What do you do when your company is faced with a terrible and publicly visible circumstance? Whether it is intentional or unintentional. How do you respond to such an situation?
Our guests today is Dr. Shailandra and Dr. Shalini Jain, who share the lessons learned and their 8 principles from their book Managing Brand Transgressions.
TODAYS WIN-WIN:
Transgressions happen to brands of all shapes and sizes, knowingly, and unknowingly. The 8 principles in their book provide best practices for action when a transgression inevitably happens.
LINKS FROM THE EPISODE:
ABOUT OUR GUESTS:
Dr. Shalini Sarin Jain is an Associate Professor of Management at the Milgard School of Business, University of Washington, Tacoma. She has published articles in leading management journals. She has extensive industry, government, and non-profit experience leading and providing consulting services to state, county, and city governments.
Dr. Shailendra Jain is a Bret Wheat Endowed Professor of Marketing and International Business at the Foster School of Business, University of Washington, Seattle. He has extensive publishing and editorial experience in top marketing journals and has won many executive and graduate (MBA) teaching awards. Prior to his academic career, he worked in sales, brand management, advertising, and general management, and is associated with several noted marketing campaigns.
ABOUT BIG SKY FRANCHISE TEAM:
This episode is powered by Big Sky Franchise Team. If you are ready to talk about franchising your business you can schedule your free, no-obligation, franchise consultation online at: https://bigskyfranchiseteam.com/.
TRANSCRIPTION:
Dr. Tom DuFore (00:01):
Welcome to the Multiply Your Success podcast, where each week we help growth-minded entrepreneurs and franchise leaders take the next step in their expansion journey. I’m your host, Tom DuFore, CEO of Big Sky Franchise team. And as we open today, I’m wondering what you do or what you would do if your company is faced with a terrible and publicly visible circumstance. And whether that circumstance is intentional or unintentional, how do you respond to such a situation? And our guests today are Dr. Shelly Jain and Dr. Shalini Jain, who, by the way, are husband-wife team, who shared with us the lessons they learned about brand transgressions and their eight principles they developed and wrote about in their book, Managing Brand Transgressions.
Now, Dr. Shalini Jain is an associate professor of management at the Milgard School of Business at the University of Washington in Tacoma. She has published numerous articles in leading management journals. She has extensive industry, government and nonprofit experience leading and providing consulting services to state, county and city governments. And Dr. Shelly Jain is a Bret Wheat Endowed Professor of Marketing and international Business at the Foster School of Business at the University of Washington in Seattle. He has extensive publishing and editorial experience in top marketing journals and has won many executive and graduate MBA teaching awards. Prior to his academic career, he has worked in sales, brand management, advertising and general management, and is associated with several noted marketing campaigns. You’re going to love this interview. It’s very interesting and very intriguing because brand transgressions are something that as an owner, you probably don’t want to talk about or even think about, but it’s something you still need to be prepared for. So, let’s go ahead and jump into our interview.
Shalini Jain (01:56):
Good morning, Tom. Wonderful to be on your podcast. My name is Shalini Sarin Jain. I’m an associate professor of management at the Milgard School of Business, University of Washington in Tacoma.
Shalini Jain (02:09):
Hi, Tom, lovely to be on this podcast. My name is Shalindra Pratap Jain, I go as Shelly, and I am the Bret Wheat Endowed Professor of Marketing and International Business at the Foster School of Business, University of Washington in Seattle.
Dr. Tom DuFore (02:25):
Thank you both for being here. Really, really honored to have you on. And the focus I’m hoping to talk through today is about your recent book called Managing Brand Transgressions: 8 Principles to Transform Your Brand. So, I always like to start with of all the topics and all the things to be writing about, why this topic and what led you to write this book?
Shalini Jain (02:51):
So, the story goes back to several years. I was working as a professor, we published research, and one research topic that I work on is brand strategy. And within brand strategy, I have been curious about brand transgressions. And I was working on a couple of papers and then the big C happened, which was COVID. And both Shalini and I, we were quarantined. I learned in my research on the effects of pandemics that when a family is quarantined during a pandemic, that’s usually a disaster. It’s a recipe for relationship strain and families need to have some kind of a mechanism in place so that they are civilized with each other.
So, I started thinking about it and I spoke to Shalini, and Shalini will speak about her own research. She does work in business ethics and corporate social responsibility, and I said, “There is a sweet spot. I do work in brand transgressions and you do work in corporate ethics and business and corporate social responsibility, and there may be a sweet spot here where you can bring your perspective on business ethics and I can bring my perspective on brand strategy, and we might have a document here to work on.” And then over dinnertime conversations, we fleshed out the topic. We didn’t have any knockout drag out battles about it at all.
