When Company Leaders Go Astray
It's the latest installment of CEOs Gone Wild.
John McAfee, founder of a leading anti-virus software company that still bears his name, went off the compound--literally--causing a maelstrom of bad press as he eluded police. Now he awaits potential extradition to Belize to face charges for allegedly killing his next door neighbor.
Lance Armstrong resigned from his Livestrong foundation, created to raise funds for cancer research, as he faced charges in a widespread doping scandal that has cost him his medals and his corporate sponsorships.
Then there are the sexual indiscretions of Tiger Woods, Gary Friedman of Restoration Hardware, Brian Dunn of Best Buy. The list goes on and on and on.
For smaller companies, the new rules of marketing center around reach, relationships and "thought leadership." Companies are encouraged to take employees and leaders who were once hidden behind the company brand and put them out in front to carry the company's message forward. They become, in essence, personifications of the brand.
So what should you do if the person that represents the company no longer "represents" the company? As we move forward into a world of executive-driven thought leadership, situations like that of John McAfee will become more likely. Planning wisely for this potential outcome and reacting appropriately will help protect your company and brand's public equity. Here are some steps to take:
Identify the impact.
The good news is that most of the examples of bad behavior come from individuals' personal lives and have nothing to do with the company or what it does. This is probably why John McAfee's namesake company appears to be staying out of the current controversy: He is their founder, but he's not relevant to the day-to-day operations of the company.
Today's consumers know the difference. They understand that what the company does, unless highly reliant on an individual (think Bernie Madoff), is different from the person that founded the company or is delivering the external message.
Consumers are far more likely to impugn a brand or company for actions directly related to the brand than they are for an individual's personal life choices. Recent examples include Chick-fil-A for its stated company-wide stance on same sex marriage, BP for the oil catastrophe in the Gulf and American Apparel for using Hurricane Sandy to promote sales. Although an individual within the company likely caused the issue, the company suffered the public backlash.
Handle the problem quickly.
Don't let the problem fester and don't stick around to see how it plays out. If the impact is detrimental, distance yourself quickly and move on to more positive news and actions. Tiger Woods's and Lance Armstrong's major corporate sponsors bolted quickly after their indiscretions went public.
Take a deep breath: Celebrity no longer matters (as much).
At least not directly. Today's consumer is not buying products or using a service because a celebrity is doing so. Having a celebrity endorse or associate with a brand is more about awareness and access to their network or influence than it is about actual product endorsement.
In fact, celebrities or spokespersons making mistakes or behaving badly can actually garner more attention than originally planned. Take for example Oprah Winfrey's tweet promoting the new Windows 8 tablet--sent from her iPad. Many people, myself included, were only aware of that endorsement because of the controversy.
Make sure you have multiple representatives.
If you are a smaller organization, make sure that you have multiple people representing your brand in thought leadership roles and externally-facing positions. That way if there are issues with a single individual, even at the top, you haven't lost all of your brand equity.
This strategy also safeguards you from losing your thought leader to a competitor or another industry, which is far more likely than having to deal with an self-implosion or a scandal.
Realize it's what the world expects.
It's sad, but true: We expect the worst of our celebrities and leaders. Life is messy and we love to see people falter just as much as we love to see them built up. (Watched any reality TV lately?) It makes them human and approachable.
In fact, aligning with a "second act" representative could even be a smart idea. Just look at the second careers enjoyed by the likes of William Shatner, Martha Stewart and David Hasselhoff.
ERIC V. HOLTZCLAW is a serial entrepreneur who has founded multiple startup companies, including one of the first profitable Internet enterprises. His last company appeared on the Inc. 5000 three years in a row. Holtzclaw advises clients on the whys of business--why customers buy, why teams work, and the all-important "entrepreneurial" why. He is the author of Laddering, and his weekly radio show, The "Better You" Project, shines a spotlight on entrepreneurs' individual business journeys and successes. To learn more about Holtzclaw, visit ladderingworks.com or e-mail email@example.com.
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