At one time, Paula Deen was the queen of food television. And then her reputation took a massive hit when she made racist remarks. Practically overnight, her entire empire crumbled and her show pulled from television. She recently bought the rights to all of her Food Network episodes and is launching an online television network, hoping to repair her name and brand.
Back in 2001, Arthur Andersen was one of the largest professional services firms in the world. That year its consulting division separated in a bitter divorce battle. Soon after, the Enron scandal brought to light questionable shredding activities on the part of some Andersen employees. This led to an obstruction-of-justice conviction which eventually led to the disappearance of the Arthur Andersen name. Just like Paula Deen, some past Partners are looking to relaunch the brand.
Years of hard work and success can disappear over night. With the snap of a finger. I’ve seen it happen over and over again. No one is immune.
It is inevitable that at some point, your reputation will take a hit. Even the best companies of the world run into challenges.
Apple is currently dealing with “bendgate” and a botched iOS 8.01 release. Although these are minor blips, they need to be handled correctly.
Remember the 1982 Tylenol scare? A number of people in the Chicago area were being poisoned by cyanide after taking Tylenol.
An incident like this could easily have brought down the brand. But Johnson & Johnson responded quickly. Even though they knew the poisonings were not directly their fault, they issued a nationwide recall of 31 million bottles of the analgesic from shelves, valued at over $100 million. They also used this to improve their packaging to prevent tampering in the future.
In the end, what could have been a PR nightmare led to a lot of positive coverage for their handling of the situation. It reinforced their reputation as the brand to trust.
Crises happen. It is nearly impossible to prevent them. How you address them will determine if your reputation is crushed or strengthened.
P.S. It should be pointed out (as was pointed out to me) that Paula Deen’s “empire” didn’t really crumble, it was only her mainstream TV show that vanished. Her books continued to sell well and she has launched successful restaurants and more.