Can A Business Thrive After A PR Disaster?

In life, it is often your reaction to a crisis that matters most, as this is often where you see what truly matters and what a person’s true values are when they are put to the test.

This is also true in the business world, as whilst a mission statement or outline of a brand’s values is often produced with the best of intentions, it means very little if the brand undermines them.

A particularly illustrative example of this is Google, which had the famous mission statement “don’t be evil” until it was removed in 2018 amid allegations of highly unethical conduct.

Where this matters most is following a PR disaster, where reputation management plans come into effect to fix the initial problems, make changes and help to stop any further harm whilst beginning the process of rehabilitation.

Famously, this was how Johnson & Johnson managed to navigate what became known as the Chicago Tylenol Murders.

However, there are other cases of businesses not only surviving but thriving following a PR disaster, and here are some very teachable moments.

How Did Pepsi Thrive After A Syringe Scandal?

Just a few years after the poisoned Tylenol, Pepsi faced its own crisis when hundreds of people reported that hypodermic needles had been found in cans of cola.

News stories reported on a wave of tampered cans with the same zeal as an epidemic, the FDA recommended pouring the cola into a glass, and some retailers pulled the second most popular soft drink in the world off the shelves.

All this time, however, Pepsi did not blink, because they knew and could very easily demonstrate that it was impossible for the cans to be tampered with at their source.

Eventually it was revealed to be a hoax, or a series of hoaxes where needles were placed into the cans after opening, and Pepsi had one of its best summers in years.

How Did Microsoft Survive The Red Ring Of Death?

One of the biggest ever PR disasters in computer games history was even described as a Tylenol moment by Peter Moore, the Microsoft vice president in charge when it happened.

Following the relative underperformance of Microsoft’s original Xbox, the follow-up Xbox 360 was a huge success following its launch in 2005.

However, almost as quickly as it was released, there were floods of reports of consoles that suddenly stopped working, flashing three red quadrant lights to indicate an internal hardware problem. Whilst failure rates varied, figures between 23 per cent and 90 per cent had been reported.

This began a PR disaster that would have tainted the Xbox brand overnight, but Mr Moore came up with an expensive plan to make it right with customers; they would allow any consumer to report a red ring issue, would ship a box with a return label and would either fix it or replace it for free for five years.

This would ultimately cost Microsoft $1.15bn, but CEO Steve Balmer immediately agreed to the decision.

Had this not taken place, the Xbox brand may have never recovered, but the response to the Red Ring of Death helped sales of the Xbox 360 and ultimately made the console the second most successful of the era behind only the Nintendo Wii.