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How Companies Should Respond to Public Criticism

When should you course-correct if your company is getting hammered over its mistakes--and when should you stand your ground?
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"The thousand injuries of Fortunado I had borne as I best could, but when he ventured upon insult, I vowed revenge." --Edgar Allan Poe, "The Cask of Amontillado"

Poe's narrator endures his "thousand" injuries, only responding upon serious insult. But your company shouldn't wait that long to respond.

Consider the recent actions of Starbucks and SeaWorld. Recently, both companies announced changes in response to public criticism. But whereas Starbucks took its actions within 24 hours of the bad publicity, SeaWorld waited for the public criticism to impact its attendance levels -- and its stock price. 

Starbucks announced on Thursday that it would revise the way it sets schedules for its 130,000 baristas. That decision came as a direct and swift response to a New York Times story, which illustrated the toll that Starbucks' scheduling software took on the family, relationships and health of one of its workers, a single mother in San Diego. 

Had Starbucks not responded to the Times story, it would have risked seeming inconsistent about a core value of its culture: Treating employees like partners

As for SeaWorld, it announced it would upgrade the killer whale tanks at three locations at a cost of "several hundred million dollars," reports Tom Gara in the Wall Street Journal. This came roughly one year after the documentary Blackfish opened in theaters, raising public awareness of the criticisms of animal-rights activists.

The backlash from the movie drove many visitors away and raised big concerns among the company's investors. Attendance fell 4 percent in 2013; the price of SeaWorld's shares have been cut in half over the past 12 months. "The company acknowledges that the fallout of Blackfish--which it says is a work of propaganda--is hitting attendance," writes Gara. 

Had SeaWorld ignored the fallout of Blackfish, it would have risked accusations of hypocrisy about one of its core values: the rescue and rehabilitation of animals. The point here is not to criticize SeaWorld for making changes. The point is only that SeaWorld could have acted sooner in response to the Blackfish backlash. 

All of which brings me to the Washington Redskins. Despite the public outrage protesting the team's much-criticized name, billionaire owner Daniel Snyder staunchly refuses to change what many consider a racist and outdated moniker.

At first blush, Snyder's resistance seems baffling. Way back in 1994, St. John's University in Queens, NY, changed its team name from "Redmen" to "Red Storm." In 1997, the NBA's Washington-D.C. based team changed its name from "Bullets" to "Wizards." My former Inc. colleague Adam Vaccaro has long felt that "Washington FC" would be an exceptionally well-received and globally savvy rebranding of the Redskins. After all, "FC" is recognized around the world as the acronym for "Football Club." By using it, the Redskins would arguably transcend the NFL, signaling that they are part of the same international sports scene that includes powerhouse soccer franchises such as Arsenal FC, FC Barcelona, and Chelsea FC. 

So why hasn't Snyder done anything? He has stated that he considers the team name a term of honor and respect. NFL Commissioner Roger Goodell supports him. And yet, I ultimately suspect that Snyder's decision comes down to this: He's acting more like SeaWorld than he's acting like Starbucks. The public outrage is out there, but it hasn't yet hit the team where it hurts. While one report in the New York Times argues that the Redskins brand is losing equity over the name controversy, a recent Forbes ranking valued the Redskins franchise at $1.7 billion--making them the 9th most valuable sports team in the world. Snyder purchased the team for $750 million in 1999.

And here's the thing about football teams. Their top cultural considerations are winning games and making money. If Redskins players ever decided to walk out on the team in protest--or if a high-profile free agent ever spurned the team based on its controversial name--I believe it would go a long way toward shifting Snyder's perspective.

Likewise, if FedExField ever sat empty on national TV during a Sunday night contest, that, too, might change his mind. Until then, the Redskins will remain the Redskins. And Snyder will bear the insults as best he can. 

Last updated: Aug 15, 2014




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