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RISK MANAGEMENT ALSO GOES FOR THE LUCK, DOLCE & GABBANA DID NOT WANT TO UNDERSTAND IT.

Not everything is bad when you are going through a crisis, there are important benefits that can be obtained from them. Of course, the benefits depend on the attitude with which the crises are taken. The next step to overcome a crisis is feedback and learning within the organization. If the feedback is adequate, organizations are served by crises to learn to respond to them and mitigate them in the future.

However , in many cases organizations use the “luck” of not having fallen into a crisis, or of “almost” falling into one. Attributing to the good operation of the organization what really was a stroke of luck, does not allow the learning process that would result in the mitigation of crisis in the future. So , it must be taken into account that there is “almost” crisis that maybe in That moment did not result in damages, but they can be disastrous the next time they occur. That is to say, also of the “almost” crisis it is necessary to learn and do an exercise of feedback throughout the organization in order to modify actions and overcome what could lead to one.

For some time, the clothing brand Dolce & Gabbana (D & G) was able to overcome the risks involved in carrying out controversial publicity campaigns and the politically incorrect comments of its owners, mainly Stefano Gabbana. Some of his controversies have been the following:

  • Comments against adoption by homoparental couples, being themselves homosexuals.
  • Critics to artists of the stature of Selena Gomez and Miley Cirus .
  • Advertising campaigns suggesting sexual violence.
  • Alleged discrimination against Hong Kong residents, forbidding them from taking photographs of their products while allowing Mainland Chinese to do so.

In all these cases, D & G dismissed the negative comments from its consumers and public opinion. This resistance to incorporating crisis management mechanisms corresponds to the fact that the brand had emerged financially unharmed from these controversies. They did not realize that they had been luck strokes.   

Luck ends when it ends. In preparation for this year’s Shanghai fashion show, D & G launched a commercial featuring an Asian woman eating Italian food with chopsticks and a male voice making sexual advances about the way the woman ate. The commercial provoked several negative comments from users of social networks in China, labeling it as racist and reproducing stereotypes and clichés.

Several users of social networks dissatisfied with the commercial sent direct messages to the owners of the brand via Instagram to complain. Stefano Gabbana – without any qualms – wrote to one of these users that China was a “country of shit and was run by the Mafia”. The conversation with Stefano’s sayings went viral.

The Ministry of Culture and Tourism of China decided to cancel the parade for the comments of the owner of the brand. Also, their products were withdrawn from the main e- commerce portals (such as Alibaba) and Chinese celebrities prompted a boycott against D & G, including those who served as ambassadors for the brand.   

The Chinese market represents 33% of the global participation in the luxury fashion sector, which places China as the most important market worldwide. The losses of D & G are estimated at more than 500 million euros and it is expected that the negative perception of the Chinese consumer will last between six months and a year, but it could be higher.   

Dolce & Gabbana did not consider a scenario where the controversy generated by their comments could cause them to lose the most important market worldwide for their brand. Given that they do not have adequate crisis management mechanisms, their reaction was to argue that Instagram accounts were ‘hacked’. However, given the reputation that D & G built, this was not credible.  

The fact that a company can assume high risks and emerge unscathed on several occasions may be due more to luck than to institutional and reputational strength. If an organization intends to capitalize on the generation of controversy, it is important that it plans scenarios for its team to understand the possible outcomes. This planning will not only prepare the company for an eventual crisis, but it will reveal the institutional weaknesses that have not been addressed.

To give your organization peace of mind, in Political Risks we can help your company establish effective mechanisms for risk management and crisis management. Contact us at info@riesgospoliticos.com.mx .

 

Photo by NeONBRAND on Unsplash

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