#35 – Tesla avoids a reputation pothole, Pizza Hut’s late hacking delivery, and a $250k reputation mistake

#35 – Tesla avoids a reputation pothole, Pizza Hut’s late hacking delivery, and a $250k reputation mistake


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Have bad news to share? Be quick to get your side of the story out!

Each week, Erin Jones and I take a look at the most interesting reputation management stories, answer your questions, and share valuable ORM tactics. In this week’s episode:

If you have a question you would like us to tackle, please leave a comment below or on my Facebook Page.

Transcript (forgive us for any typos):

Andy Beal:                  We’re at episode 35 and it’s a good one. We’re going to start off with Tesla. You should be familiar with Tesla because they are the darling of well, not just the high-tech industry, but any industry. They manufacture the sleek electric cars that you probably see all over the place and drool over. However, they had an announcement this week where they fired an estimated 400 to 700 employees. We don’t know the number, that’s the media’s guess, 400 to 700. They said it’s because of regular performance reviews and that these happen to be employees that basically failed the performance reviews. The company came out and got ahead of the message and said … they insisted these are not layoffs, so this is not any indication that the company’s not doing too well, these were employees that didn’t meet their high standards and so they were fired.

It’s interesting because you could look at this, the conspiracy theorist, and you could say, “Hey, this is a cover-up and they’re just crafting the story to protect their reputation,” or you could look at it from the other side and say, “Hey, this is a company with such high standards that they’re willing to sacrifice these employees and go out and find better employees.” What say you Erin?

Erin Jones:                  It’s not uncommon for a company to lay off 5% even 10% of their workforce if they’re not seeing the numbers that they need to see. I don’t think that this traditionally falls in line with Tesla’s inclusive, feel-good reputation, but it sounds to me like they were trying to cut dead weight. I may be a little bit biased because I am waiting on a Tesla 3 to show up in my driveway.

Andy Beal:                  Good disclosure.

Erin Jones:                  Another curious thing that I heard, throw on your tinfoil hat really quickly, is that they may have been trying to avoid unionization, that some of the people that they let go were very vocal supporters of a local workers union. There are a lot of things swirling around here but I think that … Michael Harley over at Kelley Blue Book said that a major change in staff, whether it be dismissals or layoffs, can be a really good indication that there is an upper-level movement to put the train back on the tracks. Hopefully, regardless of the cause for what happened, they’re taking this time to really focus on getting things back where they need to be. Their production and development has been delayed for months now, there are rumors going around that they’re not doing great financially. I think it’ll be interesting to see and I think what’s really going to matter is how they take this moving forward.

Andy Beal:                  You make some interesting points and they could be killing two birds with one stone. They need to get the company back on track and they need to get rid of the dead weight, and so these are legitimate firings because they’re getting rid of the employees that are not pulling their weight, and they’re going to hire even better ones. Maybe they needed to let go whether it is for the potential for union or just because they’re in positions where they were overstaffed. I think the interesting thing is that Tesla, the interesting thing for me at least is that Tesla got out in front of this and created the narrative here that this is poor performance on the part of these employees that were let go.

That helps play into the reputation that Tesla has of being this just amazing company. I would argue that they’re like the Apple of our day. Apple’s kind of seeing a little bit of a drop-off and Tesla, everybody, well not everybody, but a lot of people want their cars and they’re doing amazing things with all kinds of technology. Whether this is a carefully crafted narrative to avoid using the term layoffs or not, it plays into the reputation that they’re trying to build of excellence.

Erin Jones:                  Definitely. Now, my question to you is: if you were advising them right now, what would you recommend they do moving forward so that they can maintain that great reputation without this being a long memory issue?

Andy Beal:                  Well I think that they need to demonstrate that the story that they’re spinning is true. I think that within the next few weeks or months they need to come out and announce hiring, or something positive along the lines of replacing these people that were let go. I think that they couldn’t afford to ignore any of the rumors. I wouldn’t go or give in any fuel to speculation about whether they were going to unionize or not, but keep an eye on it, make sure the mainstream media doesn’t bite onto that narrative, but I think they don’t want to get into the weeds here and start defending stuff, if it’s not true or not, getting any traction.

I think that they do need to demonstrate that their product and the promises that they’ve made about time lines can be trusted. That’s what they got to focus on. It’s all very well having this great reputation that they’ve built in the past, but when you have bumps in the road, pardon the pun, that reputation is only going to carry you so far before people start looking at this and saying, “Well wait a minute. You’ve had this go wrong, this has happened, this has happened,” and then they start saying that things are not as good there as they used to be.

Erin Jones:                  I agree. I think that if they can speed up production and really show an increase in efficiency, this is a great time to do it.

