The PR Losers Of 2019

Who had the worst PR of 2019? Yes, it’s that time of year when we evaluate the mistakes, stumbles and train wrecks of public reputation over the past 12 months. There’s lots to choose from, including fresh blunders by the usual suspects like Uber and Facebook. But for this post we’re focusing on truly terrible reputation reversals compounded by poor handling. Below is my list for the year’s worst.

Boeing’s reputation disaster

“If it ain’t Boeing, I ain’t going,” was how one pilot summed up the company’s onetime reputation among his peers. Of course, that was before 2019, when we learned that design flaws in Boeing’s 737 Max contributed to two fatal air crashes. What’s more, the company’s handling of the tragedies also crashed its credibility. A government task force faulted Boeing for failing to adequately educate pilots on its automated safety system known as MCAS. Later reports revealed that Boeing rejected a safety system that might have mitigated the problems for cost reasons.

The airliner’s issues would have been a serious business problem for Boeing in any case, but its communications with regulators, stakeholders and the public worsened the impact. Rather than grounding the jet until the accidents were investigated, Boeing insisted the Max was safe. Its CEO reportedly lobbied the president to keep it flying, which was a particularly bad look given the $1 million the company donated to the inauguration. As more information came out, it seemed clear that Boeing had simply put profits ahead of safety.

Boeing also seemed to de-prioritize the flying public in its response. This happens with B2B companies whose customers and stakeholders are other businesses and governmental organizations, not consumers. But there’s no excuse. This week Boeing CEO Dennis Mullenberg was pushed out, the Max is still grounded, and so is Boeing’s reputation.

Tech unicorns stumble

Led by the dramatic meltdown of WeWork just weeks before a planned IPO, 2019 was a real year of reckoning for so-called technology unicorns. This year’s unicorns lost $100 billion in value. The WeWork disaster is particularly instructive for communicators because its crisis was in some ways a matter of PR succeeding too well. In other words, WeWork was a victim of its own hype. The company was built out as a high-growth technology startup but it was really just a dressed-up real estate business. Its CEO basked in his role as media darling and would-be visionary even as the company burned through cash and its liabilities soared. When it tried to divert attention with a shallow rebranding strategy and a prospectus filled with fuzzy, culty language, investors laughed, then punished the company harshly.

WeWork wasn’t the only unicorn to be smacked down in 2019. Even post-IPO companies like Uber and Lyft saw significant drops in their market cap. Maybe unicorns are named after a mythical creature for good reason.

Scandals swamp McKinsey

In 2019 the hits kept coming for consulting powerhouse McKinsey. It has had PR troubles in the past, but things started up again as The New York Times launched a series of investigative articles on the storied consulting company.

A deeply reported piece by ProPublica (in partnership with the Times) recounted McKinsey’s role helping U.S. Immigration and Customs Enforcement deport migrants and manage the care of those in custody. Proposed spending cuts for food, medical care and supervision reportedly caused even career ICE workers to be “uncomfortable.” McKinsey quickly issued a detailed rebuttal, shrewdly paying to have it appear in the top position for keyword searches for “McKinsey ICE.” Yet the rebuttal was swiftly challenged by ProPublica, which produced evidence from McKinsey powerpoint presentations that was presumably obtained from employees. McKinsey looked defensive or even misleading in characterizing its relationship with ICE.

Then came reports of the firm’s role advising Purdue Pharma on how to “turbocharge” sales of OxyContin. Court records from lawsuits against Purdue implicate McKinsey in Purdue’s efforts to boost OxyContin sales even after its abuse was widely known, including an exchange on “how to counter the emotional messages from mothers with teenagers that overdosed.” The story doesn’t suggest criminal conduct by McKinsey, but it’s a horribly distasteful account.

On top of everything, the Justice Department is investigating the firm for violation of bankruptcy laws. Taken together, the stories give the impression McKinsey is greedy and callous, if not dishonest, and its public response has been uneven.

The Sacklers fall from grace

Embarrassing though they were, reports of McKinsey’s helping boost OxyContin sales are nothing compared to the PR fallout experienced by manufacturer Purdue Pharma and the family who owns it. After years of legal wranging, Purdue filed for bankruptcy protection and settled lawsuits with 23 states. Yet more than 20 states have declined to settle, and the injured parties are pressing for a larger piece of the profits from the billionaire Sackler family.

For the Sacklers, 2019 brought new revelations after a judge ultimately ordered the release of previously redacted records. Even as the company publicly denied its opioids were addictive, its officers acknowledged the issues internally and at one point even designed a plan to profit off addiction treatment. And as lawsuits piled up, the Sacklers took billions from the company in order to shelter their assets. Massachusetts Attorney General Maura Healey called it “the very definition of ill-gotten gains.”

