Blogs & Comment

The new rules of recovering from a corporate scandal

Brands can no longer expect to win in the court of public opinion. Save the CEO crocodile tears and fix things quietly

Volkswagen sign

(Julian Stratenschulte/AFP/Getty)

This article is part of our What We Learned in 2015 series. More to come.

When I was doing the research for my book Consumer Republic, I spent a lot of time thinking about Nike. The brand had been a target for Naomi Klein’s No Logo—a book I was essentially rebutting. Klein’s sweatshop exposé became an inadvertent case study of how a brand’s value, if threatened, can compel a corporation to behave itself. Expecting this bit of homework to be easy, I lazily Googled this phrase: “Nike scandal.” Imagine my surprise when it returned page after page of sneakers. Nike, it turned out, had launched a shoe called the Scandal, and the sweatshop story was buried under tons of retail promotion. To this day, I can’t tell whether this was premeditated on Nike’s part. Either way, it was a lesson in how PR works in the age of the 24-second news cycle. Sometimes the best strategy is simply to change the subject.

I wonder if Volkswagen will be as smart. There’s a streak of publicity tone-deafness in its family tree, as those who remember VW-owned Audi’s sudden-acceleration problem will attest. Using an argument that was all logic and engineering, Audi blamed the drivers of those cars for their misfortunes. Though this would eventually prove true, Audi’s defence came across as Teutonically arrogant, and it paid heavily. Today, as VW faces the pillory over fudging its diesel emissions compliance, the company doesn’t seem to have learned very much. Yes, the CEO was sacrificed, but the company still blamed “rogue engineers” for what happened. Even under the old rules of crisis management, contrition was table stakes. Now, the more VW tries to explain, the worse it gets. And that’s not because people are preoccupied with what Volkswagen did, but because keeping it in their faces compels them to judgment.

The company didn’t have to look far for an example of how to manage a situation like this by the new rules. General Motors has been dealing with a crisis of its own, this one involving faulty ignition switches that directly contributed to the deaths of at least 124 customers. Considering the dramatic consequences of the problem, the story has received surprisingly mild treatment in the mainstream media. That’s because General Motors has been wise enough to understand that no corporation can win forgiveness in the court of public opinion anymore. Here in the age of the toxic comment thread, there are just two kinds of people in that court: those who can never be satisfied and those who just wish it were over. So instead of theatrical mea culpas, GM has focused on solving the problem in the real courts, where fairness—not theatre—is the expectation.

It sounds callous, but there is little benefit anymore in allowing a corporation’s spheres of public affairs and branding to intersect. Consider the case of Amazon, which got what seemed to be a black eye earlier this year when its draconian working conditions were exposed by the New York Times. Pundits pontificated and trolls spewed bile, but when the dust settled a quarter later, customers had spoken: Amazon sales rose. Not that Amazon isn’t doing anything about its problem—it probably is—but it’s certainly not making a pantomime out of it. Like GM, it seems to understand that people are too fatigued with outrage to turn every instance of corporate failure into a personal cause.

Today, prolonging corporate contrition in the media is almost as foolish as not being contrite at all. Overexposure to a story like Volkswagen’s is far more likely to metastasize public rage than to dissipate it. Far better to admit wrongdoing, and then shut up and get on with making it right. Stay out of everybody’s news feed, and instead quietly bury the problem under a pile of archival evidence that you actually fixed it. In the long run, that will win you more public approval than an ocean of CEO crocodile tears.

Until the next time, at least. Today, if you Google “Nike scandal,” you’re as likely to end up with a page of stories about its possible role in the FIFA corruption affair. That’s the thing about changing the subject. It works. Just not forever.