PRovoke Media 24 Jan 2022 // 7:58AM GMT
You can find all of our annual Crisis Review coverage here
14. Ozy Media implodes
It seemed Ozy Media was well on its way to securing its stature as “the new and the next” multimedia organization its charismatic leader, Carlos Watson (pictured) envisioned. The digital media company’s staff was up to 75, cranking out content like Watson’s eponymous YouTube talk show, which drew guests from Dr. Anthony Fauci and Bill Gates to NASCAR’s Bubba Wallace and R&B’s H.E.R.
Silicon Valley investors were keen to bankroll the operation, to the tune of tens of millions of dollars. Advertisers liked Ozy, too, with big-name brands such as Chevrolet, Facebook and Target buying spots.
But Watson’s world crashed down around him — loudly and clearly — last fall, after the New York Times exposed the operation for what, by and large, it was: a sham. The reports revealed Watson as an accomplished liar, duping TV executives into believing the talk show would air on A&E and creating stories about Ozzy and Sharon Osbourne being investors. Audience numbers were inflated — by a lot. Axios reported most of Watson’s viewers were paid.
And then there was this doozy: Earlier in the year, Ozy co-founder and COO Samir Rao impersonated a YouTube executive during a conference call with Goldman Sachs while trying to seal a $40 million deal.
Ozy crumbled quickly from there. Katty Kay, who joined Ozy after more than two decades with the BBC, resigned. So did chairman Marc Lasry, the billionaire investor, saying “I believe that going forward Ozy requires experience in areas like crisis management and investigations, where I do not have particular expertise.”
“Ozy Media’s key stakeholder didn’t buy any of it and voted with their feet — the chairman of the company’s board resigned, top talent fled, and investors bailed and took all their money with them,” said Rich Tauberman, MikeWorldWide executive VP of crisis and issues management. “The made-for-TV founder let ego get in the way of a good idea.”
Ozy shut down October 1, a move that also dissolved any efforts to mitigate the crisis, such as a company-commissioned legal investigation.
“Shuttering Ozy Media likely became the only viable option,” said Group Gordon chief strategy officer Andrew Jarrell. “When executive leadership has demonstrated a consistent pattern of dishonesty, there is no communications strategy or apology that can regain the trust of stakeholders.”
Which is not to say Watson wouldn’t try. Just days after closing the operation, Watson went on the talk show circuit, pledging to revive Ozy. But with the plethora of legal challenges to Ozy out there, including federal investigations, its future looks dim.
“To dig out of a crisis as serious as Ozy’s, your team needs to take control quickly to establish credibility, apologize for wrongdoing, and lay out a clear path to recovery with clear oversight. Ozy, however, did everything wrong,” said Bully Pulpit Interactive's Ben LaBolt.
“Ozy became the Theranos of media — an aspirational vision that was continually laid out but never matched reality, with no concessions ever made even as the house of cards began to collapse. Ozy will be remembered as the vaporware of the digital media ecosystem,” he said.
15. Goldman Sachs' "inhumane workplace"
It’s no secret among young recruits that a high-pressure New York investment bank like Goldman Sachs works its junior staff hard and that, for many, long hours are just part of the deal. But, according to 13 first-year analysts, Goldman crossed the line from being a tough employer to being an abusive one.
In February, the analysts presented to management their own Working Conditions Survey, which found an “inhumane” workplace where they worked more than 95 hours a week, leaving time for only five hours of sleep a night starting at 3 am. A majority said they feel they have been the victim of workplace abuse. One analyst said he had “been through foster care and this was arguably worse.”
By March, the survey was leaked online, putting the investment bank in the proverbial hot seat. CEO David Solomon, who tied the long hours to historically strong business, responded by vowing to remedy the situation. In a voice memo to staff he said this “is something that our leadership team and I take very seriously.”
He moved on the enforcement of the firm’s 'Saturday rule' (which required all analysts and associates to be out of the office from 9pm on Friday until 9am on Sunday) and fast-tracked hiring more junior bankers. In April, Goldman announced pay hikes for junior staff.
