Stories and Strategies Podcast
Episode 59
Guest, TJ Winick
Published November 13, 2022
Listen to this episode
Doug Downs (00:09):
In October, 2017, actor Kevin Spacey was right where he wanted to be. Stage 33 on the CBS Television City law in Los Angeles. Participating in a recording of the 50th anniversary of the Carol Burnett Show in front of a live audience, the 84 year old Burnett, a longtime friend who trusted Spacey, introduced him as an Oscar-winning guy and everyone’s favorite president. Just a couple of weeks later, Spacey’s career was in free fall. Amid mounting allegations of sexual harassment and assault, he was edited out of that TV Special Two Academy Awards, a Tony Award nominated for 12 Emmys in a flash. It was all erased a lifetime to build a reputation, an instant for it to be destroyed. Warren Buffet is often credited with saying something like that. Perhaps his reputation precedes him because he was only repeating what Will Rogers had said 60 years earlier who was only repeating what Benjamin Franklin had written a couple hundred years earlier. In the example of Spacey. Surely he deserved to have his reputation trashed. It wasn’t one mistake only that he’d finally been exposed. But for many organizations and individuals, it can be one mistake. A lifetime invested in being seen as good can come crashing down.
(02:12):
My name is Doug Downs Music Off the top, the theme from the Carol Burnett Show, composed by Joe Hamilton and the theme from House of Cards composed by Jeff Beal. My guest this week is TJ Winick joining us from Boston. Hey TJ.
TJ Winick (02:26):
Hey, Doug. How are you?
Doug Downs (02:27):
I’m good. How are things? So we’ve got about a foot of snow outside in Canada’s Rocky Mountains right now, and we’re recording in November. How are things in Boston?
TJ Winick (02:37):
Well, Doug, I have to tell you it’s about 65 degrees Fahrenheit, which of course is unseasonably warm. But you know what the saying is when it comes to New England weather, Doug, if you don’t like it, wait a minute,
Doug Downs (02:51):
Wait a minute. And at least you’re not having to watch the Yankees play in the baseball playoffs. They’re long out of it by now.
TJ Winick (02:57):
Yeah there is a little bit of solace there. Absolutely.
Doug Downs (03:00):
Exactly. TJ, I really enjoyed your book. Thank you. Reputation Capital, how to Navigate Crises and Protect Your Greatest Asset. The book is all about the value of banking, reputation, capital, that Bank of Goodwill. So let’s talk about two companies off the top, both of whom have experienced crises. Disney, which does have deposits in that Bank of Goodwill longstanding company and Meta Facebook, huge company, but hasn’t been around as long and definitely doesn’t have at least nearly as much saved in that Bank of Goodwill. Tell me about those two.
TJ Winick (03:42):
And they both really have experienced crises of their own this year. You mentioned Walt Disney, I think you’d agree with me. They’re one of the most trusted family friendly brands in the world, right? Built over decades through theme parks, movies, merchandise, et cetera, that helped them weather a pretty substantial crisis earlier this year that I’m sure your listeners heard about. It ignited when a number of Orlando employees expressed outrage that their c e o, Bob Chapek didn’t publicly condemn a piece of Florida State legislation. Its opponents call that don’t say gay bill. In the first statement, which was heavily criticized. Chapek essentially tried to avoid the issue writing that Disney felt its real influence was through inspiring content. And unfortunately, he had to end up apologizing to his L G B T Q employees writing that, you know, needed me to be a stronger advocate and that he apologized.
(04:38):
And in response Florida’s governor, who is a proponent of the legislation, accused Disney of taking a rather woke position and revoked special tax and self-governing privileges enjoyed by Disney for decades. So regardless of how you feel about the Florida legislation, and I try to separate the politics from the brand response in all of these cases, it was a political lightning rod from the very beginning and when the Chapek and Disney really should have adequately prepared for. And while other lesser brands may have suffered a crippling reputational hit as a result of such a crisis. I think safe to say, the strength of the Disney brand remains strong due in no small part to their strong reputation.
Doug Downs (05:18):
And the fence is no longer a safe place for a lot of corporations.
TJ Winick (05:22):
Exactly.
Doug Downs (05:23):
And then Meta, Meta Facebook, what happened with them?
