On Monday, the Wall Street Journal ran a provocative — and wrong — look at some recent “PR fiascos” involving BATS Global Markets, JetBlue and Global Payments. All of the companies suffered major black eyes, but the Journal concluded that the damage done was minimal, even in this age of viral sharing. The paper’s take-away?
The muted reaction to these fairly big corporate messes raises an intriguing possibility: In a socially-networked world where investors, customers and employees are judge, jury and news editors, companies may be able to survive foul-ups better than in the old days of “traditional” news and corporate spin.
What the analysis conveniently forgets is that reputations aren’t forged overnight. One viral airline video, no matter how terrible, isn’t likely to prompt people to cancel bookings. (Especially at an airline such as JetBlue, which has invested a tremendous amount in building a customer-first image.) It’s the second, and the third, and the fourth videos that start to chip away at a corporation’s long-term image. The WSJ piece acknowledges as much, but not until the very last sentence.
But the real long-term impact of minor scandals isn’t best measured by short-term actions of consumers, but how a company gets branded by journalists over the long term. Every beat reporter knows the stereotypes of the companies they cover, and those stereotypes — over time — color coverage. It’s the reason that Apple products are assumed to be innovative, regardless of the reality. It’s the reason why American carmakers are only now reversing quality perceptions forged decades ago. Those are the obvious examples, but the same thinking influences how almost every company gets covered, in at least a subtle way.
As a reporter who covered the pharmaceutical industry 10 years ago, I’m amazed at the way long-held narratives still creep into coverage. The halo of a sound R&D arm can blunt even a string of clinical failures, and perceptions about strategies from long-departed executives are still provide the basis for today’s storylines. These perceptions are too strong to be uprooted by a single, runaway Internet meme.
That doesn’t mean that PR folks can rest easy. There’s no doubt that corporate stereotypes held by journalists are now impacted by chatter on social networks, where errors that were one small and private — a misunderstanding of an embargo, a disgruntled customer — get broadcast to a larger, more influential group. Indeed, there are far more ways now for journalists to compare vital online tempests to their existing perceptions.
Rather than worrying about handling one single issue well to preserve or build a reputation with both media and journalists, smart companies now have to worry about handling hundreds or thousands of issues consistently and thoughtfully, to prevent long-term damage. Yes, BATS Global Markets, JetBlue and Global Payments may have all sustained only a small wound. But add that wound to another and another and another. It doesn’t take long to get to the proverbial death by a thousand cuts.