Andy Beal:                  Yeah. Good lesson here for those listening about when you’ve got bad news to share, letting go of 400 to 700 people is not good news regardless of what happened. It’s important to get out in front of the story, not let it leak, and just put a positive spin on it if you like. Unlike our second story, which is Pizza Hut, who waited two weeks before telling an estimated 60,000 customers that their credit card information had been compromised due to a hack of their systems. It’s good that they came out and said, “Hey, look, there was this hack,” but it took them two weeks and in the meantime, you’ve got customers who’ve had their bank accounts drained, their credit cards compromised. If Pizza Hut had come out the day that they knew of it Erin, then they could have saved a lot of hassle for their customers.

Erin Jones:                  Absolutely. I think that this is another good time to remind people that if you can get in front of things before they pick up a lot of steam, then they tend to not gather a lot of news interest. Coming out two weeks later and saying, “We had a minor temporary security intrusion,” it sounds to me like they’re trying to minimize it and downplay it when there are people who have had their bank account drained. It doesn’t make people feel good. They did offer everyone affected a free year of credit monitoring and they were smart to not use Equifax, so I’ll give them that, but I think they could have handled this so much better and I think that they’re going to have some work to do to fix this now.

Andy Beal:                  Yeah. We live in a day and age where we assume that somebody’s going to get hacked that we do business with on a regular basis. It’s just going to happen. We’re seeing it time and time again and so I think the key now is, how do you handle releasing that information and making things right with your customer and sitting on it for two weeks? Now, I could see how they were [inaudible 00:08:48] to make sure they had all the facts, maybe even to try and get some fix in place before they announced to the world that they’ve been compromised. I can see the need for that, but that doesn’t take two weeks, and I think that in this day and age with information moving quickly, especially when credit card numbers are being compromised, you need to get that information out ASAP even if it’s, “Hey, we don’t have a full solution in place yet. However, we have patched the hack. We have locked down this, that, and the other, and we’re in the process of putting together a compensation plan for our customers that involves more than free pepperoni pizza.

Erin Jones:                  Absolutely. I think people just want to know that the brand cares enough to say, “We understand that this is bad and we need you to know that we’re working on it, and we will make this right.” This is advice that we are constantly giving to people in a variety of industries. Pizza Hut is no different.

Andy Beal:                  Yeah, and this is our lesson. You need to care more about your customers than you do protecting your brand. Your reputation is what your customers think of you, what the media think of you, and if you’re worrying so much about how this hack is going to affect your brand, your stock price, what investors think of you, and you focus too much on that, you’ll make decisions that are not as beneficial for the customer and trust me, if you don’t have the trust of the customer, you don’t have the business coming in and you won’t have the brand to worry about.

Erin Jones:                  Absolutely.

Andy Beal:                  All right. Let’s move on to our last story and it involves a quarter of a million dollar Ferrari and a blocked handicap parking space, and Erin you’ve got the details on that.

Erin Jones:                  I do. This story actually hits me sort of close to home because it happened in my hometown to someone that I’ve grown up with. A gentleman that I know is taking care of his handicapped mother and he took her out to lunch last week at a local Chili’s. When they got out of lunch they found a Ferrari parked over the line of the handicapped space, far enough that his mother had a really hard time getting into their vehicle because they were parked in the handicapped space. We live in a small community, so he posted a picture of it on our local group Facebook page and just said, “You guys, this is awful. Who does this?” Just a little bit of a rant.

Oddly enough a local realtor jumped to the Ferrari driver’s defense and said, “I’m pretty sure if you had a quarter of a million dollar car you wouldn’t want door dings either, now would you? Oh wait. I bet you drive a Prius.” Then she went on to say, “I’m going to kindly ask that you take this down because these are some of the nicest people I know.” Okay. “Kindly …” Really. There was not a whole lot kind going on there.

We’ve talked many times about coming into defense of someone. You can do that respectfully without insulting someone. What’s crazy about this story though is partially because a lot of us know this gentleman, immediately jump to his defense, especially because now we’re talking about her putting the value of a vehicle over the value of a handicapped person, which is not really admirable. It was funny because he put a picture up on the post of her face. He actually had one of her real estate notepads on his fridge the day that this all happened and said, “I don’t think you’re going to be selling my house now.”

First we got the non-apology, the, “I’m sorry but …” and that kept going. People started to get mean and it turns out that as this picked up more steam, the car owner and the realtor actually started getting threats online to the point where someone threatened her life.

Andy Beal:                  Wow.

Erin Jones:                  She reached out to my friend privately and they talked and it sounds like they’ve actually really got a good dialog going on at this point. He has since deleted the post, he never meant for anyone to get hurt. He was just trying to raise awareness for an issue, which I think he raised a whole lot of awareness for this issue. It has a couple of lessons for me. First, commenting like a jerk when you are a local personality is not intelligent. Secondly, for both sides of this argument, I think people forgot that there are people on both sides of the screen here and these aren’t just online personalities, but these are people in our local community. Is it worth threatening someone’s life or their safety? Probably not.