It took us two years to write this book in terms of a reasonably finished draft. So, all of COVID we spent at home most of the time writing this book, and that’s where this book came from. And during that time, 2018, ’19, the big transgression which was consuming a lot of people’s minds and sensibilities were the two crashes of Boeing 737 MAX aircraft. One was in 2018, one was in 2019. And we were reading the interviews by the CEO at that time, a gentleman called Dennis Muilenberg, and we were very curious and confused about the narrative that he was discussing in the media, which did not appear to us a really appropriate response to the two crashes. So, I think a confluence of COVID, our own research interests, and the specific transgression of Boeing 737 MAX crashes brought us to this situation.
Dr. Tom DuFore (05:12):
Wonderful. Well, great overview. And certainly those moments, obviously if you’re still living today, it’s hard to forget that very clear line with COVID and such. And of course, remember those Boeing crashes, of course. Big news. Well, one of the things I’d like for you to maybe start with is just defining for the audience how you define a transgression. What does that mean for a brand or an organization?
Shalini Jain (05:40):
So, companies, big and small, invest a fair amount of time and resources, building their brand and building relationships with key stakeholders, of course consumers, but also employees, shareholders, the community. And so, these relationships of trust are solved as implicit contracts. When these relationships hit road bumps, we call that a transgression. So, that’s a violation of some expectation that a stakeholder such as consumers may have of a brand. And this could be with product failures such as the Boeing crashes or it could be a social value and divergence.
Benjamin Franklin had famously said that no one can escape death and taxes. We would like to propose that we should add one more to corporations in particular, and that is no matter how big you are, no matter how global or local you are, you going to face transgressions. Nobody can escape it. And so, our book is intended as a blueprint to plan for transgressions, and not only to face them, but to transform the company in the process. Just to clarify, it’s a little different from crisis in the sense that a crisis could be the company is not making money. It could be a natural disaster. Versus a transgression, which is like an oops moment where you are perceived to have done something wrong.
Dr. Tom DuFore (07:24):
In having gone through the book, in some of the examples you provided, some of those were oops moments that were, it was accidental, there was no malice, there was no intent to do wrong, versus others where some of the case studies you shared there was intent to deceive or mislead consumers, or staff, or whomever in decisions that were made. So, I think that’s very well said.
And I like the oops description because it is bound to happen. It’s something we even advise our clients as they’re looking to franchise their business and they start to expand, they’re worried what happens if something happens? Our advice is generally, well, it’s not a matter of if something’s going to happen, it’s just when. When is that “thing,” whatever it might be that’s going to happen. And the larger you get, the just more likely it’s going to happen. I think that’s very, very well said. I’d love for you all to walk through the eight principles. I know there are eight and there’s a lot of substance in the book. So, before we jump into the eight principles, and walking through some of these and having a conversation on them, how can someone get a copy of your book? Where can they go to do that? Before we get into the eight principles here.
Shalini Jain (08:37):
The book is available on almost all the online platforms like Amazon, Barnes and Noble, and even the publisher’s website. The publisher is De Gruyter, which is a German publisher. And we have a website which is called Brandtransgressions.com. So, if the listener or the viewer is going to that website, there are links there where they can click and it’ll take them to one of the online book platforms, book purchase platforms.
The second part of your question. Now, coming back to the eight principles, I can do the first couple and then Shalini can take over if that’s okay. The first principle is what we call do the right thing. And by doing the right thing, what we mean specifically is to address the pain, and the hurt, and the loss that victims are experiencing as a consequence of the perceived transgression.
To illustrate this principle, let me just speculate that many companies when they’re faced with a transgression, whether it is of their own creation or it is an accidental mishap or whatever it is, oftentimes the knee knee-jerk reaction is how do we protect the brand? How do we protect the company? How do we protect our market cap? How do we protect our profit and sales? And so on and so forth. And while that is an understandable response, we believe that this needs to undergo a shift. Its completely fine to want to protect your brand, and your sales and profits’, and shareholder wealth, but the company we believe should start working or training themselves into saying, how do we protect the affected victims?
