#MeToo Slams Under Armour: Can It Recover?

The #metoo movement has claimed the reputations of many high-profile men. But its real impact may be at the corporate level. Our heightened awareness – and the corporate reluctance to address systemic misbehavior – presents serious public relations challenges for established companies in every sector. No brand is immune from a reckoning with the consequences of inattention to sexual harassment and inequality in the workplace.

Take onetime media darling Under Armour. The brand enjoyed huge early success, in part due to the  real-life story of founder Kevin Plank. A former football team captain, Plank developed the line based on moisture-wicking technology that was later adopted by NFL teams and featured in hit movies. The company expanded aggressively, and with its growth came inevitable setbacks. The past two years have been particularly rough, and its fumbles show how hard it can be to salvage a reputation when faced with simultaneous business challenges.

The reputation issues started with Plank’s public praise of President Trump as a “pro-business leader” last year. The comment didn’t sit well with some of the brand’s star athletes like Stephen Curry and Misty Copeland, and customers threatened a boycott. Plank was forced to explain himself in a full-page ad in hometown paper Baltimore Sun. He later resigned from the president’s Manufacturing Jobs Initiative Council and joined other business leaders in condemning Trump’s equivocal comments after events in Charlottesville – which prompted threats from Trump supporters. Things eventually calmed down, although the business environment didn’t improve much.

Business suffered as some of its large retail customers struggled, and the brand lost cachet among the all-important teen segment. Earlier this year Under Armour announced a restructuring meant to streamline its business and refocus on women’s apparel, among other areas. Yet just as its recovery started to gain traction,it was hit with serious criticisms of workplace behavior and culture born out of #metoo.

A scathing story in The Wall Street Journal recounted how female employees were subjected to sexual harassment and “inappropriate conduct” in the workplace. Under Armour covered expenses for employee entertainment at strip club, and the piece describes an annual outing at Plank’s home where young female employees were invited based on their attractiveness.

To its credit, the company responded quickly in the wake of the Journal story. Plank’s statement referred to “systemic inequality in the global workplace” and pledged to “accelerate the ongoing meaningful cultural transformation that is already under way at Under Armour.” Although the statement doesn’t actually accept responsibility for misbehavior, it does promise to do better.

Yet the Under Armour example shows how, when a company is already weakened, a reputation shakeup can do more damage than it otherwise would, precipitating customer disenchantment and defections of talent. By contrast, Nike announced a raft of departures by highly placed male officers after scores of female executives complained of systemic harassment, unfair treatment, and retaliation when they brought their concerns to HR officers. But the $112 billion Nike may be better equipped to withstand setbacks, and it has moved swiftly to install women in senior leadership positions.

The formula to protect reputation in the #metoo era is both simple and very, very difficult.

Root out the bad actors

This is an obvious first step, though it can be easier said than done when the harassers are considered top performers, or if they have a close relationship to the CEO. One of Under Armour’s earliest employees was Scott Plank, Kevin Plank’s brother, who rose to EVP for Business Development but retired quietly in 2012 amid allegations of sexual misconduct. Many other positions were held by friends of the founder, and, not surprisingly, it had a corrosive effect on the culture.

Make sure women are in positions of influence

Workplace studies show that harassment is more common where men outnumber women and where the supervisor ranks are mostly male. Research by the American Psychological Association (APA) showed that sexual harassment at work is more likely to be reported at organizations with women in senior leadership (by 56% vs 39%). Under Armour’s only C-level female was the HR chief, and she recently left the company to accept another position. Over the past year the company also lost its female SVPs for global retail and global brand management. If those aren’t flashing red lights, I don’t know what is.

Establish a rigorous protocol for complaints

Too many corporations limit their role to refreshing the corporate sexual harassment policy or stepping up worksite sessions on the topic. They may talk the talk, but when a sensitive complaint surfaces, the impulse is to cover it up. Worse, the corporation may stigmatize the person who brought the complaint, sometimes unwittingly. To protect its reputation a corporation cannot afford to ignore systemic power imbalances, unresolved complaints, or episodic misconduct.

