This Month in Reputation: Universities, Facebook, Boeing... and Ryan Adams

Corporate Reputation, March 2019

 

March was a truly brutal month for reputation—concert tours were canceled, planes were grounded, and, thanks to a college admissions scandal, Aunt Becky from Full House lost a lucrative contract with the Hallmark Channel. 

When approaching reputation in March, there’s really only one question: Where to begin?
 

Lori Loughlin learns maybe there was an easier way to get her daughter into USC

In mid-March, news broke that 50 people had been indicted for their involvement in a far-reaching and long-running scheme to get the children of wealthy parents into elite colleges like Harvard, Yale, USC, and Wake Forest. 

The man at the center of it all, Rick Singer, arranged for the children to get more time on standardized tests (or had someone else take them entirely) and created elaborate fictions about the applicants’ athletic prowess (including staging photo shoots and re-writing essays) in order to get them preferential treatment as possible recruits. 

Lori Loughlin, the aforementioned Aunt Becky from squeaky clean sitcom Full House, and her husband, clothing designer Mossimo Giannulli, paid $500,000 for their two daughters to get accepted to USC as part of the crew team, despite the fact that neither girl has ever picked up an oar in her life.

One of the daughters, Olivia Jade, is an Instagram influencer who has been vocally dismissive of higher education, seemingly only in it for the possibility of sweet sponsorship deals. 

Others implicated included Felicity Huffman of TV’s Desperate Housewives and Sports Night, as well as her husband, Fargo’s William H. Macy. Less famous but still very powerful people involved included William McGlashan, a private equity investor focused on “ethical investing”and investing for social impact. 

Within days of the news, Loughlin was dumped by the Hallmark channel, where she had been a regular fixture in soft-focus, feel-good movies like Garage Sale Mystery. Many of the coaches involved in the scheme were also soon out of a job. Huffman and Macy, once the darlings of indie film and TV (in 2006, Stephen Colbert famously dubbed them Filliam H. Muffman in a segment on the Colbert Report), have now lost a significant amount of credibility with audiences.

Huffman deleted her mom-themed Twitter account after unfortunate tweets about “back to school hacks” resurfaced. 

The greater damage, however, was to the reputation of the American elite and to its most prestigious institutions. Rather than rigorous places that only admit the best of the best, this scandal has painted them as finishing schools of the nation’s rich, a place where the mediocre progeny of millionaires can get a little academic shine and status—for a price. 
 

Boeing faces major questions about 737 Max

Boeing has come under increasing scrutiny following the crash of Ethiopian Airlines Flight 302, which plummeted to the ground after takeoff on March 10, killing all 157 on board. 

Boeing Reputation


This follows a similar crash of a Lion Airlines flight in Indonesia back in October, which plunged into the Java Sea only a few minutes after taking off from Jakarta. All 189 passengers aboard died. 

Both crashes centered around an automated system intended to keep the re-designed 737 from stalling, but which caused the doomed aircraft to pitch downward unexpectedly and eventually crash.

The 737 was launched in the 1970s, with several updates to the design in the decades since; this most recent had been tweaked to increase fuel efficiency with re-designed engines that had to be pushed further forward on the wings to compensate for the changed aerodynamics. It was these aerodynamics that required the automated system that is thought to have contributed to both crashes.

A report recently found that the pilots on the Ethiopian Airlines flight had followed Boeing’s instructions on how to counteract the automated system; the plane crashed regardless. 

Following the Ethiopian Airlines crash, many countries grounded the 737 Max, with the US eventually following suit after a delay of several days.

The relative newness of the 737 Max has limited the impact of its grounding. Boeing, however, has thousands of currently unfilled orders for the plane, and at least one airline has now tried to cancel. The company is also the subject of numerous lawsuits from the families of those killed on the flights. 

Air travel is, more than almost any other business transaction, based on trust. Passengers give up all control when they step inside a plane, and put complete faith in the pilot and the airline to get them to their destination safely. If anything goes wrong, the results are often catastrophic. 

Boeing says it’s working hard on a software fix that will correct the problem with the automated system. Will Boeing be able to regain the trust of airlines and travelers? We will have to wait and see. 
 

Ryan Adams cancels UK tour in light of fan unrest over sexual misconduct charges

In February several women, including his ex-wife, pop singer Mandy Moore, came forward to accuse songwriter Ryan Adams of abusive and exploitative behavior

In response, many of Adams’s fans who had shelled out money to see him on his UK tour started demanding refunds. They suddenly weren’t too keen to come watch the singer perform soulful ballads about love and loss in light of the unsettling allegations.
 
Ticket promoters were left in a lurch: they were still bound by the contracts they had signed with Adams, and according to Adams, the shows would go on and no refunds would be given. 

Simon Long, a founding partner of the music and entertainment law firm Collins Long, told the Guardian that perhaps this will lead to important changes: “Until such time as we have contracts – and this is a lesson for the music industry – that say things like ‘Thou shalt behave like a saint, and if you don’t we have the right to cancel the tour,’ there’s no way out for the promoters.”

In response to the outcry, Adams has now canceled the tour entirely. Fans will get their refunds.
 

Facebook has another privacy and security nightmare

The social media giant hasn’t really been able to get anything right in the past two years and the unforced errors show no sign of stopping in 2019. 

Following a hack last year that exposed the data of nearly 30 million users, this month it was revealed that the passwords of hundreds of millions of users had been stored in plain text and available—and even searchable!—to Facebook employees, some going all the way back to 2012. 

From the fact of the blunder itself, to the time it’s taken for Facebook to tell users about it, it all reflects poorly on them, and at a time when they could use it the least.
 
In response to this latest scandal, Facebook has plummeted down our 2019 US RepTrakrankings, falling so far and so fast you might think they were on a waterslide. They now have one of the worst reputations of any U.S. company we measure: the only one below them is the Trump Organization.
 
And this isn’t even the only bad press Facebook got in March: Following the shooting at a mosque in New Zealand that left 50 dead, Facebook had vowed to finally crack down on the presence of white nationalist content on their platform. In theory, this is a step in the right direction. 

This week, however, it was revealed that the new “ban” may not mean much: when shown a video from Faith Goldy—considered by many to be a white nationalist—that talked about minorities and Jews “replacing” whites (a central tenet of white nationalism), a Facebook spokesman said it did not meet their criteria for white nationalism, and thus would be allowed to remain on the platform. Many are now asking the question: If that video isn’t white nationalism, then what is? 

Facebook, like most social media companies in 2019, finds itself in a position where it wants to take bold stands against hate speech and misinformation while also not offending any powerful or influential people. 

That may simply be impossible now and consequently, the company has some truly hard choices to make. Will they make the right ones?  

SHG

Stephen Hahn-Griffiths
Executive Partner, Chief Reputation Officer
Reputation Institute
shahn@reputationinstitute.com
@shahngriff

 
 
 
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