To further illustrate this point, in the first principle chapter, Do the Right Thing, we discuss the case of Tylenol in 1982 at length. And many people are aware of that case. It’s more than 40 years old and it still remains, to our knowledge, the gold template for how to respond to a very, very serious transgression. So, Tylenol faced with the situation where seven consumers of Tylenol in Chicago died from consuming Tylenol. And we unpacked the case in great detail in the chapter. It’s a fascinating case.
All the senior executives met as soon as they learned of this problem. And the CEO at that time, a gentleman called James Burke, he asked two questions. The first question he asked was, how do we protect the people? And the second question he asked was, how do we protect the brand? So, I think he has created a road map, a playbook. So, if a company faces a transgression, they are well advised to pull out the playbook of Tylenol in 1982. And so, here is the justification for why doing the right thing first as a knee-jerk reaction is the right thing to do.
So, today’s environment in particular where there is so much social media and news which travels at lightning speed, and we know there is fake news this, and fake news that, and people are making up stories that are AI generated images which are not authentic, and that’s something that companies will find hard to avoid. So, what they should do is to rather than allow the narrative to morph into something which is not suited for their own brand, they should take control of the narrative. And by addressing the victim’s pain and hurt, I think it is a wonderful way to tell the world that we are willing to face this situation. It may not be of our creation, but it is our brand which is facing the music. So, if we can keep denying it for all we care, but the narrative will go out of our hand. Somebody or the other will take on the narrative.
So, by addressing the victim’s pain, and first we show empathy, we show maturity and we are not accepting responsibility. That’s not what we are talking about, but we are saying, “We regret or we are sorry this happened to you. We understand what you’re going through. This was not at all our intent, assuming it was not intentional, and we will do everything possible to get to the bottom of it.” That gives closure, at least short-term closure to the victims. And it probably prevents many victims from starting to create a narrative which may not be the right narrative to be created to begin with. They have some closure that yes, the company’s being accountable for it and they’re going to do something about it.
Then the second principle, which is related to the first principle, actually the first principle is the parent of all principles. The second principle is take accountability, which I sort of refer to. Taking accountability does not mean that you say, “Oops, we are sorry we did this.” You may not have done it and you may not even know if you did it. So, sometimes these oops moments happen like deer in headlights moments and you say, “Where did this come from?” For instance, Tylenol ultimately was found to have not engaged any problem. They had no production issues, they had no internal employee sabotage issues or anything of that sort. And even today, the person or the individuals who created that Tylenol, who laced Tylenol with cyanide have still not been found.
So, Tylenol opened themselves up to scrutiny, to media, to consumers, to regulators, and James Burke went on TV and said that time, TV and newspapers and magazines were the main media. He said, “We will take care of it. We are accountable, we will take care of it.” And they responded with alacrity, which was unknown during that time, and they even went to the extent of telling the consumers not to buy Tylenol until we have gotten to the bottom of it. So, clearly they took a huge hit in the process. Their share went from 37% to 8%. But after 90 days of putting this plan in action, their share went up to 48%.
At no point in time are we suggesting that doing the right thing is going to take a hit. Yes, it’ll be a hit because for crying out loud, your brand is perceived to have transgressed, there have to be consequences. But if you follow this roadmap based on our case studies, and there are 25 of them that we feature in the book, you will come out on the positive side. So, second principle, as I said, is taking accountability, which is different from taking responsibility. Accountability simply is giving the victims a sense that we are going to address this problem. Even though we may not be at fault, we are digging into it, maybe we are at fault, maybe we are not, and we are going to take care of this problem. So, those are the first two principles that we delineate in the book and there are six more.
Dr. Tom DuFore (15:29):
One of the questions that comes up sometimes when I hear do the right thing. It’s a phrase that it’s used more and more today for sure. There’s a lack of definition or clarity in terms of what that actually means. So, I appreciate you giving some depth and explaining what you mean by that phrase. It’s very helpful. So, thank you very much.
Shalini Jain (15:49):
So, our next couple of principles talk about the acting with lightning speed. Again, this relates to what Shelly was mentioning, that if we do not do that, we tend to lose the narrative, and somebody else takes over the narrative and then it’ll take double the amount of effort to clear the company’s name and then rebuild trust of the stakeholders.
Dr. Tom DuFore (16:15):
Shalini, sorry to interrupt real quick there. When you say act with lightning speed, okay, I’ve read the book so I’ve got a sense of what you mean, but I’d like for you to share for someone who’s tuning in who listens to this later and they haven’t read it yet, explain what that lightning speed truly means.