Connecticut Attorney General William Tong was even harsher. “Purdue and the Sacklers had a real opportunity to begin to make restitution to victims and their families and people across Connecticut and this country, and to begin to make it right. Instead, they again chose to prioritize themselves and protecting their wealth instead of meeting their responsibility to provide treatment and prevention. Purdue and the Sacklers could have helped put out the fire that they started and that has engulfed the nation. Instead, they choose to watch it burn.”

Several family members are known as international art patrons and generous enough museum donors to have an entire wing of the Met named after then. Until recently, that is. As damning information continued to emerge, the Sackler name was stripped off buildings at the Louvre and Tufts University and protesters targeted family members. The Sacklers have not changed their offer of a $3 billion settlement, but additional lawsuits await.

Prince Andrew is canceled

It was a royal disaster. At best, the interview was startingly tone-deaf. Duncan Larcombe, former Royal Editor at The Sun, called it a not just a car crash, but a “ten-car pileup.” Charlie Proctor, editor of the Royal Central website said, “I expected a train wreck. That was a plane crashing into an oil tanker, causing a tsunami, triggering a nuclear explosion level bad.” (You have to love the British flair for language.)

PR associates the world over were wondering why Prince Andrew agreed to a lengthy sit-down interview with the BBC’s Emily Maitlis. The reasons are pretty clear, actually; rumors involving the Prince’s association with notorious predator Jeffrey Epstein and allegations of sexual abuse had been growing over the course of the year. The Queen herself approved the interview. But it was Andrew’s demeanor and his insensitive comments that were so damning.

Though he called it a “wrong decision,” the duke didn’t express any real regret for his long association with Epstein, even after Epstein’s conviction as a sex offender. When asked why he was a guest at Epstein’s Upper East Side brownstone in 2010, the duke responded, “it was convenient.”  Critics labeled it “aloof, out-of-touch, and self-important.”  The backlash was so severe that Prince Andrew was asked to move out of Buckingham Palace and relieved of his royal duties. The best thing he can do now is to lower his profile.

College admissions scandal fuels outrage

No one died, but for sheer, irresistible outrage, not many 2019 stories beat the college admissions scandal. It achieved saturation coverage because there was something for everyone — celebrities, college sports, a social media influencer, and wealthy helicopter parents willing to bribe and cheat for their already privileged kids. The scandal was so diffuse that it’s hard to pick any winners, but some of those indicted handled things better than others. The institutions involved, including USC and Stanford, weren’t named in the criminal indictments and there’s no evidence that they knew what was going on. Virtually all are conducting internal investigations.

The chief targets of public anger were the celebrities, particularly Lori Loughlin, her husband, fashion designer Mossimo Giannulli, and their daughter Olivia Jade, a budding Instagram  and YouTube star. In my view Loughlin would have been far better off following the path of her fellow perp Felicity Huffman, who pleaded guilty, served a minimal sentence, and can now begin to rebuild her reputation. But in any event, the admissions bribery story had the kind of memorable detail that just confirms what many suspect about the system – that it’s rigged in favor of the rich and famous, or at least the rich and corrupt. There were photoshopped sports photos, faked SATs, and bribed proctors. Olivia Jade’s posts about not wanting to attend classes just rubbed it in for ordinary parents and kids who work like crazy to win acceptance at a decent college.

Honorable mention goes to Peloton for a defensive response to its much-criticized ad; luggage company Away, Nike (for clumsy handling of its maternity policy for female athletes), and Juul, who targeted teens in its marketing even while insisting otherwise.

Next up: The PR Winners of the Year.

The PR Losers Of 2018

Against the backdrop of an ever-faster news cycle, 2018 has featured brands and personalities who seized unexpected opportunities to generate positive PR.

By the same token, 2018 has brought public disasters for others. Which stories captivated us in 2018, and who came out where? Here’s part one of my list for 2018 PR Winners and Losers. Let’s get the bad news out of the way first.

Facebook just can’t catch a break

It’s on every communications professional’s “worst” list. In 2018, past misdeeds caught up with Facebook. After the Cambridge Analytica scandal exploded, CEO Mark Zuckerberg embarked on an apology tour, capped off with a cautious, contrite, and highly rehearsed performance before a Senate Committee in April. It was a detente of sorts, but the calm didn’t last. In November, The New York Times broke a blockbuster story based on three years’ worth of insider accounts of Facebook’s handling of the scandal. Its strategies were right there in the title — Delay, Deny, and Deflect. Even COO Sheryl Sandberg, who some have seen as a future presidential candidate, was badly tarnished by the piece. At a time when Big Tech’s reputation has plummeted, Facebook is a convenient scapegoat for an entire industry, but many of its problems are of its own making. There have been too many apologies that later rang hollow, and its bank of good will is nearly empty.

