Adidas: Crisis Handling Isn't Over-the-Top... / Nike Less of a PR Heel When it Comes to Response
Timing is everything, a story of shots taken and missed
Having just returned from France where World Cup fever was at its height, we couldn't resist taking a look at the international crisis revolving around - of all things - soccer balls. We don't argue that a lot more people were focusing on Ronaldo and his French competitors than got hot under their V-necked collars about the little white leather things they were kicking around. But as far as the media goes, the story was in the controversy surrounding manufacturing of the official World Cup soccer balls.
Adidas is the lead sponsor for FIFA, the organization that hosts the World Cup, and has exclusive rights to provide hand stitched balls that carry the "World Cup" logo. Nike is its major rival, sponsors of the Brazilian team among others, and long under fire from Doonesbury (of cartoon fame) and assorted child labor activists for the conditions under which the balls are made. Some 80% of all soccer balls are hand stitched in Pakistan.
In early July, at the height of World Cup fever, a former Chinese prisoner claimed that he and his fellow prisoners were forced to sew together "World Cup" soccer balls in a prison. Adidas denied the rumor and eventually traced the problem to counterfeit balls, but not before the media mob had dredged up every old child abuse statistic and severely soiled the Adidas brand name. Nike was almost never mentioned in the ensuing coverage except to note that they had already addressed the abuses.
What was interesting to us was how (and why) Nike emerged relatively unscathed. Part of Nike's immunity may have come from a move that Image Patrol wished it had thought up itself. Nike CEO Philip Knights' self-deprecating but illuminating speech in the lion's den of the National Press Club in May. Knight brought with him a virtual army of managers, civil rights monitors, etc., to confront the charges directly. It looks like this bold gambit may have succeeded.
Here are our scores:
Adidas
Headquarters Internationally: Herzogenaurach, Germany
No. of Employees Worldwide: 7,993
1997 Net Sales Globally: $3.7 Billion
No. of PR Staffers in U.S.: 7
| ADIDAS | |||
| Criteria | Grade | Comments | Advice |
| Extent of coverage | C | There was tons of it, since most of the media seemed to be in Paris at the time. Until it could show that the balls were indeed counterfeit, the story was front page news all over the world. | Not much you can do, when you have a large number of journalists looking for a story except get the truth out as quickly as possible. |
| Effectiveness of spokespeople | D | Not that the PR guys did a bad job; in fact, they were pretty good, but when you're up against the competition's CEO, it would have been better to have a higher ranking official addressing the media. | Whenever possible, ensure that it is your CEO who is the spokesperson during a time of crisis, not the PR guys - unless of course your CEO is totally incompetent with the media. |
| Communication of key messages | C | Despite being somewhat hamstrung by their lawyers, Adidas was able to get across the message that it does have some control over their manufacturing process. Unfortunately, when the activists are active, they tend to get control of the messages and have the last word. | Adidas' response, while businesslike, did little to convey an image of care or concern. Unfortunately, it ignored the standard rule - express concern for the victims, whether or not they're yours. |
| Management of negative messages | C | All things considered, Adidas responded quickly and was able to minimize the damage. But a great deal of negative messages were communicated in the first 24 hours. | Rule #1 - express concern while checking into rumors. |
| Impact on customers | D | This only added fuel to the anti-big-name sports brand campaigns. One high school athlete stated that she intentionally did not wear brand names. | Turn the boycott frenzy around and emphasize how no-name brands have less control and are more likely to be manufactured by child labor. Perhaps only branded products have the true power to create positive change. |
| Impact on investors | N/A | N/A | Family-controlled company. |
| Impact on employees and prospective employees | B | With luck, every partner and subcontractor will know that Adidas is checking up on them. | In today's global climate, remember that many of your employees and managers don't live in the U.S. - and make sure you know how the story is being portrayed in the local papers, wherever they are. |
| Overall score | C+ | Certainly not bad crisis management, but there was room for improvement. | Proactive is always better than reactive, and Adidas could have done more to express their concern for the issues earlier in the crisis. |
| NIKE | |||
| Criteria | Grade | Comments | Advice |
| Extent of coverage | B | They just can't get away from it. | When the story just won't go away, the best thing you can do is to get out in front of it - as Nike demonstrates. |
| Effectiveness of spokespeople | A | I'd like to clone Phil Knight and send him out to every one of my crisis clients. He is a great spokesperson and his humor, despite a sensitive topic, couldn't help but win over the crowd. | If you've got a great CEO spokesperson, flaunt it. |
| Communication of key messages | A | The National Press Club speech got all of Nike's positions down, and they seem to have carried through the subsequent crisis. Nike was positioned as already addressing the soccer ball problem when that story broke. | By being proactive and getting its messages out up front, Nike was able to ensure that the messages were carried through in subsequent related crises. As a consequence, the press found a new "bully" to expose. |
| Management of negative messages | A | By addressing all the issues up front, Nike essentially defused any potential negative messages. | The more you get ahead of negative messages, the better. The boycott message is still out there and will be for a while, but with this effort Nike may have redirected it toward other companies. |
| Impact on customers | A- | The boycott message is dying down. The activists immediately announced they would turn their attention to other manufacturers. Some association with child labor will remain for a little while. | There's always a delay between good PR and customer behavior but even I - a hard core Reebok fan - would now buy Nike if they fit me. |
| Impact on investors | A | This went a long way toward reassuring investors that the brand is safe. Since mid-June, its stock has risen far faster than the S&P average. | It's the sign of a good program when investors are considered in one's remarks. Knight did a solid, yet subtle, job of ensuring that Nike's brand equity was protected. |
| Impact on employees and prospective employees | A | The publicity for the company's moral and ethical policies should go a long way towards attracting better people and making the ones that are already there feel prouder about the company they work for. | I doubt that the messages were directed at employees, but the spill over effect should be a positive one. Always remember that your employees - all over the world - read the press, too. |
| Overall score | A- | A classic example of how being proactive and addressing a crisis directly pays long-term dividends (literally and figuratively). | The only thing they might have done better was to emphasize that no-name brands are far more likely to be manufactured by child labor than the branded ones. |
Nike
Headquarters: Beaverton, Ore.
No. of Employees Worldwide: About 20,000
1997 Revenue (ending 5/31/97): $9.2
No. of Corporate Communicators in U.S.: 16
No. of IR Staffers in the U.S.: 3
Katharine Paine is founder and CEO of The Delahaye Group, an international image consulting firm based in Portsmouth, N.H. If you have a suggestion for an Image Patrol column, you can reach her at 603/431-0111. She will be a speaker at PR NEWS's Advanced Crisis and Media Relations Two-Day Workshop Sept. 14 and 15 at the Sir Francis Drake Hotel in San Francisco.