The heart of reputation, of course, is corporate culture. David Ballard, Assistant Executive Director of Organizational Excellence at the APA sums it up. “All the training, policies and punishments won’t have an impact on harassment if you don’t address power differentials, pay equity and gender equality in organizations,” he notes. Like most workplace problems, the #metoo affliction is easier and less painful to prevent than it is to treat. An organization that cultivates diversity, openness, and ethical behavior is in far better shape to handle unforced errors of any kind, especially today.

Five Cases Of Top PR Crisis Management In 2014

It’s hard to find terrific examples of crisis management PR, presumably because we don’t hear about the crises that never happened. When a true reputation emergency hits, communications experts like to criticize it and offer retroactive advice.  Armchair pundits urge businesses to “get ahead of the story,” – good counsel, in theory. It’s not so easy when you’re the one in the PR hotseat.

In the real world, things are more complicated, even chaotic. Smartphones are blowing up, social media feeds are flooded, and conflicting advice abounds. Sometimes key advisers aren’t even reachable within the first hour.

Yet there are times when potentially fatal situations are brilliantly managed. Here are a few examples of this year’s most skillful crisis management.

Virgin Galactic’s Tragic Test.  CEO Richard Branson showed why he’s a master of communications in the wake of the fatal crash of the Virgin Galactic test flight in October. First, he rushed to the crash site to show that he was completely engaged by the tragedy and that an investigation was top priority. Branson then issued a statement that mixed compassion with determination, pledging to get to the bottom of the accident, yet reinforcing his commitment to commercial space travel.

Renee Zellweger Faces Critics. It may seem silly to include a case of apparent cosmetic surgery on this list, but when Zellweger appeared at a screening with a dramatically altered look, the media coverage was relentless and the social media reaction fierce. For an actor whose most important creative instrument is her face, that’s a career-threatening situation. But Zellweger kept her cool, offering a polite response to the uproar but largely letting friends and advocates fight on her behalf. As crisis expert and author Eric Dezenhall advises, sometimes less is more.

Under Armour Skates Around Trouble. Just before the 2014 winter Olympics, new speedskating suits from Under Armour were promoted as offering a high-tech performance edge to the U.S. speed skating team. It was terrific exposure for the brand – at least, until the U.S. team stumbled in early races. Some thought a flaw in the suit design was to blame. Under Armour was caught between arguing with the players it sponsored, or admitting that the suits may have been at fault. Instead, it publicly supported the team’s decision to revert to older suits (also made by Under Armour), while reminding us that the same skaters had turned in stellar times in pre-race heats while wearing the newer apparel. Sadly, the U.S. performance never improved. But Under Armour raced past the controversy and looked like a team player when it announced it would continue its sponsorship for eight more years. Well played.

Silver Ousts Sterling. After L.A. Clippers owner Donald Sterling was recorded making racist comments, NBA Commissioner Adam Silver slammed Sterling with a $2.5 million fine and banned him from basketball. Sterling’s response was a PR power play; he acted swiftly and decisively, while articulating NBA values. The language in particular was a winner; Silver conveyed anger and distress and apologized on behalf of the association, showing personal commitment as well as professional leadership. Contrast Sterling’s strategy with that of NFL president Roger Goodell after Ray Rice punched his then-fiancee on video. Goodell ultimately acknowledged that the initial two-game suspension of Rice was inadequate, but his weak response, and the fact that he claimed not to have seen the full video (which was available for the asking) hurt his credibility, to say the least.