Shalini Jain (16:32):
So, it is sad that in this age of digital democracy, even a few minutes is too late. So, let’s take the example of Starbucks. We talk about that in our book, and there was the famous incident in Philadelphia where two young Black customers were arrested for not ordering coffee. Handcuffed and put in jail for a few hours because they didn’t offer coffee, just simply because of that. And so, Starbucks initial response that evening was, “We’ve heard about it. We are looking into it.” And there was a lot of backlash for that lack of empathetic, cold clinical response. The next morning, the CEO realized it’s already getting too late. So, he went on national media, went on several interviews at talk shows and apologized in public saying, “The buck stops with me. You can expect more of Starbucks. We apologize. This was inappropriate.” So, several of these messages went out on social media, on national television, and this CEO of the top 10 corporations on the planet flew all the way from Seattle to Philadelphia to apologize to the victims in person. That’s a pretty unusual thing to do.
But that is again, a gold standard of how do you respond to the victims, and acknowledge that what happened to them was not right, and demonstrate your empathy rather than just words. Of course, Starbucks did a lot of other things like they had some kind of settlement for the education of these two young men and how these two young men could contribute to being a more inclusive organization for Starbucks or whatever planning, and relooking they were doing at their internal practices. And they engaged with the local communities to demonstrate that that is racial profiling is not something that is a value of Starbucks.
And of course the other remarkable thing about Starbucks, which leads to taking accountability is within, I believe it is 10 days, 8,000 Starbucks facilities were shut down all across the US so that all their employees could receive training on racial profiling. Now, of course there could be the naysayers who say, “Big deal, they didn’t do very much.” But it’s a pretty remarkable step for a company to take an amount of income that was compromised to shut down your entire operation in the US, 8,000 facilities, and say, “We are serious. We want to ensure that this doesn’t happen again.” So, these are, again, some examples of lightning speed.
I can take the example of the opposite in the case of Boeing for example. So, the tendency there was what Shelly referred to earlier, which is to deflect or to cover up. So, the initial response of Boeing when the first crash happened was, oh, it’s in Indonesia. So, probably the pilots were not sufficiently trained or the maintenance of the aircrafts were probably not up to speed. And the second crash was in Ethiopia and they continued that narrative. And first of all, it took them I think a year for the CEO to actually formally apologize to the victims of 370 odd families, which is I think Boeing… we believe Boeing lost the narrative in such a… because they failed to act with lightning speed, they actually deflected. And history has shown that a lot of this transgression was not an oops moment. They were choices that the company made because of profit. They didn’t want Airbus to get orders from their customers or they didn’t want Airbus to take away their customers. And so, they made compromises on the structural and engineering aspects of the plane, which actually contributed to the crashes.
Dr. Tom DuFore (21:30):
I just really liked the act with lightning speed because it means literally, especially as you described in today’s world, in a moment’s notice, one post on Twitter or X, or Instagram, or something and poof, all of a sudden it is global in a moment. So, I think the lightning speed is literal almost in terms of you cannot act quickly enough. So, I appreciate that description. Let’s talk about principle four here. What’s principle four?
Shalini Jain (22:02):
Principle four is to act transparently. A lot of these principles, all of our principles appear to be no-brainers. One would think, but of course. But at least our research of the last 50 years from various cases shows that that’s not necessarily the case. So, let’s take the example of Volkswagen and the diesel gate scandal. So, it was already I think number one or number two in its sales globally. But in 2008, the CEO determined to multiply their sales at a level that was not realistic, and that put undue pressure on… had had a cascading effect on all the engineers and the staff to meet those goals. And the solution to this was to install cheating devices to meet the high standards emission standards in the us.
And so, in Volkswagen’s case, if you recall, and we’ve laid this out in fair amount of detail in our book is, so first they were caught and they said, “Oh, it’s technical issues, it’s not really anything.” Then they said, okay, then there was a threat of their license being canceled in the US and then they said, “Okay, we installed it in 500,000 diesel vehicles.” And so, their confession was kind of staggered. They didn’t come clean when they got caught. Then it was found, oh, it’s not just Volkswagen, it’s several other models. Then it was found that it’s even gasoline. Then it was found, it’s not only the US but also Europe and UK.
So, every time they got caught, they revealed a little bit of transparency, and that didn’t help them as a company very much because they were perceived as obfuscating, as trying to cover up. And they would say, “Oh, it’s a few disgruntled employees and the management never knew about it,” and $32 billion and counting talk about what they’ve lost because of the lack of transparency in addition to the intentional transgression that they thought they could get away with it.