While the analysts’ complaints were indeed extreme, harsh working conditions aren’t anything new in the banking industry. The New York Times in March published readers’ reactions to the complaints, including one anonymous New Yorker who wrote:
"I spent many long nights in the office at the behest of associates and VPs, most of the time for no reason but ‘they might need me.’ Then I joined the military, where I had better work-life balance and more respectful leadership than I did in banking."
"Almost 10 years ago a Goldman Sachs employee famously resigned via op-ed, raising issues about everything from working conditions to a toxic culture with abusive leadership. It seems that nearly 10 years later, little has changed, including Goldman’s response," said MikeWorldwide chief reputation officer Carreen Winters. "The first step in solving a problem is admitting you have one."
Goldman Sachs may be forced to do that sooner versus later given growing expectations that companies address employee satisfaction and mental health (to say nothing of giving staff time for basics, like sleep).
“In an era where employer brand is becoming a litmus test for all stakeholders, Goldman Sachs needs to realize that big salaries are not enough to compensate for fundamental issues with its culture that go beyond enforcement of a ‘Saturday Rule,’” Winters said. “It is common for companies like Goldman Sachs to dismiss these issues as industry norms for which employees are highly compensated. The question is whether Goldman Sachs will continue to rely on the ‘industry norm’ defense or will they seize the opportunity to be the one that makes change and become the employer of choice at a time when talent is scarce.
“Fundamentally, this is not an issue of communications. It is a question of values, and an opportunity to become the leading employer brand in the sector,” she added.
16. Metropolitan Police in the dock
For London’s police force, the Metropolitan Police, 2021 was bookended by two huge reputational crises which have dented already-shaky confidence in the organisation.
On 15 March – just days after the Met had allowed a rowdy anti-vax protest to proceed almost unimpeded – the force entirely lost control of a peaceful vigil following the kidnapping and brutal murder of Sarah Everard by a serving Met officer. Shocking photos showed male officers manhandling women who had been laying flowers to remember Everard: a bewilderingly and offensively tone deaf response that was compounded by statements from Met Police boss Cressida Dick which struck completely the wrong tone and were entirely lacking in empathy.
Crisis management veteran Rod Cartright says – as he wrote at the time – the incident on Clapham Common was not only a PR crisis: “It was an abject failure of policing leadership, decision-making, negotiation and policy – a failure, put simply, of human rights and humanity.”
Fast forward to the end of the year and the start of 2022, and the Met has continued to fail to read the room, so far resisting any investigation into (alleged) repeated, serious breaches of Covid health protection regulations at prime minister Boris Johnson’s office and home, No. 10 Downing Street, in the shape of boozy parties because of “an absence of evidence” and the decidedly odd statement that “officers do not normally investigate breaches… long after they are reported to have taken place.”
The disconnect between the stated aims of the Met and public perception is measurable, Cartwright points out: “While the Met Police website declares a vision to be ‘the most trusted police service in the world,’ underpinned by values of “professionalism, integrity, courage and compassion”, YouGov data from October 2021 found that only 33% of the British public now trust the Met (vs. 42% who do not).”
Cartwright’s assessement: “Beyond a widespread sense that the Met faces a potential problem of institutional misogyny and sexism, its simple problem is this: the extent of reputational damage is fundamentally determined by people’s visceral, emotional reactions – the extent to which their sense of fairness, justice, decency and ‘doing the right thing’ are offended. Whether it is Clapham Common or 10 Downing Street, until people stop saying ‘seriously?’ and ‘you’ve got to be kidding me?’ the force’s annus horribilis may spill well into 2022.” — MPS
17. Better.com CEO sacks 900 people on Zoom
Vishal Garg is a very accomplished guy, having created and grown Better.com, a Softbank-backed homeowners’ platform that, according to its website, has handled $46.9 billion in mortgages since its launch in 2018.
So you have to wonder what Garg was thinking, or if he was thinking, when he gathered roughly 900 people on a Zoom call last December to give them the collective ax.
“If you're on this call, you are part of the unlucky group that is being laid off," CNN Business reported Garg saying on the call. "Your employment here is terminated effective immediately." The meeting reportedly lasted all of three minutes.
The move didn’t bode well for Garg, who was hit with a torrent of criticism for the callous move after word got out. Stories of past transgressions surfaced, recalling incidents including allegedly shady business dealings to a staff email calling employees “a bunch of DUMB DOLPHINS.”
