Crisis Review: Read Part One

8. Target caves to anti-Pride forces

Target had long enjoyed a good relationship with the LGBTQ community, which unfortunately went to pot last spring, when the chain caved to a small but virulent (and potentially violent) cadre of homophobes who wanted its Pride Month merch off the floor. 

The whole thing started in May, when Target stores started receiving threats from ultra-conversative anti-LGBTQ groups who launched an aggressive campaign to have the retailer — the sixth largest in the country — remove its Pride-themed wares, including “tuck-friendly” bathing suits the rabblerousers falsely claimed were being sold to children. The collection also included the array of stuff (hoodies and T-shirts, as well as children’s books about transgender issues) that, after more than a decade of annual sales, has, for the most part, become pretty mainstream.

But while competitors, including Walmart, stuck by their Pride Month promotions, Target yielded to some of its angry customers’ demands, saying that the “volatile circumstances” warranted doing so to ensure its employee’s safety and well-being. In some communities, Pride displays were moved from the fronts to the backs of stores; The  chain also removed items “at the center of the most significant confrontational behavior.”

LGBTQ advocates, however, didn’t buy Target’s defense of its actions, which executives continued to stand by months after the fact (never mind that the right-wing backlash was a contributor to a Q2 sales slump). The rift between Target and LGBTQ consumers — who increasingly have the spending and political sway retailers want — grew wider.

“Quite simply, Target gave into terrorism,” said Bospar principal Curtis Sparrer. “Some coward threatened the safety of Target employees if Target maintained their Pride display and instead of standing their ground, they caved.”

RenewPR president Ben Finzel, who is a founding partner of The Change Agencies network, agrees.

“The Target Pride merchandise debacle was a brand failure that didn’t need to happen,” Finzel said, noting that Target had a long track record of being consistently LGBTQ-inclusive until 2023. “It was a challenging situation with a simple solution: stand up for your values, especially in times of struggle. By deciding to back down from long-standing support for LGBTQ people, they made everyone mad. Their actions weren’t enough for the vocal minority of people who claimed they were being offensive, and they were too much for pretty much everyone else. It’s a classic example of trying to please everyone and disappointing everyone instead.”

LaTricia Woods, founder and CEO of Mahogany Xan Communications, called Target’s decision to remove Pride items under the “guise” of employee safety disheartening.

“Additional security measures could’ve been employed to send a clear message that violence and violent behavior towards staff would not be tolerated in its stores. By giving in to the mob mentality, I believe Target may have impacted its employees' well-being in a different and much deeper way. The company showed that it is not willing to stand up and protect the rights of its employees, and when push comes to shove, it will instead empower the bullies by caving to their demands and their vitriol,” Woods said. “The problem with that kind of allyship is that it is a fair-weather type of allyship… one that touts how supportive they can be to a marginalized community when times are good, but the real test of the power of an ally comes during times that are difficult.”

With Pride 2024 just a few months away, Target has some serious soul searching to do when it comes to charting the course of its relationship with LGBTQ consumers and where it goes from here. “All eyes will be on Target for 2024 Pride, but it won’t be an enviable position. The retailer will have to thread an unforgiving needle, in an effort to make both critics on the left and right happy,” Sparrer said.

Whatever Target’s next moves are, however, the store has its work cut out if the goal is truly restoring its once-fruitful relationship with LGBTQ shoppers — and that includes more than rolling out the Pride merch once a year.

Said Finzel, “This isn’t about checking a box or waving a Pride flag only in June, it’s about taking what you do and why you believe it and bringing it back to your brand and why all that makes sense. Consumers understand that and appreciate it and it’s why they like brands such as Target. Target needs to understand that when you forget that and react badly to a threat, you lose. It’s about doing what you said you would do, even, or especially, when it’s difficult. To quote Dr. Martin Luther King, Jr, ‘The time is always right to do what is right.’” — Diana Marszalek

9. The secret scandal of J-pop

Johnny & Associates is not just Japan’s pre-eminent talent agency but something akin to a force of nature in the country’s enormous entertainment industry. So, when close to 500 people claimed to have suffered sexual abuse at the company over a period of decades, it plunged Johnny into a crisis from which it has yet to fully recover.

