He had been thinking about the underlying concept and collecting materials for over a year, to pen his book Brand Resilience – Managing Risk and Recovery in a High-Speed World, when an event hastened the process. Tiger Woods rammed his car into a fire hydrant (November 2009). While the golfing tiger's personal brand suffered greatly, so did other brands that had used him as a spokesperson or ambassador. In the month that followed his statement on taking leave from the game (December), seven publicly held companies associated with Woods collectively are said to have lost $12 billion in value.
“I thought, what would companies have done differently had they thought about the consequences of the fact that a celebrity spokesperson or ambassador could behave in a way that then tarnished the brand,” reflects Jonathan Copulsky, Global Chief Marketing Officer for Deloitte Consulting LLP (Strategy & Operations Practice), in conversation with BrandLine.
For this first-generation immigrant to the US, the second trigger was a friend, who spoke of war and insurgents and their unpredictable behaviour – where sometimes one doesn't even know who one is fighting. More research followed. The movie Battle of Algiers and the book Counter Insurgency Field Manual published by the US Army, added to the inspiration. The net result, as he says, is a book that takes lessons from real-life examples such as these, and adapts them for Chief Marketing Officers. Read on, for edited excerpts from the conversation on the book, risks, resilience, rewriting history, corporate responsibility and more.
Can we assign the loss of $12 billion to the Tiger Woods incident alone? What about other factors affecting the value of each of those seven companies?
Those numbers were arrived at independently by a Professor (Chris Knittel, University of California), based on stock market value after adjusting it for other incidents. We have been looking at other examples – about 30 of them – to see if there is a sustained impact on stock price. We have tried to adjust for other incidents, including what's happened to the sector (of the stock). We're seeing some correlation, but we're still investigating that further – to figure precisely how much is impacted by one incident and how much by other factors.
But the preliminary evidence says that for negative mentions which get amplified by social media, there seems to be a negative implication on share price.
That kind of puts to rest the notion that ‘any publicity is good publicity'…
If the reputation of the company is good already, and it has a good amount of trust among customers, sometimes even negative mentions can spur engagement among people. It also gives an opportunity for people to say positive things. I wouldn't say that all negative publicity is bad, but if the company is on shaky ground, then it can just make things worse.
In spaces like entertainment, depending on the need of the hour (like launch of a movie), sometimes, publicity that is not necessarily good works as well. Is it more applicable to individual or celebrity brands?
There was the case of Charlie Sheen – he misbehaved. He tried to use some of that for starting another show, starting a blog and other things. It turned out to be totally unsuccessful.
We've got other celebrities such as Kim Kardashian. In her case, it doesn't seem to matter what she does – she generates news, generates a following. I think it can be true for everybody as a brand, personal or corporate.
Does it work when the brand has a ‘bad boy' or rebel image?
Exactly. Also, we have this thing for rehabilitation. We love it when someone is down and they confess and then things get better and they come back.
You speak of sabotage – from within and outside the company, deliberate and inadvertent. While it may be possible to identify potential risk areas, is it possible to quantify each of them? We are currently in the process of doing research on each of those, to evaluate which tends to have the most adverse impact. Some of the measures we are looking at are employer loyalty, customer loyalty, market share and competition share.
One of the incidents we have mentioned in the book is the case of Audi. Years ago, it had a problem of acceleration, similar to what Toyota had more recently. It took Audi 15 years to get back to the same market share it had before the incidents were first reported.
We want to look specifically at cause, effect and impact; and how long the impact lasts. Today, as against 20 years ago, because of social media and the Internet, things (both positive and negative) linger.
In 1982, Johnson & Johnson which makes Tylenol, had this crisis … it is now a case study, used as the gold standard on how people should behave when they have such a problem. J&J didn't cause the crisis – someone else did. A year-and-a-half ago, Johnson & Johnson had some manufacturing problems with Tylenol. Many of the articles remembered how the brand behaved in 1982.
There is a view that with so many media options, including social media, public memory is shorter.
Yes. What I mean is that today you can go out and find that information. Whatever I put on my Facebook page or tweet about, someone could find it 20 years later. But to what extent do these things really persist?
I show pictures of people when I speak. One of them is Rebecca Brooks. She was in all the newspapers, all the TV shows – yet no one has any idea who she is (from the picture). And then I give them the name, and they still aren't sure who she is (in many places). They get it when I refer to News of the World and phone hacking. They remember. This is the case when I show them a picture of Tony Hayward – they don't recognise him from the picture, but when I say BP and oil spill …
But, if you want to find out about either of them, every detail is available for free, on the Web.
One of the key decisions a corporate executive needs to make is whether you just let things pass, whether you're better off not responding, or whether to jump in there with an aggressive response. That's a key decision for executives to make.
In the case of corporates, especially old-world companies trying to embrace change to be relevant in future, is there a need to – in a sense - let go of a part of their past?
What we advocate in the book and what I tell clients is that as painful as it is to look at the past by going back and systematically analysing it, doing that helps.
Take the case of the National Transportation Safety Board in the US. Every time there is some kind of public carrier accident, they investigate. Their purpose is to establish what caused the accident, and not to figure out who to blame. The record over the last 20 years shows a systematic decline of accidents and deaths. That's because of their ability to dig in and analyse without looking for blame.
My recommendation is that the past is a wonderful repository of insights if you take the time to analyse. To me, how BP handled the oil spill or how Tylenol handled the 1982 crisis are rich repositories for how to handle the next crisis that will come up. What was written even in the second century BC can still be relevant.
Is employer branding a bigger challenge today than consumer branding?
We hold the belief, based on research that we and others have done, that employer loyalty is a prerequisite for customer loyalty; employer advocacy is an enabler for customer advocacy.
What has changed is that younger people are more disinclined to be loyal than people may have been 30 years ago. We assumed back then that people would stay with the company for a while.
Expectations are going to move with technology change. We have done some surveys about the degree to which younger employees don't think that employers have the right to say what they can or can't say on social media. There's a clash in terms of values.
What has been the offtake of the Chief Risk Officer philosophy?
In the last five years, there are some sectors where it has been more prevalent, such as insurance, and also banks. It's less the case if you take FMCG or CPG companies. But we're seeing the role of Chief Risk Officer as a trend increasingly. Manufacturing businesses have tended not to have those; service businesses often don't. All that has been changing over the last five years. Social media has contributed to that because it's such an obvious source of risk.
It's a house divided on whether social media is more an opportunity or a risk. Your thoughts?
I believe it's much more of an opportunity than a risk. It's an opportunity for any number of organisations that have thoughtful social media policies. IBM has been one of the pioneers. Social media is a wonderful tool for engagement that didn't previously exist.
Everyone talks about being socially responsible as a business. Is there a level of distrust among consumers?
We talk a little bit (in the book) about social responsibility as a way to counteract negative impressions. Your point is that being socially responsible becomes almost a commodity when everyone becomes socially responsible (or claims to). Yes.
The second part of it is whether you are believable as a company when you say all that – or does that seem disingenuous? The key to all this is being authentic. But you don't get to decide if you are authentic – your consumers do. People outside the organisation must ratify the decisions that you have made.
What you must avoid is to be seen as ‘me too' movers in the space of social responsibility, seen as being done purely for the sake of business interests. You must first be genuine if consumers have to believe that you are authentic.
What about companies that are late to the party?
There are refresh cycles – which are pretty quick. Consumers look at history, but they also look at what you are doing today. So companies can also not rest on the laurels of what they have done before. If anything, that raises expectations. There is always a chance for people to jump into the fray.