Protecting your brand in a crisis: Crashgate
Today's verdict on the "Crashgate" affair in Formula 1 racing shows that Renault handled their toxic brand scandal much better than the rugby team I support, Harlequins, who made a total screw-up of their own scandal, "Bloodgate". We can learn a lot about crisis management from these two stories. We'll look at getting it right today, and totally screwing it up tomorrow.
Getting it right: Crashgate and Renault
This story is so crazy, it would have been unbelievable as a movie script.
Renault's Formula 1 driver Nelson Piquet Junior crashed his car in the 2008 Singapore Grand Prix, last September. This forced the
deployment of a safety car, which in turn helped Renault team mate Fernando Alonso win the race.
One year on, and Nelson gets fired. In a fit of pique-et (sorry, couldn't resist it), he goes public with the true story of what happened. He claims to have crashed under orders from team leader Flavio Briatore, supported by engineering head Pat Symonds. The FIA launch an investigation and on September 4 formally charge Renault with race-fixing.
The FIA's verdict today was to ban Briatore for life, and Symonds
for five years. Renault only got a suspended 2 year ban. This means
they go on racing, as long as they don't do anything naughty in the
next 2 years. They avoided a heavy fine, unlike the McClaren team in
2007, who were fined $100million over a spying scandle, which they
This means there is a good chance that most of the radioactive waste of
the scandal will be dumped on Briatore, and not the Renault brand.
Renault's repsonse: what they got right
Renault got a lot right in how they handled things:
1. Admit you're in the wrong (assuming you are): Renault put their hands up, saying they would not dispute the allegations
2. Change the leadership: Renault also announced that Briatore and Symonds had left the team. I expect they each had a rather large boot-print on their bottoms.
3. Act FAST: both the above actions happened only 12 days after the FIA investigation was announced
4. Offer to pay: Renault offered to pay the legal costs of the case, and (nice touch) to make contributions to crash safety research
Getting it wrong: Bloodgate and Harlequins
Harlequins sorry story is almost the exact oppostite of Renault's. And again, too mad to be a movie
On April 12 this year, Harlequins Quins bring off Tom Williams with what seems to be a blood injury in the quarter final of the European Rugby Cup, to get their star kicker, Nick Evans, back on the pitch. In the end we loose anyway, 6-5. The opposition, Leinster, protest that the injury has been faked.
On April 17 the ERC launch an enquiry. Here is the chance for Harlequins to act fast and tough, as we saw in the Renault case yesterday. Instead, the club protest their innocence at a hearing on July 20. The ERC disagree, fining the club £215,000 (a lot for a rugby club), with half suspended for 2 years. Williams is banned for 12 months.
Things get worse, much worse, when Williams appeals his ban. In doing so, reveals he used a blood capsule from a joke shop, under the orders of Director of Rugby Dean Richards. Finally on August 8, Richards resigns.
At the August 17th appeal hearing the club's fine is increased to £258,000, all payable immediately. Richards is banned for 3 years. Williams's ban is reduced to four months. 10 days later Halrequins chairman resigns.
This means the club's brand has been dragged through the dirt for four whole months, with newspaper headlines filled with Bloodgate stories, leaking lurid detail after lurid detail.
Harlequin's repsonse: what they screwed up, big time
1. Fail to investigate the accusation: the club's management, including CEO Mark Evans, took Dean Richards' word as the truth, instead of launching an immediate investigation
2. No action: it took almost four months for any action on Harlequins' part, when Richards resigned
3. Piss off the prosecutors: by protesting innocence, and trying to use legal loopholes, Harlequins pissed off the ERC big time, and paid the price
4. Act slowly: by sticking their head in the sand for months, the club allowed the flames of scandal to be fanned, with more fuel being thrown on the fire each week.
And surprize, surprize. In the first three games of the new season a team who came 2nd in the league last year are… bottom of the table, loosing 3 out of 3 game, and 1 point out of a possible 15.