Stopping the downward spiral: Harvey Norman’s PR disaster continues

In the not too distant future, I’m pretty sure university lecturers in communications will be teaching their students how not to do crisis communications using the actions of major Australian retailer Harvey Norman this week.

The self-inflicted PR nightmare for the retailer has been simmering for weeks when unions, politicians, customers and employees called the company out for holding on to more than $20.5 million in JobKeeper handouts after record profits during the pandemic.

Harvey Norman’s PR team had an additional challenge when the company chair, Gerry Harvey, started actively lobbying to freeze an increase to the minimum wage for his workers as his company pocketed more than $462 million over just six months in 2020 — more than double its profits.

And how did the company respond to its critics?

By throwing every lesson in crisis communications out the window.

It started by belittling people on Twitter, including a former employee who raised serious mental health concerns after working at the company, by responding with a face-palm and waving emoji. 

Then it started blocking followers en masse, before finally deleting their account entirely and ignoring any questions or calls for comment.

Except for the bizarre blocking and mocking spree on Twitter, the company has been silent across all its channels, leaving the public to tear it’s reputation to shreds.

If there’s going to be any way out of this mess, we’re thinking Mr Harvey might need a crash course on how to handle a communications disaster.

Harvey Norman is trending (for all the wrong reasons)

Lesson one in reputation management, if you don’t understand your stakeholders, (or worse, ignore or actively mock them) you will create damage, sometimes to the point of irrepair. They will quickly become confused, angry and react negatively. The impact to your financial and reputational bottom line will be more severe, and the length of time to resolve the issue will be extended — often dramatically.

Case in point: the hashtag #boycottharveynorman trended on the platform this week with hundreds of customers and employees calling the company out for corporate greed and its abysmal behaviour both off and online.

Lesson two: recognise when operational improvements are necessary and be transparent about how you’re solving the situation.

With no statement, no press conference and no actions taken to remedy the situation, we’ve been left with no choice but to assume guilt.

The disaster worsened when politicians, media outlets and high-profile Aussies like popular comedian Celeste Barber joined the boycott before getting blocked by the company.

The Tasmanian Times ran a meme competition to call out Harvey Norman’s corporate greed after it was blocked for simply reporting on the protests.

“We have been blocked on this platform by @harveynormanau for reporting on an event that occurred outside their Hobart store today,” the Times tweeted.

“This is is just petty and silly. Exactly what HN thinks they can achieve is, well, mystifying.”

The golden rule of managing PR disasters that Harvey Norman failed to learn was to take responsibility. Businesses in this situation need to control the message by reacting immediately and responding to feedback.

You wouldn’t think you’d have to add not mocking genuine complaints with emojis to the rulebook.

Instead of dismissing people publicly, Harvey Norman needs to acknowledge their concerns and questions, apologise and take action. There is no excuse for an ‘unmanned’ social media channel, and people expect genuine two-way communication on each platform.

In crisis communications, you can’t fall back on ‘crazy prices’ and ‘hardly normal sales’. But if you get it wrong, you might indeed watch your prices fall — it will just be your share price.