So, there’s this talk about companies often doing a cost-benefit analysis saying that, okay, if we get caught, the cost of paying the fines is lower than the profit we’ll make if we can keep doing this. And it’s really like saying, oh, you’ll get away with it. But really? Oftentimes we used to wonder, these are not small entrepreneurial companies. These are established global brands. And so, we would think, what were they smoking when things, right? What made them make this choice? And did they really believe they could get away with it? That’s the surprising aspect for us at least. One would think that there are some guardrails where at least the legal counsel comes in and gives you advice when the transgression happens. But do they not give you advice before a transgression saying, “This is dangerous stuff, don’t do it?” It can have serious consequences.
Dr. Tom DuFore (25:23):
Shelly, it sounds like it’s bouncing back to you for principle five here.
Shalini Jain (25:28):
Thank you. Thank you, Shalini. So, yeah, just one thing I want to add about communicating transparently. There is an old case which we discuss in the book about a brand called Dalkon Shield, which was the first intrauterine contraceptive device ever, IUD, which we call IUD today. They’re very common for preventing births and women use them. And the first IUD was actually defective and it caused literally thousands, and thousands, and thousands of women to deal with pain and damage to their bodies. And some of them died. And it took eight years for the company to go public with the dangers of Dalkon Shield. Eight years. And they were dithering for eight years. They were using all kinds of explanations to deflect the blame. And if there is an example of not being transparent, it was Dalkon Shield and ultimately the company went bankrupt.
The fifth principle is to choose principle of a profit. And what we are trying to say here just to disambiguate what we mean here, we are not saying give a profit. That’s not what we are saying. We are saying through examples like Tylenol. At today’s prices, Tylenol’s recovery effort cost $300 million and it did not do a clinical cost benefit analysis from our understanding, they just did what they believe was the right thing. And ultimately that expense showed up as a positive outcome when their share went up to 48%. Starbucks recovery effort from that disaster in Philadelphia cost them close to $17 million in training costs, and so on and so forth. And I think that we think the brand transformed and came out the better after that whole incident. So, what we are saying is if you are obsessed with profit and profit maximization is your mantra, whether you’re awake, or sleeping or whatever, then you are on a slippery slope and you’re probably faced with a lot of banana peels around you.
And again, we talk about the Boeing case. According to a fairly good set of… a good evidence, it seems that the cultural Boeing changed when McDonnell Douglas and Boeing merged. And the story goes that McDonnell Douglas was extremely profit-oriented and Boeing was extremely engineering-oriented. However, after the merger, questions were asked, has Boeing taken over McDonnell Douglas or has McDonnell Douglas taken over Boeing? Because Boeing’s culture changed after that to being a lot more focused on profit than other potential pursuits. So, that’s where some people believe the roots of these two crashes really, really started at that point in time. And since then, according to our understanding of the Boeing case, we believe, Tom, that they compromised on… they became very competitive because Airbus was getting a lot of orders and they were not. So, they A, became competitive. B, They started responding with lightning speed, but in the churning out of their aircraft, and in the process, certain compromises were made. Compromises in terms of sourcing compromises, in terms of due diligence, and so on and so forth.
And we have heard stories of whistleblowers coming forward. And the last CEO of first Boeing before the current CEO, Kelly Ortberg, he said that, “Yeah, we are dealing with a whistleblower problem. We’ll see what to do with it.” So, this principle choose principle of a profit is really saying that if you follow the right principles, profit will follow. We are not saying that profit is not a good thing and that you should ignore profit at all. We understand profit is necessary. You need to make money to stay competitive, you need to make money to be innovative, to invest in R&D, and so many other good things that you need to accomplish, including rewarding your shareholders. So, we understand that. However, when that becomes your single-minded pursuit and profit at all costs, that’s when things start going downhill.
Then the sixth principle is treat each life with dignity. So, this is talking about, yeah, you can do a clinical cost benefit analysis as Shalini mentioned, but reflect inside, look at your DNA, is it, again, a purely economic endeavor that you are in? Or you’re treating everybody with dignity? And the case that we talk about the negative case is that of this famous Italian label called Dolce & Gabbana. And DNG is a very big luxury brand as we know. And they were in China, they were lucky to be in China, which is one of the largest luxury markets in the world. And for a fashion show, they wanted to create some word of mouth, some buzz. And they created three advertisements which showed a beautiful Chinese lady eating Italian food with chopsticks. And she was clumsy doing it. And there was a male voiceover, which was guiding her how to eat Italian food with chopsticks.
