Brand Management: Lessons From Beyoncé and Reebok’s Diversity “Fail”

Greed drives all occupations. Even poverty vowing missionaries were greedy for converts and Gothic cathedrals. Greed blinds us to corruption, which explains an Enron or Volkswagen scandal. The same motive afflicts society’s gatekeepers. Journalists and rating agencies applauded investment banks leading up to the financial crisis, then demonized them as they went into the gutter. The gatekeepers were greedy for insider scoops in the first case and for the world to think they were skeptics in the second.

Social media blinds us to truth. Everyone is a potential victim of what I call the ‘shame and blame’ parade in which the more famous a person is or a brand, as in the case of Reebok, the more likely a false rumor will spread to make the spreader appear in the know. In the Cronkite era, the story would disappear because our memory bank could not hold onto it for very long. But social media puts a Post-it note next to any allegation where it is never off the radar and can become a compelling story.

The story of Reebok is profoundly distressing for anyone who spends time building brand reputation. Reebok has developed the brand since its founding in 1958. All it took to bring it down was an errant rumor on a talk show and a tweet by a micro influencer. That is the reality of brand reputation in 2019. As Harry Truman said, “If you can’t stand the heat, get out of the kitchen.”

The Backstory

While appearing on ESPN’s sports talk show, Nick DePaula, a sneaker blogger, mentioned he “heard a great story.” According to DePaula, Beyoncé was meeting with her Reebok team when she got up and walked out: “Nobody in this room reflects my background, my skin color, and where I’m from and what I want to do.” The story made for juicy celebrity gossip with a dash of racial tension tied to a well-known brand.

For ESPN, it was shame and blame clickbait. For Reebok, it was a malicious rumor that should have gone nowhere.

The Blame and Shame Parade

It took fifteen minutes for talk show host Rachel Nichols to tweet the rumor to her 1 million followers: “Representation, Baby.” A real journalist might have first asked, “Verification, baby?”

That tweet was a tribal drumbeat to the media. Articles poured forth from Oprah Magazine to NY Daily News with the same headline, “Beyoncé Walked Out of Reebok Meeting After Lack of Diversity.” Most of the media didn’t bother to check with Reebok. Fact-checking takes time, meaning your scoop ends up on Google’s second page. Greed, again.

Google hits for “Reebok and Beyoncé” rocketed to over 10 million views. “Reebok and Diversity” is now the top pairing for the brand. A moment of errant gossip turns into an epic ‘diversity fail.’

A handful of conscientious journalists with publications like TMZ and Buzzfeed, which ironically is the inventor of clickbait, bothered to fact check the rumor. Reebok responded: “The report that Beyoncé walked out of a meeting with Reebok due to lack of diversity is categorically false. Our discussions with Beyoncé and her team continued for several months after our initial meeting. We are disappointed that false information is being reported as fact.”

Matters of Fact

When it comes to truth, I always find anomalies are my best friend. If something sounds odd, most likely there is more to the story. So consider the ‘odd’ findings overlooked by the journalists:

• DePaula and Nichols ignored Reebok’s history with people of color. Reebok sponsored celebrity figures like Shaq, Allen Iverson, and Venus Williams. Why would they tolerate a lack of diversity any more than Beyoncé?

• Reebok’s “A” list roster has included non-athletes from all over the multicultural map. Celebrities like rapper 50 Cent, Ariana Grande, Gigi Hadid, Gal Gadot, Victoria Beckham, and Cardi B.

• Beyoncé ended up signing with Adidas, a partnership she has said, “was made in heaven.” The media neglected to point out Adidas is Reebok’s sister brand. Why should the star sign with a brand owned by the same company?

Keep Friends Close, Enemies Closer

I have five thoughts for CEOs that are understandably worried about brand reputation.

1. New Media World Order: Your enemies aren’t always the brands on the shelf next to yours. Sometimes they look like bloggers that gain at the brand’s expense.

2. Brand Oppo Research: Develop a social media management crisis team that convenes full time to sniff out pending social media crises.

3. Brand Advocates: Cultivate an army of reliable followers who can be counted on to come to your defense. Call them brand activists.

4. Social Listening: Use sentiment analysis. Stop posting interesting, start posting strategic.

5. Antagonist / Protagonist analysis: Follow Sun Tzu’s rule to keep your enemies closer. For this purpose, I suggest a tool I developed called Anti/Pro* (see below).

With smart digital practices, CEOs can regain brand reputation ground from bloggers, talk show rants, and social memes. But it’s not going to be easy. These days you have to be prepared to do more than build a brand, you need to defend it.

*Anti/Pro Analysis

The short version of my theory is that the market is a mix of antagonists and protagonists as if they were seated in a stadium. The closer they sit to the game, the higher their feelings of intensity. The ‘con’ groups are loud. They need to be drowned out by the “pro’s” to counter social media. The most effective way to accomplish this is through bold and vivid content that tells a sympathetic and inspiring story.

Jeff Cunningham is Chief Executive magazine's editor-at-large and a professor of leadership at Arizona State University/Thunderbird School of Global Management, where he has also endowed the Cunningham Global Fellowship for next-generation leaders. He also is the founder of Thunderbird Opinions poll of business trends. He was previously publisher of Forbes Magazine and CEO of Zip2 (founded by Elon Musk). Watch his YouTube interviews at Iconic Voices and connect on Twitter @CunninghamJeff and LinkedIn.