• Reputation Matters: What Not to Do Chip Wilson-Style

  • Business magnate Warren Buffet said it best, “It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.”

    Unfortunately for Lululemon Athletica’s founder, Chip Wilson, it does not seem like he has recovered from his p.r. missteps and recently submitted his resignation to step down from the board in February.

    His problems stem from his outspoken nature. One example that backfired poorly, occurred when the company started receiving complaints in 2013 from female customers about the yoga pants fabric pilling (when fabric forms small balls of fluff). Wilson decided to share his candid, personal thoughts and in an interview he said the pilling problem was due to customers’ thighs rubbing together … or in other words, Wilson thought some women were too fat for the clothing.

    The company tried to reign him in and Wilson issued a video apology. However, his apology was directed toward the company’s employees and not its customers. This further offended its customer base and damaged the company’s reputation.

    Wilson would have been better off addressing customer concerns head on. Through a tug-of-war with the Lululemon board, Wilson finally relinquished control after it was clear that he was doing more harm than good. When a winning public perception is jeopardized, such as what happened in this case, immediate steps should be taken to effectively communicate and to eliminate the potential for any further damage. What could Wilson have done differently? Here are a few steps for any business owner to consider when a crisis arises in order to protect your brand’s reputation.

    • Investigate. When issues or complaints arise, look into the matter and determine if changes are needed.
    • Communicate. Information should be shared both internally and externally. A set of talking points should be created to effectively communicate with your target audiences (i.e., employees, customers, media, stakeholders). Only designated spokespersons should speak on the matter. Closely monitor all traditional and social media platforms to ensure that the most up-to-date information is being shared and concerns are addressed.
    • Plan. Ensure that your company has a crisis plan in place prior to a crisis occurring. Be sure to meet with your staff, so that everyone is aware of the plan and understands the proper protocol to be followed.
    • Respond. Address the public and media’s concerns and questions with integrity, understanding, and consistency in tone. Be willing to communicate and work toward resolving misunderstandings, errors, and issues of quality or management.
    • Repair. Whether your company is at fault or not, the management team must repair the real or perceived damage. This may range from giving a refund to hosting a customer appreciation day to shaking up your management team. The severity of the issue will determine the course of action.

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