So, this set of ads, the listener and the viewer should see for themselves, they can YouTube, they can search for these ads, and they will see why these ads created such a huge nosebleed among Chinese people in specific and to a lot of fashion followers globally. The ads were perceived to be sexist, to be misogynistic and to be racist. And so, we distinguish between a brand transgression and the title of the book, Managing Brand Transgressions. We understand these mistakes can happen. You did not realize what you were doing, but how do you respond to it? How do you manage? Is where we think DNG really, really did not do the appropriate thing in our understanding. So, according to some sources, one of the founders posted on his Instagram that Chinese eat dogs. And he was basically saying this in a moment of defensiveness, in a moment of frustration, that these people don’t understand what is going on is the implication, we think, what was happening.
Ultimately Dolce and Gabbana, they lost a lot of footing in China and they haven’t regained it even after five years. So, they indignified the Chinese consumers or Chinese people. They indignified them. There was no death happening. There was no physical harm. There was clearly a conflict with social norms and social values, and they were not quite dignifying the Chinese consumer. A really beautiful case that we talk about in the book is that of Ben & Jerry’s, which is an ice cream brand for crying out loud. So, Ben & Jerry’s is known the world over, definitely the US, for being an activist brand, if you want to use that word, activist brand.
And what we found remarkable in the Ben & Jerry story was not because they were an activist brand, but because any marginalized segment of the population they used to support in visible and invisible ways. If they’re marginalized, it’s game on for Ben and Jerry’s. Either they name flavors after that segment of population, or they create some social initiatives to support that segment or whatever. So, they they’re seen as liberal and maybe there is a political ideology issue that is going on there, but that is not why we think of Ben and Jerry’s as an example of a brand which treats each life with dignity. Think about LGBTQ, think about people who are from minorities, other kinds of minorities, and they are always in the front. And it costs them, it’s a hit to them because many consumers don’t support Ben and Jerry’s in the process, but they have been very clear about what their brand’s values are. So, that’s the sixth principle, which is treat each life with dignity. I will stop there and please, if you have any questions, and then Shalini can conclude with the last two principles.
Dr. Tom DuFore (33:43):
That’s great. Shalini, let’s have you jump into principle seven and number eight.
Shalini Jain (33:48):
So, principle seven is leadership sets the tone. So, I referred to Volkswagen when the whole scandal broke about diesel gate. They said, “Oh, there were these seven or eight disgruntled employees.” Another example is the sexual misconduct scandal of Fox News starting with… and so there too, there were these various non-disclosures which prevented staff from speaking up. And what we have found in the course of all our research over 50 years in all these cases is that invariably, both positive and negative responses to transgressions begin at the top. Leadership sets the tone. Whether it was Dalkon Shield blaming consumers for their lifestyles and sexual behaviors for the challenges, whether it was miscarriages or deaths, rather than accepting the problem in the filament that was in the IUD, or it was Starbucks CEO flying across to apologize in person.
We talk about the Taj Mumbai, which is a seven-star luxury hotel in India, which was the venue for a terrorist attack. And the culture that has been ingrained by the leadership into all the employees from the time of hiring is the customer is equivalent to God and customer’s service is our credo. And several employees at the Taj died protecting guests and residents during the terrorist attacks. So, we have example after example, case after case where we find that it is the leadership. And it has to be visible, it has to be vocal, it has to be repeated again and again for it to percolate and trickle down right to the front lines. If there is an expectation that frontline employees or middle managers will somehow set the tone, very rarely does that happen. Even if they try without the support of leadership, the culture of the company very rarely changes. So, we propose that it is the value and the very visible expression of the leadership that will determine how a company responds to a transgression.
And the last, but by no means the least is the principle which is called build brand authenticity. So, authenticity is a buzzword. We hear it a lot. What exactly does it mean in the context of transgressions? We claim it means that a company states its values and then acts on them obsessively without compromise. And so, the case that we talk about is Patagonia in this case. And here the CEO started just manufacturing mountaineering equipment, and was very passionate about the environment and realized that his equipment was damaging the environment. And then of course they diversified into apparel and all of those things. And all throughout its existence, Patagonia has stood by its credo, which is creating no additional damage to the planet. Whether it is the switch to organic cotton, even at the cost of higher manufacturing costs, whether it is everything in their operations.