The allegations center around founder Johnny Kitagawa, who founded the firm in 1962, commanding a near-monopoly on male talent until his death in 2019. Rumours of Kitagawa abusing boys first surfaced in the 1960s, but were largely unreported until the BBC released a documentary in March of last year.

Soon after, singer Kauan Okamoto came forward with fresh abuse claims, triggering a wave of further allegations from former stars. Johnny responded by appointing a committee, which concluded that Kitagawa had abused hundreds of boys, and that the agency had covered up the issue. Many corporates have cut ties with the firm, while Kitagawa’s niece and president was forced to quit. 

The company compounded its woes by opting for the usual crisis PR playbook in Japan. “There is a prevailing sense in corporate Japan that when a scandal hits, tearful contrition, deep bows at a press conference and possibly a resignation or two will make everything right again,” says Hoffman Agency content editor David Blecken. “Clearly, stock apologies were never going to be enough to wish away years of abuse and cover-ups, and to onlookers it seemed the sorrow was due to having been exposed, not introspection and recognition of having been party to deep injustice.”

Indeed, says Blecken, acknowledgment came much too slowly at a company that found itself unable to continue hiding and covering up its past misdeeds. “The foot-dragging was made worse by an ambiguous response from the new president, who said he could not remember whether or not he had participated in harassment.”

Johnny’s eventual restructure and rebranding, designed to draw a line under the scandal, was similarly “tone-deaf” says Blecken. 

“First, the company was defiant, insisting it would not change its name and continue business as usual,” explains Blecken. “Eventually giving into pressure, it decided to split into two entities, one dedicated to providing compensation to victims and one that would operate as a new talent agency. Bizarrely, it settled on the name Smile-Up for the former, which many took as an insult. It is hard to imagine more poorly construed branding.”

The crisis also highlights significant shortcomings in both the Japanese media and its wider culture of corporate governance. “Many outside Japan found it strange that it took a foreign media organisation to bring the scandal to light,” points out Blecken. “But this is in keeping with the reticence of the local press when it comes to investigating domestic institutions. Despite years of rumours, neither the media nor corporate clients made any serious inquiry nor voiced concerns. 

“One hopes the gravity of this episode will result in greater vigilance, accountability and rigour from the entertainment industry, advertisers and the media, but then again, traditions do not change easily.” — Arun Sudhaman 

10. The voice of UK business stutters in addressing sexual misconduct

Bad boardroom behaviour is often a theme in crisis case studies, but it struck a particularly galling note at the Confederation of British Industry (CBI) last spring, after it became clear that the organisation – which lobbies the government on behalf of the UK businesses who make up its membership – had failed to keep its own house in order while positioning itself as a positive driver of change.

The unravelling started in March, when the Guardian newspaper dropped the bombshell that it had approached the CBI to ask about a formal complaint made by a female employee in January about “unwanted verbal contact” from director general Tony Danker that she defined as sexual harassment, as well as other informal allegations about his behaviour. These included concerns that he had viewed employees’ personal Instagram profiles.

The CBI confirmed it had not considered that the complaint merited a disciplinary process, but as soon as it was contacted by the Guardian, it mounted an independent investigation and Danker stepped aside pending the result.

Within weeks, the heat on the CBI stepped up significantly when more than a dozen other women came forward citing various forms of sexual misconduct by other senior figures at the 300-strong organisation, including one who alleged she was raped at a staff party, and a “toxic culture”. These claims were unconnected to Danker and the original allegation, but the damage was done: on 11 April the director general was dismissed with immediate effect.

Danker got on the front foot with his response and a qualified apology, saying in a statement on Twitter: “I recognise the intense publicity the CBI has suffered following the revelations of awful events that occurred before my time in office. I was appalled to learn about them for the first time last week… I was nevertheless shocked to learn this morning that I had been dismissed from the CBI, instead of being invited to put my position forward as was originally confirmed.

“Many of the allegations against me have been distorted, but … I recognise that I unintentionally made a number of colleagues feel uncomfortable and I am truly sorry about that.”

He then took the risk of an interview with the BBC after his dismissal, saying he had been made “the fall guy” for the wider crisis and denied using sexual language or having physical contact with employees.