Less than a week later, Better.com’s board put Garg on leave. Call it a teachable moment. “In a pre-pandemic era, internal communications and empathy weren't hallmarks of most top CEOs. But as the Better.com outcry about a mass Zoom firing shows, expectations have changed. The CEO’s job today requires dialogue, knowledge sharing and authenticity,” said Ruder Finn CEO Kathy Bloomgarden.
The magnitude with which the incident blew up shows employees expect a caring culture, values and organizations getting it right, she said.
Garg must have spent his month off doing some serious soul searching, given that he was cleared by the Better.com board to return to work earlier this month. During his absence, Better.com also conducted an independent investigation into its company culture, and is recruiting a new board chairman, HR leader and CFO.
“He has apologized twice and returned to work with the support of the board of directors after some time off and executive coaching, proving that the power of an apology is still effective, even during a pandemic,” said MikeWorldwide chief reputation officer Carreen Winters.
Only time will tell, however, whether Garg’s contrition is enough to win back the respect of stakeholders.
“I can only imagine that the scenario shattered confidence and trust in the company’s leadership,” said LinkedIn corporate comms manager Michael Kaye. “I have no doubt we’ll be discussing Better.com’s mass-firing for years to come.”
18. Seoul Milk depicts women as cows
Bungled ads are a regular feature of this Review, with Seoul Milk taking the honours in 2021 for an effort that appeared to depict women as cows. The video also featured a man secretly filming them, which many observers linked to the illegal practice of 'molka'.
South Korea's biggest dairy brand was forced to remove the ad following a public backlash. Neither was this the first time that Seoul Dairy has faced such a controversy. In 2003, the company had female models spray yoghurt on each other at an event to promote the launch of its new products. Personnel and event organizers were fined for ‘obscenity’.
"This past experience doubles the blow for Seoul Dairy because it highlights the failure of corporate governance and a complete disregard for the current sentiment in Korea that gives increased focus to the continued exploitation of women, molka, and a growing #MeToo movement," says MSL Asia-Pacific CEO Margaret Key. "And, beyond the facts, women depicted as cows? A large number of netizens have taken to social platforms to complain with one commenting surprise that the advertisement had been created in 2021, not decades back."
Neither has the lack of diversity or gender representation on Seoul Dairy's executive board escaped criticism either. "If more women had been a part of the board, would this advertisement have been approved and released?" asks Key.
Meanwhile, Korean advertising regulators deserve their share of censure too, continues Key, for approving the ad in the first place. "This underscores an even bigger societal issue in Korea."
While Seoul Dairy apologised, they waited more than a week, compounding the backlash. And there has been no communication since. For Key, this represents a modern example of "what not to do" in a crisis situation.
"One position statement on a company’s website is a very outdated way of managing issues/crisis communications," she explains. "In a market like Korea where the interplay between consumers, media and social channels is fast and furious, communications must be transparent, agile and multi-platform. In a situation like this, executives must also be front and center to address stakeholder concerns while also speaking to short and long-term actions. Much has been lauded about Korea’s rise as a global content trailblazer but it is clear that more work needs to be done back home." — AS
19. Clean Creatives goes after Edelman
PR firms are more commonly entrusted with managing the various crises on these pages, but Edelman found itself at the centre of the story in late 2021, when it became the focal point for Clean Creatives' efforts to make PR and ad agencies end their work for fossil fuel companies.
In November, more than 100 celebrities and influencers signed an open letter calling for Edelman to drop fossil fuel clients, most notably ExxonMobil. The campaign, whose signatories also include Naomi Klein, Mona Chalabi, Ilana Glazer, Meena Harris, Philippe Cousteau, Baratunde Thurston and David Cross — among numerous activists, creatives and influencers — was the latest of several Edelman-focused actions by Clean Creatives, which launched in 2020 to address the ad and PR industry’s work with fossil fuels.
A recent New York Times article, meanwhile, detailed disquiet among agency employees about Edelman's refusal to stop working with energy companies.
