Could there be a more bitter irony than a company that built an empire on smartphones and instant messaging standing accused of being no good at communication?
That’s the situation Research In Motion finds itself in, following a four-day outage of its email and BlackBerry messenger services. The backlog of emails and IMs that began with a switching failure at RIM’s Slough, England, office and led to cascading failures around the world has market analysts and BlackBerry fans worried the company may have dealt itself a near-fatal public relations blow at a time when it can least afford it.
Co-CEO Mike Lazaridis appeared in a YouTube video Thursday, and apologized to BlackBerry customers, while company spokesman Robin Bienfait said RIM was aware it’s “letting you down.”
But that came only after an angry torrent of complaints from customers and the press alike that RIM had taken too long to respond to the crisis. “Where are Mr. Balsillie and Mr. Lazaridis?” begged the headline in the Toronto Star, referring to RIM’s two CEOs. “BlackBerry’s master class in how not to do PR,” screamed the UK’s Daily Telegraph.
Meanwhile, frustrated BlackBerry users took to Twitter to declare they plan to switch to the iPhone, BlackBerry’s popular competitor and one of the core reasons -- along with the rise of Android phones -- that the company has seen its market share tumble precipitously over the past year.
Corporate reputation expert Alex Woolfall told the Wall Street Journal that failure to respond quickly enough to crises is a common problem in companies and leads the public to see the company as:burying its head in the sand.”
And Woolfall suggested that Lazaridis’ appearance may not have been the right move in any case. “The first time you meet a CEO shouldn’t be in a time of crisis,” he said.
All combined, it’s a situation that has market analysts predicting doom for the Waterloo, Ont.-based company.
“This is not the right time for this kind of problem to happen,” IDC analyst Francisco Jeronimo told Bloomberg News.
He added that for RIM the outage is particularly damaging because the company “always built their reputation on messaging and quality of the service.”
JMP Securities analyst Alex Gauna pointed out to Bloomberg News that one of RIM’s best options for survival -- being bought out by another company -- looks less likely because the company’s infrastructure, once considered to be very reliable, now looks weak.
He also noted that activist investors are pushing for a change in management at the company, and RIM’s slow response to the outage strengthens their case.
“Communication is a problem for this company, and leadership is a problem for this company, and those two things have got to turn around,” Gauna said (see video above).
Writing at eWeek, Don Reisinger argues that RIM’s PR problem is piling on top of an already existing brand problem.
“If one were to poll most consumers, they would say that RIM devices are designed for the enterprise. On the other hand, most enterprise users would likely say that RIM's devices are boring compared with those they use in the home,” he writes. “If RIM doesn't improve its brand reputation quickly, it might have no way to change its fate.”
Think RIM's PR problems are bad? They're nothing compared to some companies who in recent years have been accused of massacres, oil spills, and, of course, the global financial crisis. Check out our gallery of The 5 Worst Corporate PR Disasters Of Recent Years
Auto recalls are fairly common, but Toyota's recall of some 9 million vehicles in late 2009 and early 2010 is remarkable for how much effect it had on the brand. The company many considered to make among the most reliable vehicles in the world suffered a serious PR setback when it was forced to issue three recalls in a row to address the problem of sudden acceleration in some cars, which has been blamed for 37 deaths so far. The recalls addressed three causes of the problem: Sticky pedals, problems with anti-lock braking, and an issue with the floor mat under the pedal. The recall's effects were tangible: Toyota fell from being the eighth most valuable brand in the world to 11th place.
Blackwater was already at the centre of a heated debate about the role of for-profit contractors in war zones when several of its agents opened fire in Baghdad's Nisour Square on September 16, 2007, killing 17 civilians. The incident galvanized Iraqi opinion against the U.S., and prompted Iraq's government to ban Blackwater from its territory. To get a sense of how complete Blackwater's PR disaster was, consider the following: The company has changed its name (to Xe Services) and its founder, ex-Marine Erik Prince, has left the United States and resettled in the United Arab Emirates.
Word spread as early as 2005 that the Rupert Murdoch-owned U.K. tabloid News Of The World had hacked into the phones of various prominent Britons. But it wasn't until 2011, when it was revealed that NOTW staffers had hacked into the phone of murdered 13-year-old Milly Dowler, as well as deceased soldiers fighting in Iraq and victims of the 2005 London bombings, that the outrage reached a fever pitch. The News Of The World ceased publication this year, and criminal investigations nip at the heels of Murdoch and his son James. But the real significance of the phone hacking scandal is the effect it has had on British politics. Those who for years had decried Rupert Murdoch's influence over Britain through his close links to politicians are now celebrating what they see as the country's new-found "independence" from the views of the Australian media mogul.
It may be that Goldman Sachs has been unfairly singled out for blame in the wake of the 2008 financial crisis; after all, AIG, Bear Stearns, Lehman Bros., Fannie and Freddie and many others contributed significantly. But Goldman's uncanny ability to profit off of economic collapses going back as far as the Great Depression has made it a powerful symbol for those who argue the modern financial system is fundamentally flawed. The investment bank was famously described by Rolling Stone reporter Matt Taibbi as "a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money." Now that's some bad PR. And it didn't help that Goldman CEO Lloyd Blankfein (pictured above) declared in the wake of the financial crisis that Goldman is "doing God's work."
Companies such as Halliburton and Transocean had their role in creating the conditions that caused the Macondo oil rig to explode on April 20, 2010, killing 11 oil rig workers and unleashing the worst single oil spill in the history of the industry. But BP took the brunt of the public relations storm, quickly becoming synonymous with environmental irresponsibility. The company is slowly paying out damages through a $20 billion fund, but the cash isn't enough to stop critics from declaring that BP stands for "better pray," or "bloody pathetic," or "better prosecute." And the company's lowest point may have come when, during the spill, CEO Tony Hayward appeared to complain about all the overtime the spill has been forcing him to work, declaring, "I'd like my life back."