Brand Failures

The people behind a brand are its main ambassadors. If those people fall out
with each other, act illegally or make negative statements about their
products, then a crisis may quickly develop. This is especially true in those
cases where the people are the brand, as in the case of a pop group or a TV
personality such as Martha Stewart or Rosie O’Donnell (both of whom have
done much to diminish the value of their branded personalities in the United
States). It is also true when people at the highest level of the company are
caught acting irresponsibly.
The most obvious case of ‘people failure’ in recent times is that of the Enron
scandal, where fraudulent activities were associated with individuals at the
very top of the company. However, corruption is only an extreme and rather
dramatic aspect of people failure.
Sometimes brands can die as a result of the words that come out of the chief
executive’s mouth. For instance, the Ratner’s brand of jewellery lost its market
value overnight when Gerald Ratner declared his products were ‘crap’.
Whether or not this was a fair assessment was beside the point, the very fact
that he said it was enough to destroy the brand.
The real lesson is that no matter how much time, money and energy is
poured into a brand or corporate strategy, it ultimately depends on the
behaviour of individuals whether or not this strategy remains on track. The
higher up the individual, the more he or she is seen as representative of the
brand. To borrow a useful phrase from John Karolefski, former editor-inchief
of Brand Marketing magazine, ‘the fish rots from the head.’ In other
words, those with the most responsibility must act the most responsibly. ‘The
CEO must buy into and be part of the strategy from its inception,’ says
Karolefski. ‘The head of the company sets the tone throughout the entire
organisation. He or she will also be the most likely spokesperson for the
company and must be credible.’
Karolefski has also written lucidly about the Enron and related Arthur
Andersen scandals. ‘A critical element in these cases is that the crisis and the