It followed increasing scrutiny of Edelman's work for ExxonMobil in particular, after the world's largest PR firm pledged to stop working with coal producers and climate change deniers in 2015. That decision followed the termination of Edelman's lucrative relationship with the American Petroleum Institute.
In October, however, The Guardian included Richard Edelman among its list of America’s top “climate villains,” 12 powerful individuals that the newspaper claims bear responsibility for climate change by enabling the industries that are part of the cause.
In September, Gizmodo reported that Edelman had been working on an Exxon ad campaign to oppose climate regulations. Richard Edelman has strongly denied that the firm's work for the company opposes climate legislation, instead focusing on job creation, economic opportunity and land access.
In March, Buzzfeed News reported that tax filings obtained by the news outlet show that in 2019 Edelman accepted more than $4 million from the American Fuel and Petrochemical Manufacturers, a major US oil trade organization known for its aggressive opposition to climate solutions.
All of which put Edelman on the defensive, with the firm this month identifying 20 emissions-intensive clients that it will start discussions with regarding a series of litmus tests that determine whether the firm will walk away based on an incompatible approach to climate change. The move was the result of a 60-day assessment of Edelman's client portfolio, which the firm announced in November amid the increased pressure from climate activists.
But, in classic crisis management fashion, it may be that Edelman's actions leave all parties somewhat unsatisfied. Clean Creatives responded that anything less than ending all work with clients that are expanding fossil fuel production, perpetuating climate deception, or hindering climate legislation is "greenwash". Some of Edelman's younger staffers, in particular, may take a similar view, judging by the tenor of comments reported by the NYT article.
As the world's biggest PR firm, furthermore, Edelman will continue to attract attention regarding its plans to hold discussions with "emissions-intensive" clients, and whether it will actually end any relationships. There is a reasonable case to be made that more change can be affected by being "at the table", but Edelman may find itself facing increasing pressure to distance itself from specific companies regardless of their ability to be part of the solution.
Neither is this issue likely to stop with Edelman alone; it seems inconceivable that other PR firms will not find themselves called out for their fossil fuel work, particularly given the mainstream interest that these stories attract. — AS
20. Fabindia sparks culture war
Leading ethnic wear and handicraft brand Fabindia used the Urdu word 'riwaaz' to launch a festive collection on 9 October. Right-wing groups began calling for a boycott soon, making their campaign one of the top trends on social media. Fabindia's initial tweet, which went viral, read: “As we welcome the festival of love and light, Jashn-e-Riwaaz by Fabindia is a collection that beautifully pays homage to Indian culture”.
The backlash was led by a politician and elected member of Parliament. Soon the hashtag #BoycottFabindia began trending. Fabindia deleted its tweet and responded as follows: "We at FabIndia have always stood for the celebration of India with its myriad traditions in all hues. Our current capsule of products under the name Jashn-e-Riwaaz is a celebration of Indian traditions. The phrase means that, literally. The capsule is not our Diwali Collection of products. Our Diwali collection called ‘Jhilmil si Diwali’ is yet to be launched."
Jashn-e-Riwaaz is a phrase in Urdu, a language that was born in India, but is increasingly viewed as a Muslim language amid a tide of increasing intolerance in the country. "There is a new culture of right wing extremism that is being driven by supporters of the central government who are from the right-wing Bharatiya Janata Party (BJP)," says Promise Foundation founder Amith Prabhu. "Brands need to be extremely careful in these times to get their messaging right as there are numerous sensitivities."
With employees and stores threatened, the brand pulled communication. The lesson, says Prabhu, is clear. "Either stand up for what you believe in or not tread in dangerous territory, given how the atmosphere has been vitiated by a few fringe elements."
BCW India CEO Deepshikha Dharmaraj adds that the situation reflects "a very fine line between a brave campaign and one that misfires," where preparation is critically important.
"When done with careful preparation, mapping out vulnerabilities, building the right conversations to set the context, creating resonance for the message in advance and having responses to various possibilities ready, a campaign like this can really be impactful," she explaines. "Instead, unfortunately, FabIndia misjudged the timing of the campaign and then came across as being on the back foot when they responded."
Fabindia could also have benefited, adds Dharmaraj from another perspective. "That helps you look at the idea from different perspectives as well as pre-empt the response to it." — AS