“Boo Boo” Goes “Bye-Bye.” TLC made a quick decision to cancel “Here Comes Honey Boo Boo” after news broke that “Mama June” had taken up with an ex-boyfriend who is a convicted sex offender. I give the network high marks for acting decisively and making its position clear. Less than twenty-four hours after TMZ broke the story, TLC pulled the plug on its hit show for the sake of “the health and welfare of these remarkable children.” Contrast the move to A&E’s response when Duck Dynasty star Phil Robertson made anti-gay remarks in a magazine interview. Robertson was suspended, but the network stalled on announcing a decision about the show. It then reinstated the patriarch, but the damage was done.

Best and Worst in PR Crisis Management 2014

The year is only half over, and already there have been all manner of PR “crisis” situations for professional communicators to dissect. But some recent shenanigans, and the accompanying reputational consequences, have been so varied and so fascinating that I’ve decided to bestow informal “awards” for crisis PR.

Most entertaining: Hands down, the Donald Sterling fiasco, a PR blogger gift that has kept on giving since tapes of the not-yet-former Clippers owner’s racist remarks were leaked in April. The best game plan here was the one followed by NBA Commissioner Adam Silver, who wasted no time in showing us what kind of leader he is. In slapping Sterling with a $2.5 million fine and a lifetime ban from the sport, Silver pretty much followed the classic reputation rule book; he was swift, strong, and clear.

The real question is whether Sterling’s reputation can be redeemed. Most say no, although some bold ideas have been floated. Are you listening, Olivia Pope?

Most inevitable: Another sports figure felt the heat as fans turned towards the World Cup (and host country Brazil fought off challenges to its own reputation.) Charges of corruption and bid-rigging connected with Qatar’s winning tender for the 2022 World Cup were aimed at longtime FIFA chief Sepp Blatter and many of his cohorts. Blatter’s response to the evidence of bribery broken by  The Sunday Times showed both weakness and arrogance, however. As giant corporate sponsors like BP, Budweiser, and Coca-Cola pressed for an investigation and cleanup, Blatter blamed the accusations on “racism and discrimination.” Not very credible.

Most well handled: When U.S. speed skaters turned in a dismal performance at the Sochi Winter Olympic Games, some blamed the heavily hyped high-tech uniforms provided by Under Armour. But what could have been an agony of defeat for the company was averted by deft handling of the situation.

Rather than take issue with its own athletes, or admit that its technology could be the problem, the company reminded the public of the new suits’ stellar marks in pre-race heats, but then supported the team’s decision to swap them for older suits (also made by Under Armour.) The team’s performance never improved, and Under Armour quickly skated past the problem to focus on the future by announcing it would re-up its sponsorship for eight more years. Well played, Under Armour, well played.

Least surprising: Ousted American Apparel founder Dov Charney‘s antics might have been less eyebrow-raising than Donald Sterling’s, but they were no less colorful. This is a company with a founder that thrives on shock PR. It cheerfully newsjacked the Hurricane Sandy tragedy to sell clothing, labeled a South Asian model “Made In Bangladesh” in a controversial ad, and featured store mannequins with pubic hair.

Just last week, as the Charney situation was cooling, AA ran a July 4th ad that featured an image of the doomed Challenger shuttle explosion instead of fireworks. (The mistake was supposedly inadvertent, but it did nothing to help matters.) The AA Board did the right thing in firing Charney, but they may be in for a messy legal battle, as he’s unlikely to go quietly.

Most thorny: Facebook‘s now-infamous “emotion study” raised cries that it had crossed ethical (and possibly legal) lines by manipulating users’ emotions without their consent or knowledge. Yet there are those who think it’s been unfairly singled out given the “opt-in” nature of so many social networking sites and communities.

In any event, Facebook’s response to the controversy has been to “circle the wagons,” as one privacy expert put it. CEO Sheryl Sandberg acknowledged that the study was “poorly communicated” and assured users that “we didn’t mean to upset you.” But for Facebook, which is now in the crosshairs of the FTC following a complaint filed by a privacy group, the lack of transparency and halfhearted apology probably raise more questions than they answer.