The tale of the magic wristband

Long ago and far away there existed a mighty financial institution whose leaders decided to takeMortgage_2
advantage of something called subprime mortgages. They saw an opportunity to make millions and millions in new fees by offering ridiculous mortgages to people who couldn’t afford them. Even worse, the intricacies of subprime mortgages escaped the unsuspecting borrowers who chose instead to be bedazzled by the prospects of owning their dream house.

Well, the housing bubble burst and many of the poor homeowners lost their houses, their savings and, in some cases, their futures. And, the big financial institution was pilloried in the press as being the bad guys who had lured unsuspecting consumers into the mess with aggressive marketing and pricing.

All the bad publicity hurt the big company. Its stock plummeted, its CEO was attacked in countless interviews and 12,000 employees were laid off.

This made the company’s executives angry. So, they hired a big PR firm and announced an aggressive internal and external campaign aimed at ‘taking the offense.’ It was a real beauty.

The internal program was called ‘Protect our house’ and
called upon employees to sign a pledge saying they would defend the
organization’s bad behavior to any and all critics. In exchange for
signing the pledge, employees were given magic wristbands to wear. The
wristbands, thought management, would become a rallying cry and a
source of pride for one and all.

Externally, the organization initiated a ‘protect your house’ campaign
it said was aimed at ensuring customers achieved their ‘dream of owning
a house.’

But, there were problems almost immediately.

Employees didn’t think the wristband contained any magic at all. They
were weighed down by the horrible press, the countless stories of
peoples’ lives being ruined and the reality of 12,000 fellow workers
being let go. They didn’t believe things would change just because of a
pledge and a wristband.

Externally, analysts, the media and customers didn’t buy into the
organization’s ‘protect your house’ campaign. In fact, they were
incredulous that the same company who had precipitated the crisis was
now positioning itself as a caring, concerned thought leader intent on
educating consumers to help them realize their home-owning dreams.

And, so, all the well-intentioned ideas of the organization and its big
PR firm went for naught. The company continued its decline, employee
morale sank lower than Death Valley and the well-meaning magic
wristband became, instead, a source of scorn and ridicule. In fact,
years later, it was often cited by academics and professionals alike as
a bellwether example of how not to motivate employees in times of

Oh, and the moral of this little tale? Reality trumps rhetoric in times
of crisis. Management needs to admit fault, be direct, open and honest
with constituent audiences and quickly incorporate new policies and
procedures to ensure the original crisis won’t occur again. Circling
the wagons, pretending to be what you’re not and handing out
meaningless trinkets didn’t work in that far away land (and it won’t
work here either).

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