TJ Winick (05:26):
Yeah, I mean, I don’t think any single brand has so consistently been putting out reputational fires in the past five years as the company now known as Meta, there’s been the failing to keep user information secure. There’s been the allowing for the spread of disinformation, the facilitating the livestream of a mass murder to name just a few. And those alone are bad enough, but it’s how Mark Zuckerberg, the c e o and the brand have responded to those scandals in public statements, interviews, congressional hearings that really could not lower their reputation any further. But it does seem like the constant and consistent inability to accept responsibility or project humility in addition to them going all in on the metaverse, r and d obviously has really begun away at their reputation and their profitability. And the flashing red lights are numerous right now for them. Of course, Meta recently saw its second straight quarter of decline in revenue, and right now its stock is at its lowest value since early 2016.
(06:28):
So perhaps a time for some folks to buy the company is reportedly now paying what’s being referred to as a brand tax to tech workers who are afraid that even working there could jeopardize their future job prospects. We know that the FDC wants to reverse Facebook’s acquisition of Instagram and WhatsApp arguing that this would represent a monopoly. And in January of this year, a judge did allow that case to move forward. And then finally something that many of your use listeners, excuse me, will have heard about. There’s significant risk due to the possible reform of Section two 30 of the Communications Decency Act. That’s the law that protects these companies from being held legally liable for user content. So if something terrible is done as a result of a social media post, those companies cannot be sued. Well, they could be some serious reforms there, and that could definitely impact how not only Facebook or Meta, but all of their fellow social platforms look to make changes in the years ahead.
Doug Downs (07:29):
No kidding, I didn’t know about that. That’s definitely something to follow. So Reputation Capital in your book, you walk through seven recommendations for how I can make deposits in that bank. Walk me through those seven at a fairly high level.
TJ Winick (07:46):
So we talked about crisis and issues management, which is somewhat defensive in nature, but building brand equity is really about proactive public relations and brand building. It helps establish and cultivate trust between a brand and its key audiences, whether that’s customers for a company, patients in a hospital, or students. If we’re talking about higher education I’m going to run through them. This is what most organizations should think about doing to build trust if they aren’t already just ticking them off. Prioritizing workplace culture, it’s the most important stakeholders. They’re internal, they’re brand ambassadors, they have the most skin in the game. Listen to critical feedback. There are lessons to be learned from critics. Don’t have a knee-jerk reaction and assume they’re wrong. Become thought leaders in your industry. It’s not enough to just take part in the discussion happening within a particular industry. You want to be one of the leaders who sets the agenda.
(08:41):
So be a presence, whether it’s earned media or industry awards or conferences. Make sure you’re cultivating your online audience, and that means not ignoring those social channels followed by your key audiences. Because we all know that when the excrement hits the air conditioning, that those platforms can become the defacto customer service number for many of your users or customers. And they’ll want to be talking with folks who they know are watching closely and are super responsive. Also, we tell our clients they need to produce content. Every organization is now its own media company. Think about white papers, blogs, infographics, industry surveys,
Doug Downs (09:26):
Podcasts.
TJ Winick (09:27):
Podcasts. Thank you. Absolutely. Podcasts. And then the last one is exercise Corporate citizenship. You know, wanna choose which causes to support with a sense of purpose. You know, want to ask yourself how the mission of your organization can tie into the mission of the nonprofit or the cause that you are advocating for. So in the book I talk about real estate developers can help figure out the homelessness issue. If you are a restaurant or a food service provider, you can think about how you can help feed the hungry. So giving to someone a cause that not only will your circle of stakeholders appreciate, but that really is focused on the mission at hand and will make an impact. I did wanna mention one last one, which is recommending that people choose the highest value, a highest value for their company, such as safety, trust, truth or responsibility and then figure out how to operationalize it. There are too many companies that say, our only value is profits. And while I think we take that for granted I do think that coming up with safety or trust or truth and responsibility and then putting policies in place that ensure that that’s what stakeholders understand about your organization is critically important.
Doug Downs (11:05):
That note about critics that one really stood out to me because I’ve worked within incorporation. Every big company is going to have critics. It’s part of the road to success is eventually there will be critics. It’s just too easy to say, well, they’re just going to criticize. And in fact, sometime in politics, their job is to just criticize. The challenge with ignoring critics is if I don’t agree with you as part of the audience, I therefore must agree with your critic, so to speak. Can you expand a bit on that? Not just tolerating critics, but embracing your critics, really seeking to understand those who are criticizing you.