So, the famous ad that they have had during Thanksgiving, which is the time when retailers are looking to make a lot of money, they have the ad where they had their fleece jacket and said, “Don’t buy this jacket.” So, here’s a company advertising, “Don’t buy our product.” Basically trying to raise awareness among consumers. Do they really need the jacket? And they should only consider buying it if they actually need it. They’re one of the companies that started officially a reuse, repair and recycling program. So, these are unusual activities for a for-profit company. And so, Mr. Chouinard, the CEO, has said, “People think I am a little eccentric.” And he says, “But the reality is that every time I have chosen for the planet, I have made more money.” And so, this we thought was a great example where you stand by your values and you believe in them, and you are actually an exemplar on how you can make lots of money and still be fundamentally responsible.
Dr. Tom DuFore (39:05):
As it describes, it’s not just “being authentic.” The authenticity is that what you’re saying, and what you’re doing, and all of those things inside and outside the organization, they all are together. They’re all in lockstep with one another. So, it’s very, very well said. This has been a great conversation so far and this is a great time in the show, we make a transition and we ask every guest the same four questions. So, I’d love for each of you to answer these. And the first question we ask is, have you had a miss on your journey and something you learned from it?
Shalini Jain (39:42):
In graduate school, GPAs is a big deal. And I was in graduate school, I had GPAs that I was not proud of. And I teach, and so this is a story I share with all my students, that a GPA doesn’t define me. The way that I faced that was that I got off my high horse and asked for help. So, sometimes ego gets in the way, and asking and receiving help is a very important part of a journey. And so, that’s my experience.
Dr. Tom DuFore (40:20):
Wonderful, wonderful. Thanks for sharing. Shelly, how about for you?
Shalini Jain (40:24):
I really wish we had another child. It’s too late now. It’s too late now. I think maybe no. Maybe not. There are some Hollywood celebrities who are 65, 70, 75 years old and they have children, but that’s one miss. And the second miss, I think you can call it a miss. I have allergies to pets, dogs and cats. And of late, when I see dogs walking in our neighborhood, I just completely melt looking at how cute and lovely they are. And I keep talking to my wife, Shalini, “Hey, do you think I should get allergy shots? Do you think I should get allergy shots?” And she keeps dissuading me from it. And she has good wisdom, so I respect what she’s saying. Those are the two things I want to share.
Dr. Tom DuFore (41:04):
That’s great. Thank you for sharing. Let’s look at the flip side of this now. Talk about a maker or to a highlight. So, we’ll go reverse order. So, we’ll have Shelly and then Shalini. Go.
Shalini Jain (41:15):
To be perfectly honest, this book is a highlight we never, ever imagined. I think, I don’t know about Shalini, I never imagined that we will be a family of book writers to be honest. And when this book came together, to be honest, I think both Shalini and I are still really proud and in a state of disbelief that we actually have published this book. And the joy of this is that Shalini’s dad is 98 and her mom is almost 90, and we were able to do this in their lifetime. So, we feel incredibly happy that they are so happy that we are book authors.
Dr. Tom DuFore (41:52):
Wonderful. Shalini, how about for you?
Shalini Jain (41:56):
Again, I’m talking about my journey is, sometimes you feel you may not be the sharpest knife in the drawer. Sometimes I think everybody is plagued by the imposter syndrome. My credo has been, nobody can beat me on effort, so I just keep trying, and trying, and trying. I just absolutely refuse to give up, and I’m so proud of that and I’m here to tell the tale, I guess.
Dr. Tom DuFore (42:29):
Wonderful. Wonderful. Well, let’s talk about a multiplier. The name of the show is Multiply Your Success. Some folks think of this as a force multiplier, and we just get a great cross section of responses to this. So, have you used a multiplier to maybe grow yourself personally or professionally. Or organizations you’ve been involved with? And we’ll have Shalini go, and then Shelly, on this one.
Shalini Jain (42:54):
I’m going to talk more about how I have experienced multiplier effects in the course of my career. Two things that have informed and driven me is, one, courage, and two, an overriding desire to create value. So, our goal is that we want every organization to have a toolkit or a ready reference to not only be successful, but also to make a difference, like a win-win. And so, that’s what drives me. So, yeah, over to you, Shelly.
Shalini Jain (43:37):
We have a mentor, he passed away last year. His name is Daisaku Ikeda. He was a Japanese philosopher, poet, really wonderful, wonderful, wonderful human being. So, he taught us this notion of value creation in his writings. He really showed us how to win in life by helping supporting the planet, the people, and everything else. So, in my teaching endeavors, there’s a lot of research, and books and all that. But in my teaching endeavors, when I started teaching after graduating from the PhD program at the Stern School of Business in NYU, I was really struggling my first year as a professor because I was suddenly like a deer in headlights. And all these students had dreams and goals, and I didn’t know what to do with it. I was really, really nervous and anxious. And I think our mentor, Daisaku Ikeda, said that break open shell of selfishness and let your selfless self emerge.