In the meantime, the government and the opposition Labour Party suspended engagement with the lobbying group, the allegations triggered an exodus of members including Meta, John Lewis, Aviva, AstraZeneca, PwC, Virgin Media, National Grid, NatWest, BT, BMW, ITV and Unilever, and the CBI halted all policy and membership activity. There were mutterings about the CBI having to change its name; since that hasn’t yet happened, there’s no telling whether that would be enough to distance a “refreshed” organisation from the unsavoury legacy of recent times.

The fallout continued: in September the CBI’s annual general meeting was cancelled as a £3m cashflow shortfall prevented the body from presenting its financial statements to its remaining members. The rearranged AGM, in December, was deeply uncomfortable, with concerns raised about the CBI’s governance and a lack of transparency, despite president Brian McBride saying new HR policies and procedures had been introduced and the CBI had taken “decisive action to strengthen our culture, recommitting to our mission to ensure sustainable growth for the benefit of society.”

Simon Neville, head of media strategy at SEC Newgate UK, says the difference between McBride’s and Danker’s approaches was notable: “From a comms perspective, Danker was quick to speak out and gained some sympathy as a “fall guy” for the far more serious allegations that he was not linked to. However, chairman McBride faced greater criticism over his failure to speak publicly once the allegations were public.

“He eventually granted an interview to the FT – a newspaper likely to be read by CBI members but not the broader public – making it clear he wanted his message to be seen by those businesses that had quit, rather than the wider public and staff who felt workplaces must improve.”

The CBI scandal is far from over. As well as the as-yet unresolved sexual misconduct allegations, this case goes beyond cultural, leadership and financial issues at a previously-deeply respected organisation that was established by Royal Charter in 1965 and has always had close links with the government and the opposition, not to mention a membership that included almost every major business in the UK. For the CBI, this is a true existential crisis. — Maja Pawinska Sims

11. Adani’s Hindenberg moment

One of India’s biggest companies, apples-to-airports conglomerate Adani, found itself facing an immense crisis when US investment firm Hindenburg Research published a forensic report alleging fraud and malpractice at the company, which boasts close political ties to the Indian central government.

Adani’s firms lost $110 billion in value in a matter of days, with the eponymous founder’s own wealth halved to little more than $61 billion. 

Adani denied all the allegations, publishing a 400-page rebuttal that described it as a “calculated attack” on India. But he also calmed jittery investors by diluting the family’s shareholding, consolidating operations and paying off loans backed by stock. 

"The Adani Group publicly did two things," says Promise Foundation founder Amith Prabhu. "They responded to the report with a 413-page response in which Adani Group said the report was driven by 'an ulterior motive' to 'create a false market' to allow the US firm to make financial gains. They also released a 90-second video of the Adani Group CFO Jugeshinder Singh refuting the details in the report."

The comeback strategy appears to have worked. Earlier this month, the Supreme Court dismissed a demand for a special investigation into the alleged wrongdoings. Adani stocks have rallied, while a $5 billion share raise is enabling further investment and growth.

"Time will tell how things shape up but for now things are better than they were last January," says Prabhu. "The three lessons for PR professionals from this crisis are:
1. You never know where a crisis can come from. Always be prepared
2. Using emotional symbols like the national flag as the backdrop in the CFO video are smart methods to evoke general support and also deflect
3. A general rule of crisis communication is to accept or deny. In this case the choice was made to Deny, Deflect, Defy and Deviate, which worked for it." — Arun Sudhaman

12. Zara’s Gaza-themed display

At a time of war, amid an unfolding humanitarian crisis in Gaza, fashion major Zara decided it would be a good idea to launch an advertising campaign that appeared to draw heavily on the Middle East conflict.

Once the outrage began, it seemed relatively clear that Zara was unprepared for the backlash, despite operating in a highly-politicised environment in which current events are increasingly divisive. “Companies need to prioritise preparation to protect perception,” says Tamara Littleton, CEO at The Social Element. “More than anything, this means having diverse points of view in advertising and marketing production and in the review process. I appreciate that campaigns are developed months in advance, but having a diverse team who are empowered to challenge the direction leads to people asking the question ‘is this still ok?’”