TJ Winick (11:50):
Well, I think I have a one case study in that, which I think is really relevant, which is John Mackey is the CEO of Whole Foods. And he was not accosted, but he was approached by a representative from an animal rights group back in round 2014, I wanna say, that accused whole foods of essentially not treating waterfowl humanely. And so what John Mackey did was he thought about it, he asked for the woman’s email address and phone number contact information. They actually stayed in touch over the course of several months. Mackey did his research. He subsequently became a vegan because of some of the things that he was learning through this critic. And in the end when he gave interviews, he said, what? I realize these groups were right. We thought we were doing the right thing, but we weren’t. And now we’re proud to say that we have the highest standards in the industry when it comes to the humane treatment of animals.
Doug Downs (13:14):
That’s outstanding.
TJ Winick (13:15):
Yeah. So I mean, that was someone who really internalized the constru constructive criticism that others may have just taken the number, thrown it in the trash, handed it to an assistant written some sort of proforma letter letter. Thank you very much for your input. It means a lot and we appreciate your support and never really would’ve done anything. But he really took the opportunity to double down and to make sure that he was not only listening and that Whole Foods didn’t just become a leader in the area, but really a trendsetter and a trailblazer and someone that other companies in the supermarket or food service industry look to when it comes to the best practices
Doug Downs (14:17):
Podcasting. Now there’s an idea, you listen to podcasts, maybe a podcast is right for you or one of your clients stories and strategies is a full podcast production company with clients in the United States as well as Canada, great Britain and Australia. If you wanna chat, send me an email, Doug stories and strategies.ca and we’ll set up that chat. Let’s talk podcasts
(14:52):
Simply because we all love rubbernecking when there’s been an accident. I want to talk briefly about a few mishaps involving large brands, and you expand on all of these in your book. Tell me first about when Apple released the iPhone four.
TJ Winick (15:09):
So this was in 2010, and they released the iPhone four and customers complained almost immediately about signal issues. Instead of owning the faulty antenna problem, Apple’s response actually was to essentially blame the users claiming that it’s your fault. Yeah, exactly. Gripping the phone is going to result in some weakness of its antenna performance. Steve Jobs actually dismissed the difficulty experience by his customers as a non-issue and complained that when companies get as big as Apple has, that folks just wanna naturally tear them down. But he and the company finally did get the message pun intended in the end apple actually conceded that the iPhone four is a reception problem resulted from a hardware flaw. They gave all of the iPhone four users a free case, which seemed to solve the reception issues, and they eventually settled a class action lawsuit on the matter.
Doug Downs (16:00):
Oh, good for them. I think Lululemon had something similar right around the same timeframe where the fabric on one of their pairs of pants was wearing off and the response from the leader at the time who’s no longer the leader was, well, some thighs are just so big they rub against each other and that’s what wears out the fabrics. Nicely done.
TJ Winick (16:22):
Yeah, I covered that as a journalist and it was, yeah, he did say something like, not all women’s bodies work for this product. That’s right. And in the following week, Doug, he put a apology on YouTube and you would think that he would’ve apologized for making that statement.
Doug Downs (16:39):
Did he double down on it?
TJ Winick (16:41):
He didn’t exactly double down, but what he did apologize for was how sad many of his employees were over the controversy. So he never actually directly apologized to the customers who he essentially then offended twice.
Doug Downs (16:57):
Stay classy. Okay. Tesla, after the 2016 death of a Florida man when Tesla’s autopilot system didn’t work.
TJ Winick (17:06):
Yeah. Now, Doug, I know it’s surprising that Elon Musk found himself in the middle of some controversy, but right following the 2016 death of a Florida man because of the autopilot system, didn’t detect a truck crossing in the highway. Musk use social and traditional media as he does to defend the safety of the autopilot system. Nothing wrong there, you have to defend your brand, but the issue is that there was little empathy for the man who lost his life. Instead, what the car company really focused on in their messaging and in their blog was Tesla calling the man’s death a statistical inevitability, and that it was essentially the first known fatality in just over 130 million miles of the autopilot system. The other issue was it took Tesla a month to disclose the accident. So that came under scrutiny mostly because during those weeks Musk sold 2 billion worth of Tesla stock. Right. So the takeaway here is really that whenever a fatality is involved, the right response is to lead with compassion and transparency and not defensiveness or go on the attack. There will always be time to explain what happened, but if you come out of the gate and you really seem toned, tone deaf as to the tragedy that just occurred, it’s not a good look. And it will take the brand a little while to bounce back.