Andy Beal:                  No. Yeah. There’s so much involved here. One of the biggest things is that … the biggest lesson here is, this doesn’t have to be a mainstream media coverage in order to hurt your reputation. This was just local, confined pretty much to people in your community, a group of friends that live in the area, on Facebook, but has damaged that person’s reputation, both to people in that community. I looked on Google News and looked around briefly, didn’t see anybody picking this up, however, it doesn’t necessarily matter because within the community, that damage has been done. I think also it’s clear, and we’ll put a photo, we’ve got a screenshot of the photo, so we’ll put that in the blog post, but it’s clear that the person driving the Ferrari is in the wrong. They have parked over … honestly, if I drove a Ferrari, I would find a parking space at the back of the parking lot where nobody else is going to park, and park it there.

This person has encroached on a handicapped parking space, they’re clearly in the wrong. If you’re going to come to the defense of the person, you don’t defend what’s wrong. You can defend the character of the person, and it’s saying that, “Hey …” but you do it not the way that they did it. Don’t, “Hey, this is an expensive car and these are good people,” but say … if I was the realtor I’d say, “I know the owner of that car. I can’t believe that they parked like that. It’s so out of character for them. I’m sure they’ll be along shortly to apologize and try to make amends for the inconvenience that they caused.” That’s how I would handle it, but yeah, this realtor’s almost thrown gasoline on to a small spark of a reputation issue, and made it so much bigger, and I don’t know why. It’s one thing to defend a friend or a client, but you got to be careful when they’ve done something legitimately wrong, and this is a clear-cut case of doing something wrong.

Erin Jones:                  Agreed, and then the fact that she just kept on digging. I think that she’ll be lucky if her brokerage keeps her. If I owned a real estate company and this was one of my realtors, there would be a lot of conversations going on about how they’re representing my logo in the community at that point.

Andy Beal:                  I think that … go ahead.

Erin Jones:                  I was just going to say, I think that this is going to have a lot of far-reaching consequences not for the driver of the car. For them they could have come on and said, “I’m really sorry. That was a bonehead thing to do,” and it would have been fine. This didn’t have to be a huge issue.

Andy Beal:                  There’s a lot of times where I think that we over share on social media and create issues for ourselves because, and I think you’ve mentioned this a number of times before, we don’t look at the people behind the photo or the people behind the posts and we just … it’s easy to go on this attack because there’s so much distance, we’re not face to face. I don’t think these conversations would have happened face to face. In fact, the death threats would not happen if these people were face to face. We live in a time where everybody’s got a smartphone with a camera, your actions can be publicized. This is not the first time this is going to happen. You should know that if you encroach on a handicapped space, people that rely on those spaces are going to take photos. I see it time and time again, and I think it’s … I don’t blame them because I get mad just when someone encroaches on my parking space and I’m able-bodied and I can walk from the back of the parking lot.

I can understand the motivation for wanting to publicize it, but you need to understand that your actions are going to be publicized somewhere. That also applies to your reactions and how you react, and nine times out of ten, being humble, apologizing is the way to go. Like I said, for the realtor, they created their own issue. They could have just stayed quiet and kept out of it. Nobody knew anything about them. It’s not like someone went on the warpath and said, “Okay. Who is this person who parked this car? I want to know the name of their realtor because I want to give them trouble too.” The realtor just put themselves in the middle of the mess.

Erin Jones:                  Exactly.

Andy Beal:                  All right. A lesson there. I go back to the point I made earlier, it doesn’t have to show up in the Wall Street Journal or on the local CBS News affiliate for it to hurt your reputation. It just could be within the local community on Facebook, and all of a sudden this driver of this car and this realtor are going to be facing a tough few weeks ahead. That’s our show … go ahead.

Erin Jones:                  I’m sorry. I didn’t mean to talk over you. I was just going to say a really good thing to remember in situations like this is something that I talk to my seven-year-old about a lot is, am I being a good person right now? Is my behavior a behavior I would want to be remembered for? A lot of this probably is not.

Andy Beal:                  Yeah. Sometimes it’d be a good reminder. If someone was capturing this on video, would I want it published to Facebook? That’s a good litmus test for the action you’re about to take, and in this case, the answer is absolutely not. All right. That’s our show for this week. We thank you for tuning in. If you have a question or a comment about any of the stories, or would like us to answer a question about reputation management, please head to facebook.com/andybealorm. You can also go to andybeal.com, find any of the blog posts for the podcast and leave a question there. Erin, as always, enjoyed chatting with you.

Erin Jones:                  Thank you so much for having me.

Andy Beal:                  Thank you guys for listening. We hope you’ll join us again next time. Bye, bye.

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