This is a story about the power of storytelling on reputation.
There’s one man who might be pleased to have seen Elon Musk’s salute.
This man.
His name is Gerald Ratner. He was a jeweller.
In 1991, Gerald made a speech which cost him his business.
If you are too young to remember, he told an audience of businesspeople that the reason his firm’s products were so cheap was that they were crap.
It earned him a place in business folklore. How one action can ruin your reputation. The Ratner Effect was born.
He lost £500 million.
Chicken feed, compared to the impact of Elon’s foray into global geopolitics.
When I last checked, Fortune magazine was writing that the Tesla stock price had fallen 46% since Trump took office.
And while buyers may have been disappointed with their jewellery, people did not set fire to Ratner shops on the High Street.
Tesla drivers are afraid to drive their cars in case of reprisals. Or because they are ashamed to be seen in them. The used market is awash with the brand.
As one asset manager told Fortune, with unusual understatement, “I don’t think it’s a great thing to alienate half the population.”
And investors seem to think this brand crisis is different.
Interestingly, it was some of Musk’s hitherto most loyal investors who were forcing sales of the stock. The American Jewish community. It’s not hard to see why.
No more Ratner Effect?
Is this the moment, The Musk Effect replaces the Ratner Effect?
Reputation matters. To your staff. Your customers. Your investors.
For many firms, the concept of a chief reputation officer is something they are treating as seriously as a chief marketing officer or chief technology officer.
An SME might not want to go so far. But a reputation management strategy is vital in a world of cancel culture. Do you know how you are going to protect your brand from a reputation crisis?
You probably don’t need an expert to tell you that it’s best to avoid telling your customers they’ve bought crap. Nor is it a good look to imitate one of the last century’s most evil dictators.
The risks for your business may be more nuanced. They will certainly be bespoke to you, your sector and your culture.
Whatever they are, they are real. To find out more about how Philip Tutt-Leppard can help you identify your risks and mitigate them, check out the 360 Integrated PR workshops.
(Main photo by Tim Mossholder on Unsplash)