And that was a turning point where I said, I’m focused so on myself, that is the reason for my anxiety and my lack of confidence. What I need to do is to focus on how I can bring students closer to their dreams. What can I do today in my class so they feel, “Oh, I took a step closer to my dream?” So, the focus shifted from focusing on myself to focusing on their happiness, and their joy, and their victory. And as a consequence of that. And that’s reflected in the book in a very subtle way. I have been winning accolades forever in my career as a teacher. And to be perfectly honest, it’s not about me. It is about this shift where I’m focused on taking care of students rather than being the Tom Cruise in class, so to speak. So, that has been a real multiplier for me.
Dr. Tom DuFore (45:25):
Excellent, excellent. Well, the final question we ask every guest is what does success mean to you?
Shalini Jain (45:32):
So, I think part of it has been shared. I have shared in the earlier part of this discourse. For me, success is when truly, truly everybody wins. Everybody wins. And in the process, sometimes we might think we are taking a hit. We might think we are compromising on our own goals and dreams, but to put it in a manner, it’s the heart that matters. If our heart is in the right place, our goals, our dreams, our desires will inevitably get fulfilled if our heart is in the right place. That for me is real victory.
Shalini Jain (46:10):
Success for me is trying your very best and then letting the universe take over.
Dr. Tom DuFore (46:17):
Very, very good. Well, as we bring this to a close, is there anything you were hoping to share or maybe get across that you haven’t had a chance to yet?
Shalini Jain (46:27):
The book comes across, one of my close friends asked me, “Is this book only for big brands? Because you’ve cited Starbucks, Boeing, Volkswagen, Nestle, Fox News.” I said, “No, no, no, it’s not for big brands or big corporations.” We cite the example of Patagonia and how it started out as a one-man operation. Schoonart started this company, and the values and their goals have stayed with the company forever. So, as an entrepreneur, as a startup business person, you have an opportunity to define the DNA of your organization. And the eight principle playbook that we have published we think has value for even those people.
Dr. Tom DuFore (47:10):
Dr. Shelly and Shalini, thank you so much for being guests on our podcast today. Just a fantastic interview. And let’s go ahead and jump into today’s three key takeaways. So, takeaway number one is when they talked about the idea of a transgression with your business. And I think the takeaway is that whether you’re a big company or a small company, transgressions happen. And a transgression is when the relationship you have with your customer, this relationship that’s built on trust, that trust is somehow violated and it creates this transgression. And I really liked when they said that no matter how big you are, you’re going to face a transgression. And that ultimately is what led them to create the book.
Take away number two is when they talked about the eight principles that they laid out in the book. Principle one, do the right thing. Principle two, take accountability. Principle three, act with lightning speed. Principle four, communicate transparently. Principle five, choose principle over profit. Principle six, treat each life with dignity. Principle seven, leadership sets the tone. And principle eight, build brand authenticity. So, that’s a quick summary of the eight principles. Take away number three is when they said toward the end of the episode, I think it was in the multiplier when they talked about having courage and to have an overriding desire to create value. I thought that was fantastic. So, having that overriding desire to create value for your customers, for your stakeholders, for your team, creating that value and that overriding desire will create the courage for you to take those steps or do things to help support it. And now it’s time for today’s win-win.
So, today’s win-win goes back to the whole idea of transgressions and really what their book title is, Managing Brand Transgressions. And I think the win-win is recognizing that transgressions are going to happen no matter what you do or don’t do, knowingly or unknowingly. Hopefully you’re not knowingly creating a transgression, by the way. So, let’s try to eliminate those or intentionally creating a transgression, like they provide some examples in their book of leaders of organizations where there seem to be intentionally creating a transgression.
But I think the win-win is recognizing the transgressions are going to happen and that having a plan or a pathway with their eight principles is going to be a win for you and for all of your stakeholders that may be impacted by the transgression whenever that occurs. And so, that’s the episode today, folks. Please make sure you subscribe to the podcast to give us a review. And remember, if you or anyone might be ready to franchise or business or take their franchise company to the next level, please connect with us at bigskyfranchiseteam.com. Thanks for tuning in and we look forward to having you back next week.