The NRA retrenches

Though controversial, the National Rifle Association has long been considered an indomitable PR force. Its aggressive stance on any and every issue related to gun ownership rights, coupled with its lobbying clout, made it a feared competitor. But 2018 brought a sharp reversal in its fortunes and its public image. The problems started with the activism that grew out of the Valentine’s Day shooting at Marjorie Stoneman Douglas high school. The Parkland students mounted a PR-savvy campaign to register young voters and focus attention on sensible gun legislation. What’s more, 2018 ended with a guilty plea by Maria Butina, the young Russian who allegedly tried to influence U.S. policy by infiltrating conservative groups, most notably the NRA, by posing as gun-rights activist in her own country. The story’s not over yet, but a willingness to stake out a middle ground on the firearms issue might have softened its critics. But as it stands now, the NRA will end the year with an eroding membership and declining revenues.

CBS has a #metoo moment (again)

The Tiffany network was again rocked by an unfolding scandal related to workplace sexual harassment. This time it claimed the job of network chief Les Moonves, costing Moonves his $120 million severance package and the network its reputation. In fact, CBS barely had a chance to recoup after its most recent #metoo scandal. The revelations that Moonves actively obstructed the investigation into claims that he sexually harassed and even assaulted employees came nearly a year after CBS fired Charlie Rose for sexual harassment. Worse, it seems that at least one CBS Board member knew about the allegations but said nothing. The mess just goes to show that most secrets don’t stay hidden forever, and that corporate cover-ups rarely stay that way. It’s usually best to expose all the bad news at once.

Scandal engulfs McKinsey

2018 was a regular annus horribilis for the blue-chip consulting firm. McKinsey was embroiled in a corruption and cronyism scandal in South Africa that nearly wiped out its business in the region. It even returned the $70 million in fees earned for the engagement due to widespread outrage over the “looting” of the South African economy. In June, the consulting giant announced it would no longer work for Immigration and Customs Enforcement (ICE) after the relationship became controversial among its own staff. A third reputation hit came in October with yet another investigative piece about its work in Saudia Arabia. Though it broke no laws, its representation of controversial clients has at best shown an inconsistent adherence to its own stated corporate values.

Tesla hits a wall

What to do when a company’s greatest asset – its founder – is also its biggest PR liability? That’s the dilemma Tesla faced this year when founder Elon Musk made news with a series of erratic moves in two-month period. In July Musk lashed out at one of the divers who helped rescue 12 Thai soccer players from flooded caves this summer, precipitating a wave of negative stories and a libel suit. Weeks later, he claimed in a series of tweets that he had secured funding to take Tesla private, startling investors and employees and triggering an SEC action and more litigation. As if that weren’t enough, in early September, Tesla shares nosedived and two senior officers resigned just hours after Musk smoked marijuana on a live web show. Despite its founder’s shenanigans, however, Tesla ended the year strongly, so here’s hoping it can stay on track in 2019.

Papa John’s feels the heat

Mercurial founders aren’t only in technology startups. Scandals burned pizza chain Papa John’s after founder John Schnatter’s use of a racial epithet during a phone meeting that was meant to be a media prep call, of all things.  Schnatter was ousted by Papa John’s board, but he sued his former company, and the result has been a mess of toxic PR for the brand. Apparently company franchisees are divided about Schnatter’s status, and his ouster precipitated more ugly disclosures, including at least two NDAs signed by women who accused the pizza king of sexual harassment.
“I am the American dream,” Schnatter once said in describing his company’s success. But in 2018, his behavior was a nightmare for the brand he created.

Kevin Spacey is “frankly” creepy

Thought we could close out 2018 without another #metoo moment? Think again. On Christmas eve, actor Kevin Spacey released a very strange video that may – or may not – have been a response to disturbing sexual assault allegations against him. His “frank” remarks were delivered in full villain mode as “House of Cards” antihero Frank Underwood and have generated over seven million views (more than any single season’s audience of the show).  Yet it was not a great PR move. In the video, Spacey seems to be urging his fans to look at his offenses the same way they do the murderous deeds of the character he played. Judging by the reaction on social media, most don’t buy it. Also caught in the turmoil was Netflix, which almost certainly had no advance warning of the video.

Mnuchin makes the wrong call

Another late-breaking PR crisis happened on when Treasury Secretary Steve Mnuchin attempted to calm financial markets after the government shutdown and a wildly gyrating DJIA. In a letter posted on Twitter, Mnuchin reported that he had held a call with major bank CEOs and denied a “brewing economic crisis no one knows about,” as Salon’s Matthew Rozda put it. The letter stated that “the (bank) CEOs confirmed that they have ample liquidity…for lending to consumer, business markets, and all other market operations.”
The problem, of course, was that no one was really worried about a liquidity crisis, so the call seemed like a panic move and backfired badly, helping to send the stock market spiraling further downward. It’s the classic “never deny a negative” rule; if you don’t want your target audience to worry about an unlikely development, try not to mention it.

Next up: PR Winners: The Best Stories of 2018