
When company executives’ comments do not line up with what the company actually does, employees, customers, government agencies, community residents and activist groups are all impacted — or incensed.
Transparency and authenticity are so important because the truth is only a few mouse clicks away. The information age has closed the chapter on “corporate spin.” Deen’s sworn deposition was on the Internet, along with the full legal complaint filed against her.
An executive in that situation has to understand the legal ramifications against the impact of his or her statements on the public trust in the company’s brand and reputation. Without an informed, empowered senior communications counselor at the table to advise them, executives cannot make intelligent decisions.
The Deen debacle is a cautionary tale for executives. A leader cannot be truly effective if he or she does not communicate effectively. Seek strategic counsel at the first sign of trouble and listen to it. Consider all audiences when deciding how to communicate and what to say.
Finally, there isn’t any substitute for authenticity and transparency, because whether the truth comes out now or later, the court of public opinion rules swiftly and with an iron hand.