The best brand leaders prepare to manage a brand crisis, before it hits, in order to protect their brands and businesses.
“One thing that most companies can be sure of is that at some point in their history, they’re going to face a crisis of some sort.” -- Jez Frampton, Global CEO, Interbrand
Hampton Creek, the company that brought us eggless mayonnaise, hasn’t had an easy road of it. In the last year, alone, they’ve been plagued by financial scandals, operational hi-jinx, fundraising challenges, and executive exodus. Then, came the letter that forms the crux of their business challenge – maintaining brand equity in the face of a product crisis.
What happened: A mysterious, anonymous letter arrived at Target headquarters, their largest retailer, alleging that Hampton Creek’s products were unsafe and mislabeled. While investigations were underway, the products were pulled from shelves, and even though the allegations turned out to be untrue, the damage was done, and Target ultimately severed the relationship. In a strategic move, however, Hampton Creek had been working behind the scenes during the controversy to rebrand itself to pivot away from the negative/messy history. The new brand launched just days before Target’s decision.
It remains to be seen what happens next but there are some lessons in this story about taking action in crises that brand leaders should note:
- Open your doors: Transparency is table-stakes in a crisis situation. “The first thing that you have to do is acknowledge that you were wrong”, says Jez. People don’t want to hear about what’s next until they know what’s happened and who’s responsible now. Brand leaders should manage the crisis publicly and manage the brand internally, working to craft strategic plans to shore up the brand post-crisis.
- Understand your equity: Brand can be a risk-reduction mechanism during periods of crisis. Humans can forgive strong brands faster; this is a challenge for start-ups like Hampton Creek (now, just.) who aren’t established enough to leverage brand strength.
- Be prepared to pivot: A solid understanding of brand strength/equity should help brand leaders identify the orange flags before they become red; and, importantly, when to take action. At some point, brand leaders may have to admit if not defeat, then a serious course correction – name change, rebranding, leadership change, etc.
- Make a big gesture: And stand by it. It takes courage, and preparation for repercussions. When change comes after a crisis, it might need to be big. Really big.
Hampton Creek’s CEO Josh Tetrick recently publicly discussed the controversies surrounding his brand in an interview with a food industry news resource, Food Dive. Read the interview here.
To learn more about managing brands in crisis, watch Jez Frampton’s interview, which is part of Interbrand’s Growth Series.