One of the hallmarks of 2015 was the series of high-profile brand scandals. Most notable included the VW diesel emissions scandal, the FIFA leadership bribery controversy, and the demise of Turing Pharmaceuticals at the hands of its CEO, Martin Shkreli. In all cases, the brands in question failed to recognize the heightened transparency and accountability demanded on them in a marketing landscape connected through the web, social media and smart phones, and in each case leadership chose to mislead, deceive or cheat their way to success rather than execute the hard work of change. The ultimate cost to these brands has left many marketers and consumers scratching their head as to how such strategies were ever considered wise or acceptable. To answer that question, it’s important to identify the self-deceptions that consciously or unconsciously allowed these brands and their leadership to make such decisions; keep these in mind or they could be the undoing of your own brand.
Self-Deception 1: Leadership is untouchable.
Reality: Over the last several years, the corporate tower and boardroom doors have been repeatedly scaled and swung open exposing brands and leadership at the highest levels. Whether you’re a billion-dollar multi-national like VW or a cultural darling like American Apparel, leadership cannot escape the consequences of their actions.
Self-Deception 2: Employees won’t care.
Reality: Even if a brand does a masterful job of manipulating its marketing to disguise its behavior, its executives and/or employees will quickly recognize the truth and take it on themselves to expose the brand (as happened in the case of VW).
Self-Deception 3: Consumers won’t find out.
Reality: Activist consumers and the media, emboldened by years of brand scandals, delight in drilling down behind a company’s image to expose any contradiction between what it is saying and what it is doing (recent examples include Whole Foods, Amazon and McDonalds).
Self-Deception 4: Purpose doesn’t matter.
Reality: While the vast majority of companies still lead with their self-interest under the guise of serving their shareholders, it is impossible to deny the research that shows the groundswell of consumers demanding greater responsibility from brands in return for their loyalty, goodwill and sales.
Self-Deception 5: Doing good won’t make a difference.
Reality: The good work of a brand doesn’t have to be shown (See 2015 Reputation Dividend) Report) to not only positively impact the lives of others but to help build the bottom line of the brand by enhancing the company’s reputation, inspiring employee engagement and advocacy, and driving consumer sales and recommendations.
Self-Deception 6: Other’s behavior won’t affect us.
Reality: Now that the media and consumers are looking behind a product brand to its parent company, or behind a product to its suppliers, there is nowhere to hide from the misbehavior of the brands you partner with (as Nike and Adidas discovered during the FIFA scandal).
Self-Deception 7: Doing good is just a phase.
Reality: With the world facing so many compounding social crises (from climate change to loss of biodiversity to ocean acidification) and consumers being made ever more aware of who’s responsible, the expectation of brands to do good is only going to rise (for example, the UN’s Sustainable Development Goals serves as a powerful example of the new narrative for the role of business in doing good).
Self-Deception 8: No one will get hurt.
Reality: Whether it’s leadership or employees losing their jobs, the impact of bad products on individuals’ health or the environment, or whether the damage is discovered today or several years in the future, the cumulative consequences of irresponsible behavior are unavoidable, especially as we now find ourselves on a planet of limited resources and more than 7 billion people.
Self-Deception 9: We can fix it later.
Reality: Sadly, the scale of the challenges we face has left many economists and scientists deeply worried that the effects of irresponsible business behaviors are irreversible, particularly when it comes to the air, water and food we share.
Self-Deception 10: You don’t care.
Reality: As leadership or employees with companies, it’s tempting to excuse away irresponsible behavior as a function of the “company” or “leadership” or “another department” when, in truth, every one of us, as individuals, cares about our planet, the future and the impact that our investment of time, skills and effort has on others, so that in turn our own lives have meaning.
There is no doubt corporate scandals will continue as different companies viciously try to game the system, trick the public or shortcut their way to financial success. But the expectation for more responsible behavior and the penalties for failing to do so – legally or reputation-wise – will continue to increase as the social and environmental crises our planet faces compound. In response, brands and their leadership must expose outdated self-delusions and execute the hard work of change to be more responsible for what they make, do and say. In so doing, they will not only mitigate the risk of a costly scandal, they will position themselves for long-term leadership.