Doug Downs (18:37):
And last one I wanna chat about is United Airlines.
TJ Winick (18:40):
Yes. So I’m sure your listeners remember this one. This was in 2017 when a passenger, Dr. David Dow, was forcibly removed from an overbooked flight in Chicago.
Airline nat sound (18:53):
Oh my God. Oh my God. Oh my God.
TJ Winick (18:58):
Video of his bloodied face while he was screaming, being dragged down the aisle by airport security was caught on cell phone video and viewed millions of times on social media. United’s response to the event was so poor, actually dedicated a whole chapter in my book to this particular issue. So first United apologized, but only for overbooking, not even mentioning the passenger. Then they did mention the passenger, but insisted he was at fault and that their flight crew had acted properly. When they called security, then they apologized and about 12 to 24 hours would pass between each of these responses. They then apologized for having him be reac accommodated, completely underplaying what anyone who watched the video could plainly see. It took United CEO Oscar Munez about three days to get their response right. But when Munez sat down with a good Morning America for the first time on camera above the incident, he did hit all the right notes and sounded genuinely remorseful. But I have to tell you, in those previous 72 hours, he and United really took a beating in terms of their stock price and also just in terms of public criticism and congressional oversight as well because he would be called before Congress, along with some of the other airline CEOs who had also found themselves in hot water for not similar incidents but other crises where passengers were at the center.
Doug Downs (20:37):
And there’s an example where I think what happened was the wrong thing. Sometimes a company is doing or has done the right thing, and I know this because I’ve worked in this world, explaining the right thing is actually hard. There is no magical sound bite. It comes from a different angle. It can take too long. You have an example in your book Robinhood, the Robinhood Crisis in 2021, a company that did the right thing but explained it at the very least, extremely awkwardly.
TJ Winick (21:10):
And your listeners may recognize the Robinhood name. It is a retail trading app that is believed to have democratized stock trading. And so back in January, 2021 there was a Reddit message board, which sparked an unprecedented trading frenzy of protest against the Wall Street establishment. Robinhood shut down at one point the trading of hot stock’s, GameStop and AMC theaters. And the reason they did this was that they weren’t capitalized at the time to post the collateral necessary to clear these trades. However and predictably this infuriated the very retail traders that Robinhood had built its reputation and on empowering users, alleged the shutdown unfairly benefited more prominent investors. And then c e o Vlad 10 compounded this outrage by not communicating about the decision until after an entire day of trading. And then when he did, he made matters worse by demonstrating, again, little empathy, little understanding of what people were feeling and spouting what amounted to a hodgepodge of financial jargon. He talked about the SEC net capital requirements and clearinghouse deposits, all of which was technically accurate, but it didn’t speak to how his users were feeling. He didn’t get to the emotion of the issue and as a result of its decision and how he communicated to his community about it, 56% of his account holders considered leave leaving the platform in the immediate aftermath of the debacle. They did not. There were folks who left, but it was nowhere near that number of users.
Doug Downs (23:04):
Really appreciate your time today, tj. Thanks for this
TJ Winick (23:07):
Doug, Can’t thank you enough. Really appreciate it.
Doug Downs (23:11):
If you’d like to send a message to my guest, TJ Winick, the address is in the show notes, stories and strategies as a co-production of JGR Communications and Stories and Strategies podcasts. We’re hoping you might leave a rating for this podcast on either Apple or Spotify. Reviews are also very welcome. I want to thank Deborah Murphy from the Alberta Beef Producers in Red Deer, Alberta. She left a fantastic review, not on Apple or Spotify, but on LinkedIn and connected me to it and a bunch of people saw it. That is amazing. Thank you so much, Debra. You can connect with us on LinkedIn or on Twitter, and the address is in the show notes. We’re also on Instagram more than anything else though. If you’d like this episode, would you do us a favor just like Deborah did, and tell at least one friend. Thanks for listening.