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  • Penny Clark-Hall

How to handle a social licence crisis

A recent social licence crisis with MGA Entertainment serves as a reminder to all that how we handle ourselves in a crisis is the difference between turning it into an opportunity or a failure.


The crisis

Not only is the company in hot water (or cold water) over its Lol Surprise Dolls being accused of sexualising children it's CEO had to delete his twitter account after attacking influencer, Amino Mucciolo, in a "Trumpesc" fashion after claiming one off the Lol Dolls was using her image.

The product has been pulled from BIG W (Aus) and Toys R Us (UAE) shelves after mounting public pressure from parents and there are demands for other retailers such as Kmart and Target.


I've looked and I'm yet to find a public apology from the company acknowledging the upset their product has caused other than the following statement which offers no accountability and has yet to be picked up by or put to mainstream media.


“L.O.L Surprise! is a fashion-forward doll brand designed to be fun and expressive,” a spokesperson told Fast Company. “We work very hard to be a brand that listens and adapts to our fans’ requests. We acknowledge the recent feedback received and thank you for bringing it to our attention. We have implemented comprehensive corrective measures to our design and approval process while ensuring the essence of the brand is kept intact.”


Looking at their company values and mission there is also little in the way of respecting its customers (Mothers) and the influence the company has in shaping young minds. They do however, state that the consumer decides...

3 rules of handling a crisis


1. Front-foot it

Without your customers (a crucial stakeholder in your business) you don’t have a business. So get brave and show that you value them and the impact you have on them. When businesses fail, the trend is to go into recovery mode or damage control. This sets the wrong tone as it shows you only have your company's best interest at heart.


Use the opportunity to learn from, and get to know, your stakeholders better. You wouldn't be in this position if you knew and were connected/aligned to their values. Be accountable, people are far more forgiving of you when you own your mistakes and the impact you have had on people. They can see straight through a fake apology or not an apology at all as is the case above.

2. Be a good human

Being empathetic, respectful, genuine and accountable when you have got something wrong is a far more effective way to rebuild trust with your affected stakeholders.


How a business handles itself in a crisis has to date been their biggest downfall when it comes to losing trust (your Social Licence). Their is a general failure to respect stakeholders enough to be honest and transparent when it counts.


When we fail, there’s no more blending in, you are the focus of attention and how you behave in your darkest hour is very telling - this is your authentic self (brand). Before you go into damage control, think first about how a ‘good human’ would respond.

3. Make meaningful change

Your actions speak louder than words. Don't be a mouthpiece that says what people want to hear and then continues doing the same thing, expecting different results - that's the definition of insanity.


Fix the problem. Your failure/crisis is a gift of research/intelligence towards improving your business. But it is only as valuable as what you do with that knowledge. Let your stakeholders in and include them in the solution by using their feedback and engaging with them to build stronger relationships.


Doing what you say you will do (following through) earns you the privilege of being taken at face value. That is the trust your earn, which your social licence is measured on.

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© 2019 by Penny Clark-Hall of Social Licence Consulting. All rights reserved.

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