Do you know Arthur Anderson? And no, we’re not talking about a person.
Back at the turn of the new millennium, Arthur Anderson was a corporate giant, and the “Big 4” of the accounting world were actually a “Big 5”. That all changed in 2002 with the coming of a public relations nightmare.
Arthur Anderson became embroiled in the accounting scandal of Enron, the Texan giant which had seemingly duped the world for years. AA voluntarily surrendered its auditing and accounting rights when it was found guilty of financial crimes due to the bookkeeping it did for Enron.
However, the case was overturned in 2005, and the Supreme Court of USA found that the company was not guilty after all. Arthur Anderson was free to practice again – but the damage was already done. No business in the world wanted to have their name associated with the company, and it turned to dust.
All that remains of its legacy is the consultancy and outsourcing arm of the business, which had (fortunately) split from the company back in 2000 over internal conflicts, and is today known as Accenture.
Arthur Anderson is a stark example of how legal assurances have scant value in the business world. What matters is a partner’s ability to inspire trust and confidence in the mind of other leaders and the common populace.
While AA is how public relations go wrong, there are several other companies that turned their worst PR nightmares into displays of leadership, grit and commitment, gaining adulation and admiration. Let’s explore some such cases that show stellar business strategy.
There’s No Beef Here – Taco Bell
In 2011, people’s beloved Tex-Mex chain Taco Bell was slapped with an audacious lawsuit. An Alabama company had filed a class action suit against the fast food corporation, claiming that its beef filling could not really be called beef, since it had only 33% meat, the rest being fillers such as oats.
The company’s reputation took an immediate hit. After all, who would want to buy food that claims to be something it is not?
Taco Bell’s response pulled out all stops. It issued an immediate and crystal-clear statement, assuring customers and legal authorities that it’s beef was 88% meat, and met all the standards imposed by USFDA.
Most companies would have then maintained a stony silence and would have waited for vindication at court, but not Taco Bell. It began to create an entire campaign around the issue.
Taco Bell’s president Greg Creed even went on record and divulged what the other 12% was composed off, hilariously giving out the ‘great secret’ of the company’s ground beef on video.
It similarly ran full page print ads that (passive-aggressively) stated ‘Thank you for suing us’, and went on to divulge the secret ingredients that Creed had listed on video.
The lawsuit was eventually dropped, and Taco Bell’s campaign received raving reviews, and a renewed interest in its food. Alongside, the company’s willingness to go so transparent so quickly was also applauded.
Steady In Crisis – Johnson & Johnson
Any individual who works in marketing or PR would have definitely studied the Johnson & Johnson PR management in the aftermath of the notorious Chicago Tylenol murders. For the uninitiated, here’s what went down.
In 1986, 7 people in the Chicago area lost their lives after taking Tylenol pills, which were subsequently found to be tampered and laced with cyanide. It was widely held that the bottles of the medication had been tampered with when they were placed on the store shelfs, but the damage to Johnson & Johnson, the medication’s producer, was massive.
Despite it, the company began a massive campaign to protect the general public.
It halted the production and advertisement of Tylenol, ran advertisements to warn people to not consume the pills, offered replacements to those who had brought the medication, and eventually, recalled millions of bottles of Tylenol from across America, even though only the Chicago area was found to be impacted.
The moves worked, and people continued to trust the company despite this grisly episode, and Tylenol once again became the preferred medication of millions.
Grace Under (Air) Pressure – Under Armour
In 2014, the Team USA speed skating team found themselves stumbling and fumbling their way to the finish line at the Winter Olympics at Sochi, a dismal performance in contrast to their previous track records. Murmurs began to arise that the team blamed their suits, designed by Under Armour and Lockheed Martin.
Instead of giving them the minimal resistance they needed, the suits allegedly contributed to poor aerodynamics. The company and its work as an Olympic equipment supplier was defended by many, including gold-winning athletes.
However, it was the response of VP Kevin Haley that deserved note. The company could have very easily stayed silent on the issue, and would have let the public assume that it was just an excuse given by the underperforming athletes.
Haley however said that while Under Armour’s suits were most likely not the issue, his company was willing to move ‘heaven and earth’ to improve the design if that’s what the athletes needed.
In one sweeping sentence, Haley reaffirmed the spirit of sportsmanship and partnership, distributing blame and accountability without throwing anybody under the bus. Its small moments like these that play an important role in good public relations.
Culture Matters – Starbucks
In 2018, two men were arrested after employees of a Starbucks chain had called cops on them. The men had not ordered anything, and the employees were getting suspicious. The truth of the matter was that the two were waiting for a friend to arrive.
Both the arrested men were African-American, and it was clear that their racial identity had influenced the employee’s decision. Many said (truthfully), that this would have never happened to a white person, and Starbucks had a public relations crisis in its hand.
Instead of dismissing the case as a rogue, racist employee, Starbucks CEO Kevin Johnson took accountability of the issue, and stated that this should have never happened on the company premises. Subsequently, the company shut down 8000 stores to train its employees in racial sensitivity.
Some saw it as a PR stunt designed to recoup good image, while others believed that it was a genuine effort by the company to change its culture. In any way, the fact that Starbucks’ top management acknowledged the issue and at least did something was a good step forward.
Staying in the Right – Nike
In 2016 NFL quarterback Colin Kaepernick kneeled during the national anthem to protest police brutality against black Americans. The move sparked intense debate, with millions both supporting and standing against the athlete.
Nike, a major sponsor of the NFL, then did something that few companies dare – they willingly plunged themselves into a public relations controversy.
Nike came out with a series of campaigns starring Kaepernick, highlighting racial discrimination in the country and how it impacted African Americans. Many began to burn their products, media proclaimed that it was the end of the brand, and companies began to look for alternatives to turn to.
But Nike held steadfast. It knew that the backlash was inevitable, even if it may not have realized the scale of it. The company stood its ground, knowing that morally, it was in the right.
Despite the initial dip, Nike recorded a 31% increase in sales in the aftermath. Not only had the company done what was right, it also showed that businesses could indeed take moral stances and not go under, sending a powerful message to those who stayed silent on issues that mattered.
Do these case studies inspire you? What other public relation nightmares were turned into opportunities in your view? And which companies do you think did not handle their case that effectively? Let us know in the comments below!