Toxic brands

While I was in South Africa last week, President Zuma unveiled a new statue to the late Oliver Reginald Tambo, former President in Exile of the ANC during the Anti-Apartheid Struggle. O.R. Tambo was the legal partner and lifelong friend of Nelson Mandela. He would have been 100 years old this year. Quietly spoken, consultative and clear thinking, one of his many achievements was to lay the foundations of the country’s new Constitution.Blog pic Zuma (1)

Quite what he would have thought about being unveiled by President Zuma we cannot guess. One person who watched the ceremony told me she was surprised the statue didn’t melt. The ANC under Zuma is now so far adrift from the vision of its founders that Nelson Mandela Foundation CEO Sello Hatang recently commented, “We should honour these two great South Africans (Mandela and Tambo) by accepting that the struggle is not yet over. We should all continue to strive for a truly non-racial, non-sexist and equal society and to vigilantly guard our democracy and our Constitution.”

Grassroots opinion against Zuma continues to build and there are hopes that December’s Elections for ANC President may trigger a change process. The ANC itself is not yet a failed brand or a toxic one. But the same cannot be said for a growing number of prominent businesses that have unwisely chosen to serve the Zuma-Gupta axis. First to go poisonous was British Public Relations group Bell Pottinger, reviled for using their skills to promote racial discord while working for the Gupta’s Oakbay Capital. Clients deserted in droves, senior heads rolled and the firm was condemned by the industry’s governing body for bring Public Relations into disrepute.

Global consultancy firm McKinsey has also lost some of its lustre after being hauled up in from of parliamentary committee in South Africa for its work for the Zuma and company.Global audit and consultancy firm KPMG is next in line and starting to smell very bad indeed. Accused of sanitising many of Oakbay’s tax evasions, they also wrote a report which Zuma used to undermine the former Finance Minister. Already clients are deserting the firm. The Country Manager of a major American FMCG business told my colleagues in Johannesburg that he had received an explicit instruction from New York to ‘cease dealings with KPMG immediately.’ Wits University has also walked out.

It’s been a while since this sector was under scrutiny – for aiding and abetting US companies like Enron to deceive shareholders and employees. But KPMG South Africa reminds us that when there is big money around (and greed is the Pole Star) some of those charged with banking it, investing it, and accounting for it may not act with the propriety that Society expects.

In the case of audit and consultancy firms, the old Roman warning ‘Quis custodiet ipsos custodes?’ remains pertinent – who indeed guards those guards?

A decade ago this kind of toxicity might have been suppressed. One of the traditional roles of PR firms was to ‘kill’ stories that would negatively affect the fortunes of their clients. The early days of crisis management were all about bamboozling or intimidating the media. Threatening to pull advertising support or striking editors off circulation lists. But that no longer works in the digital era, where almost every person on the planet can be a newsmaker and opinion former.

The risk of brand toxicity – characterised by the collapse of market trust and the flight of customers – is now a scenario that every Executive team and Board should anticipate.

Chris Harrison leads The Brand Inside

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