“Of course, Zara didn’t intend to cause offence with its recent campaign, but with tens of thousands of comments and many official complaints later, it has,” points out Littleton. “What the business does after that becomes critical. If people perceive offensive content within a campaign, the brand must live with that, accept it, remove the offending image, and apologise.”

Instead, Zara probably made things worse by claiming the image did not depict war, and implicitly blaming those who were offended. The company’s statement — “we reaffirm our deep respect for everyone” — did not exactly mollify matters, described by Littleton as a “very woolly line that means nothing.”

The lessons, accordingly, are clear. When things do go wrong, brands take further risks by prevaricating rather than expressing genuine contrition and taking matters seriously

“Critically, backlash needs to be built into any communications plan,” says Littleton. “This means incorporating crisis and scenario planning, monitoring tools and even simulations into your strategy. Sometimes it’s also a case of prioritising long-term brand building by taking a short-term hit. Losing money on a campaign that’s going to cause offence is a better outcome than losing your reputation. And if it does go wrong, be empathetic, be human and be quick. Own up to your mistakes and be serious and genuine in how you can do better.” — Arun Sudhaman

13. The BBC’s two-footed tackle of top talent

The 101-year-old BBC is the oldest, biggest and still one of the most respected broadcasting institutions in the world. Last year, however, its credibility was repeatedly called into question, not just because of perennial accusations of political bias (in both directions) or the annual debate of whether it is worth the licence fee paid by viewers, but because it spectacularly failed in its handling of two separate incidents concerning its top-tier talent.

The first, in March, involved its highest-paid presenter, Gary Lineker: former England football player and long-time host of the ‘Match of the Day’ Premier League highlights show on Saturdays, which routinely attracts 4m viewers. Lineker – a prolific and often outspoken user of Twitter (now X) on themes beyond sports commentary – had criticised the Conservative government’s controversial asylum policies in a tweet to nearly 9m followers, likening the language used by ministers about asylum seekers to “that used by Germany in the 30s”. In turn, he was attacked by MPs, including home secretary Suella Braverman, and the right-wing media.

The situation quickly escalated: after initially saying it would have a “frank conversation” about its star’s use of social media, two days later the BBC very publicly suspended Lineker on the grounds that he had broken its impartiality guidelines. In solidarity with Lineker, his co-hosts Ian Wright and Alan Shearer announced they would not show up to present Match of the Day either, leaving the BBC in the embarrassing position of having no hosts for its flagship sports show. Faced with an effective strike and with no-one else willing to step in, the organisation then said the show would go ahead that weekend with no presenters or commentary. By Monday, it had U-turned and reinstated Lineker without requiring him to make any concessions in his use of social media, which enraged the haters even more.

The second incident came in July, when The Sun tabloid newspaper alleged that an unnamed “senior BBC news presenter” had paid a young person for sexually-explicit photos, instigating a social media rumour frenzy about the identity of the mystery broadcaster. Days later, the wife of Huw Edwards – the lead BBC news anchor and its best-paid journalist, a man who was so much of a national treasure that he had been selected to announce the death of the Queen to the world just months earlier – had confirmed he was the man concerned and said he was having hospital treatment for mental illness.

Edwards had quietly disappeared from the airwaves the previous week, when he was due to host a BBC Proms programme, and has not returned. Lawyers on behalf of the young person concerned rubbished The Sun’s explosive story, saying there was no illegal behaviour involved. The BBC itself covered the story in minimal fashion, and has been quiet since, pending the results of an internal inquiry which has only highlighted questions about its own governance and whether a blind eye was turned to other behaviour by Edwards. To date, there has been no announcement about Edwards’ status at the corporation.

Andy Barr, founder and CEO of digital and crisis specialist agency 10Yetis, says both scandals showed how “achingly slow” the BBC is to react to stories that involve itself. “Not only were we faced with baffling television pictures of BBC journalists stood outside the – checks notes – BBC HQ saying that no comment was being made by the people inside, but we also saw just how much the BBC bosses don’t learn from the media training that their own journalists often tout as freelance gigs.”

