D&G gaffe reveals crisis response isn’t just job of PR

By Li Guowei Source:Global Times Published: 2018/11/26 19:43:40

Illustration: Luo Xuan/GT



 

After racist messages from Stefano Gabbana, one of the designers of Dolce & Gabbana (D&G), triggered outrage on China's social media, the Italian fashion brand issued its first statement claiming that its Instagram accounts had been hacked.

But Chinese consumers didn't buy it. And it wasn't until the end of the week that the two D&G founders officially apologized in a video.

The hacking excuse reminds me of similar tricks some companies have played to shirk responsibility by blaming interns, assistants, individual employees and hackers for their problems.

Crisis communication is a management process that reflects corporate values. The crisis response statement is an important downstream link in the management process, but it is now widely regarded as the responsibility of only the public relations department.

A few days ago, a netizen exposed unsanitary cleaning practices at more than a dozen five-star hotels in China. The public later saw an apology and explanation statements from the hotels' public relations departments, which failed to dispel public doubts about their hygiene standards.

In order to win public forgiveness, crisis communication requires deep reflection on corporate values and the price paid for wrongdoing, which cannot be done by the public relations department alone.

Frankly speaking, it is difficult to make entrepreneurs apologize. But when a brand's reputation is seriously hurt, an entrepreneur needs to have the courage to face the public.

On November 1, 20,000 Google employees from offices in 50 cities around the world went on strike to protest the company's handling of sexual harassment accusations against senior managers. After that, Google CEO Sundar Pichai sent an email to Google employees and was committed to making changes.

The CEO's reaction seems to have calmed the market. Google's share price fell from $1,085 on November 1 to $1,071 on November 2, but bounced to $1,108 on November 7.

Making apologies is not just the job of public relations, but also the responsibility of CEOs, which reflects corporate values.

In the D&G case, even if the fashion house could prove the hacking of its founder's Instagram account, a review of its corporate values is still justified.

Moreover, in an era when corporate crises occur every day and public anger can be easily ignited through social media, corporate reputation management requires not only the correct values and courage of CEOs but also a series of technical efforts.

A corporate crisis may happen due to political, product or moral problems. When the crisis involves one problem, it is relatively easy to deal with. The situation could become complicated if the crisis involves two or three problems. For example, the D&G crisis is a moral issue, while the hygiene scandal at the five-star hotels is both a product problem and a moral problem.

In fact, a product crisis is the most difficult issue for companies to handle, especially when it involves disputes over product quality. It may take several years to clarify the facts due to the time required for product inspection. In addition, it is also difficult for companies to resolve politics-related crises that involve national interests, such as South Korea's Lotte Group's land deal for the US THAAD missile system.

In China, it is also not uncommon to see another type of politics-related crisis, as some multinationals were found to have mistakenly referred to Hong Kong and Taiwan as countries.

For multinationals that have Chinese business, it is extremely important to abide by Chinese laws and regulations and to respect the country's sovereignty and territorial integrity.

A vice president of public relations of a multinational automobile company once told me that they spent six months formulating a handbook that gives detailed explanations for China-related politically sensitive issues involving maps, national flags and place names in both Chinese and English. The purpose is to provide a clear reference for colleagues in other parts of the world to avoid political mistakes when making China-related product descriptions and PPT documents.

Generally speaking, global luxury brands are not so localized in China as other multinationals in terms of management, brand strategy and creativity, which is why there are always differences in understanding between Chinese and foreign cultures.

According to a McKinsey report in 2017, Chinese luxury shoppers accounted for 500 billion yuan ($73 billion) in annual spending, representing almost one third of the global luxury market.

It is true that Chinese consumers like luxury products partly because of their foreign style, and sometimes their controversial characteristics.

But lessons should be drawn from the D&G incident. First, political correctness is a must. Insulting Chinese people is unacceptable and should be the bottom line for companies engaged in any business.

Second, luxury companies must be careful when it comes to national sentiment and cultural expression. Most multinationals are highly localized in management and show full respect to local political stances and cultural differences, but international luxury brands are perhaps an exception. The D&G incident is a reminder for them.

Third, the core of crisis management is to show the right attitude and take responsibility. In any case, corporate leaders need to stand up and face the public honestly and sincerely.

The author is president of VisionWe Consultants and former director of communications and brand for GE China. bizopinion@globaltimes.com.cn



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