Changing a brand name can salvage the reputation of crisis-ridden companies
From Leighton Holdings to the Weinstein Company, when an organisation goes through a major crisis, a total rebrand is often the only option. Here, Tony Jaques looks at examples from some of the comms world's biggest disasters.
All of Hollywood was eagerly waiting to see who would buy and rename the scandal-plagued Weinstein Company. Now it seems there will be an auction for the assets of the bankrupt enterprise. While the Weinstein name is sure to disappear, will erasing a poisoned brand be enough to protect the movies?
In responding to a reputational crisis, adopting a new name can be an effective strategy. Consider the iconic Australian construction company Leightons which was renamed CIMIC by its new Spanish owners to distance themselves from past corruption allegations.
Or take the American low-cost airline ValuJet which was quickly renamed AirTran soon after one of its jets crashed into the Florida everglades killing everyone on board. It was an openly acknowledged effort to escape the ignominy associated with a litany of company safety violations… and the day after the change their share price went up more than 30 percent.
Or consider the infidelity website Ashley Madison which became an international joke when hackers exposed the details of millions of would-be cheaters. Parent company Avid Life Media later changed its name to “ruby” which, the new management very helpfully explained, “has a sensual, feminine quality, connotes value and fits with the fresh start our company is undergoing.”
Other companies have had to try somewhat harder to justify a change of name. When Transfield Holdings became Broadspectrum, the company reportedly said it had nothing to do with distancing itself from alleged human rights violations during its management of Nauru and Manus Island refugee detention centres. And when Ardent Leisure, the parent company of Dreamworld, voted to change its name to Main Event, it was said to be unrelated to the fatal accident at their theme park just two days earlier.
More recently, high-profile arms manufacturer Smith and Wesson changed its name to American Outdoor Brands, supposedly to reflect their broader business and nothing to do with the risk of anti-gun sentiment. As Salon.com headlined the news: “A gunmaker by any other name.”
Of course a name change is not only employed in the wake of a reputational crisis. Sometimes it occurs simply because of a damaging new association. Think no further than the Wisconsin Tourism Federation whose initials came to mean something altogether different; or the Lance Armstrong Foundation which became Livestrong after its founder’s drug cheating was exposed; or the West Melbourne health provider ISIS Primary Care which had to change its name in 2016 because… well, you get the picture.
However, a name change is usually much more consequential when it’s done deliberately to divert attention from a dubious past… and it’s not always entirely successful. Take the case of security contractor Blackwater which changed its name to the unpronounceable Xe after employees were accused of killing unarmed civilians in Iraq. A few years later the name was changed again, to Academi, which the company admitted was intended to sound as boring as possible. Yet the original Blackwater tag continues to persist in the mainstream media.
There’s an important lesson here. The prospective new owners of the Weinstein Company said they would rename the organisation and install a majority-female board of directors. That deal fell through, but whoever buys the assets will most likely still need to create a new identity. Only time will tell whether a change of name on the Weinstein movies can mask the brand’s terrible stench. And that may depend on whether the news media are willing to let the old name die.
This piece first appeared in Tony Jaques’ Issue Outcomes newsletter. You can subscribe here.
…and when the Big Four change their names after the Financial Services Royal Commission?
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If the name changes but nothing else does….expect the next brand image ruining event to be just around the corner. Lipstick and pigs and all that….
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