Indeed, Craig Oliver, the former BBC news executive and former prime minister David Cameron’s communications chief, described the reinstatement of Lineker at the time as a “capitulation” by the corporation: “I think what’s happened here is Gary Lineker 1; BBC credibility 0,” he said. “The reality is the BBC today has announced it will have a review of its social media guidelines. In fact, it needs a review of how it handles crises like these.” And writing about the Edwards incident, former head of BBC news Roger Mosey said the coverage of scandals involving its own celebrities was “the BBC’s editorial blindspot”.

Barr says: “In crisis communications terms, when working with global brands of this size and stature, we always talk about the importance of creating ‘wiggle room’ and the value of not backing yourself into a corner. With both of these stories, the BBC failed to do this. I think all of us in the industry were really taken aback by just how on the back foot the BBC was.”

One defensive tangent that Barr was surprised did not emerge from the BBC during these moments was highlighting how some of its biggest detractors had a vested interest in criticising it. “People like Alistair Campbell set the benchmark many moons ago about the importance of a rebuttal team to set the record straight on fake news and the BBC seemed to drop the ball on this part too,” he says.

In conclusion, Barr says: “I think, most importantly, the BBC may have lost sight of the fact that real people, with real feelings and real issues, were involved in these stories and when this gets lost in the narrative, it is always hard to recover, no matter which crisis comms expert you have in your corner.” — Maja Pawinska Sims

14. A private bank and a very public individual

Coutts, the UK-based private bank for the very wealthy, probably has serious regrets about picking a battle with Nigel Farage, the vocal, publicity-loving former leader of the UK Independence Party (UKIP) and cheerleader-in-chief for Brexit. When Farage publicly called the bank out last July for closing his accounts with no explanation, the action – and a clear clash of values and communication styles – resulted in immense reputational, leadership and fiscal damage for the 325-year-old bank.

Initially, Coutts said Farage had been ‘debanked’ because he had fallen below the financial threshold required by Coutts to hold an account: £1 million in borrowing or investment, or £3 million in savings. However, an information request by Farage uncovered internal documents calling Farage racist and xenophobic, implying the accounts were closed for political reasons.

The unfolding situation is described as “one of the most divisive brand crises of the year” by Kate Hartley, the co-founder of crisis simulation company Polpeo. “Farage’s views were at odds with Coutts’ position as ‘an inclusive organisation’ (inclusive, presumably, as long as you have a few million quid in the bank). Cue endless media articles debating whether banks can close accounts for no reason, and mostly missing two critical points: it’s a private bank for wealthy individuals and can do more or less what it wants; and Farage was offered an alternative bank account with NatWest, Coutts’ parent company,” she says.

Hartley says that while Farage was “hardly thrown to the dogs”, he used the situation fully to his own advantage. It wasn’t helped that Coutts’ crisis machine was practically non-existent: “It did a terrible job of telling anyone what was happening. Dame Alison Rose, who was then the head of NatWest, told a BBC journalist his bank account was closed for ‘commercial reasons’, implying he didn’t have enough money to be a Coutts customer, which is clearly a breach of privacy.”

The debacle cost Rose her job and NatWest around £1 billion in market value. Coutts then did a complete U-turn and offered Farage his accounts back, which rather undermined its argument for debanking him in the first place. Peter Flavel, head of Coutts, resigned 48 hours later, while Farage – always up for more drama – called for the resignation of the entire board, and then threatened to sue.

A review by Coutts, conducted by Travers Smith and with findings published in two phases in October and December, prolonged the mess even longer and gave Farage even more air time, as he proclaimed the report was “mealy-mouthed”. The report found that Farage had been treated unfairly – leading to a sort-of apology from Natwest Group chair Sir Howard Davies – although it concluded that the closing of his account was lawful and predominantly commercial.

“So was this a scandal about values and discrimination, as Rishi Sunak said it was? I think the real question is why do we care?” says Hartley. “Coutts’ whole set up is about discrimination – it’s a private bank for the very rich. This was a publicity machine for Farage ahead of his appearance on ‘I’m A Celebrity, Get Me Out Of Here’ that took out the head of two banks, damaged NatWest’s share price and has kept Farage on the front pages every time there’s a banking story. The only winner here is Farage.” – Maja Pawinska Sims