Cheryl Dixon is a global communication and brand strategy executive with more than 25 years of experience at enterprises such as Chanel, Pepsi-Cola North America, and Ernst & Young LLP. She brings 25 years of corporate communication experience to the Columbia SPS M.S. in Strategic Communication program, including the Strategic Communication Management core course and Communication and Global Brands elective course. In the courses, she covers global marketing communication fundamentals and trends as well as tactics for gaining buy-in on and measuring the business outcomes of communication initiatives.
She weighed in on Adidas’s response to anti-Semitic remarks made by their former collaborator Kanye West. Read her op-ed below.
Did Adidas act quickly enough? Why didn’t they cut ties immediately? Was their statement authentic? Did they do the right thing? Why did the stock price fall? What took them so long? “This was a PR nightmare, and I’m questioning ever buying from them again!”
So much analysis and opinion on these questions, and much of it centering on how quickly Adidas acted, or didn’t act. As a career communication professional who loves a good crisis case study, I know the importance of quick response, acknowledgment, transparency, and authenticity.
I believe Adidas did the right thing by launching an investigation before acting. And while I was not in the boardroom, those investigations were not as simple as the right or wrong of Ye’s sentiments—crises never are.
Avoiding More Crises
Ye’s comments and actions were reprehensible. Clearly. So why did Adidas need time to investigate? Risk assessment and action planning. Consider the size of the Yeezy business—reportedly close to 10% of the company’s annual revenue, about $2 billion. I’m not an operations expert, but I imagine that impacts a lot of jobs. And a lot of merchandise that is already in stores. What happens if jobs are cut as a result, merchandise remains in stores long after Adidas terminates the partnership, shareholder prices drop double digits, or Ye sues? More crises to manage.
Thought leaders are claiming the company’s 4% stock decline was the deservedly steep price it paid for taking so long to cut ties with Ye after his anti-Semitic remarks.
I disagree. Their stock did not fall because Adidas took “so long” to respond. With the loss of Yeezy, there will be an impact on net revenue by terminating the relationship. That is why the stock price will be impacted.
Lessons Learned
Could they have, and should they have, issued another statement as the investigation was ongoing? Absolutely. It may have lessened the perception of inaction. Should they have planned for reputation risk? Yes, and it’s likely they did, but possibly not to this level. Most importantly, Adidas did not denounce actions of anti-Semitism when it announced its investigation. If the company was fact-checking whether Ye actually made offensive statements, they should be cautious not to make accusatory statements and condemn him directly.
However, Adidas should have taken the opportunity to state its core values and denounce anti-Semitism in all forms.
It’s difficult to make a big ship take a quick turn. This decision was not made quickly but was made carefully, certainly with board-level involvement. As a colleague of mine said, “People forget late. They don’t forget wrong.”
Adidas could have navigated this better, but let’s not lose sight of the many stakeholders it needs to consider as well as the final outcome. Adidas did the right thing to investigate, then terminate the partnership. Let’s see how quickly the stock price recovers.
