A crisis is a test of leadership, and it is also a test of values

A crisis is a test of leadership. A test of systems. And a test of relationships. But it is also a test of values.

The importance of values in a brand crisis was demonstrated recently when British apparel maker Fred Perry decided to stop the US sales of a polo shirt that has been adopted by the neo-fascist white supremacist group Proud Boys.

Fred Perry said it was “incredibly frustrating” to see the black-and-yellow-tipped polo shirt and its laurel wreath logo become associated with the FBI-designated extremist group — which Donald Trump said he knew nothing about.

The company said it sought to represent inclusivity and diversity and would cease selling the shirt in Canada and the United States “until we are satisfied that its association with the Proud Boys has ended”.

This is certainly not the first time a brand has been appropriated by extremists to create what I call an ‘introduced crisis’.

Take, for example, when Tiki Brand found its product repeatedly associated with white supremacists who marched holding Tiki Torches at an infamous racist rally in Charlottesville, Virginia.

Or when a manager at New Balance expressed support for Donald Trump’s “made in America” trade policy, and the neo-Nazi website Daily Stormer labelled the company’s sneakers “the official shoes of white people”.

Both American companies disavowed the link to racism and declared it contrary to their values, though of course, it would have been more problematic for them to halt sales.

The Fred Perry case is a reminder that values matter in a crisis, and I mean embedded values, not the painstakingly crafted ‘value statement’ proudly posted in the lobby of corporate headquarters or on the company website.

A recent major study of listed corporate values in more than 700 large companies found that three of the most popular were integrity, innovation and diversity.

Yet the MIT Sloane research also found a substantial gap between official values and cultural reality on the ground.

The analysis showed no correlation between the cultural values a company emphasises in its published statements and how well employees think the company lives up to those values.

The Financial Times concluded in September that “company declarations keep thriving to little obvious effect”.

For example, Boeing’s chief executive, Dennis Muilenburg last year pronounced: “We remain focused on our enduring values of safety, quality, and integrity in all that we do.”

Five months later he was fired in the crisis over two fatal crashes of the company’s 737 Max aircraft.

And just weeks ago, a US Congressional investigation reported the company had “a culture of concealment”.

Or consider Rio Tinto, where the CEO just quit after an outcry over the destruction of two ancient Aboriginal sites, which has a website that asserts “business integrity underpins everything we do”.

However, a reality gap at some companies doesn’t mean values don’t matter in a crisis.

Praised for effectively managing a Listeria contamination crisis in Jeni’s Splendid Ice Creams, CEO Britton Bauer said: “It goes back to your values. Values exist in the great times, but they also exist during the shitty times. If you abandon those during the worst times, then they’re not yours, really.”

As Ian Mitroff wrote in his wonderfully titled crisis book We’re So Big and Powerful Nothing Bad Can Happen to Us: “How people react to crises and/or extreme events provides one of the most powerful windows, if not the most powerful window, into the souls of people and their institutions.”

In the face of some recent devastating crises, we are still waiting for organisations such as Boeing and Rio Tinto and Volkswagen and AMP to show they truly have a soul and real values.

This article was first published in Managing Outcomes, a newsletter for issue and crisis management professionals.

Tony Jaques is an expert on issue and crisis management and risk communication. He is CEO of Melbourne-based consultancy Issue Outcomes and his latest book is Crisis Counsel: Navigating Legal and Communication Conflict.

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