Embattled golfer Tiger Woods officially lost his first sponsor this week in the wake of allegations he had indulged in numerous extramarital affairs. As the accusations mounted, Woods announced last Friday that he would take an indefinite hiatus from golf to focus on healing his family. Two days later, global consulting firm Accenture ( ACN) announced it was ending its six-year relationship with Woods, stating that although "it wishes only the best for Tiger Woods and his family," the company had determined after "careful consideration and analysis" that Woods was "no longer the right representative for its advertising." Other sponsors have been more discreet in distancing themselves from Woods. Gillette, a unit of Procter & Gamble ( PG), issued a semi-sympathetic statement that "
as Tiger takes a break from the public eye, we will support his desire for privacy by limiting his role in our marketing programs." AT&T ( T) took a similar tack, stating that it was "reevaluating its ongoing relationship with him" even as it expressed support for his decision and sent good wishes to Woods and his family. Nike ( NKE), on the other hand, has expressed its "full support" for Woods, optimistically looking forward to his return to golf. However, Nike hasn't continued to run advertising that features Woods. According to research firm Nielsen, Woods hasn't appeared in a prime-time television commercial since Nov. 29, when the story first broke. Nike may be supportive in principle, but it clearly isn't prepared to spend a lot of advertising dollars to prove it in practice.
Woods' situation demonstrates how damaging ethical lapses can be when an individual is his own brand. Woods remains, as Nike called him, "one of the greatest athletes of his generation," and his alleged indiscretions had nothing to do with his golf game. If Woods' endorsement used to entice golfers to buy particular brands of sporting equipment in the hope of improving their games, his off-the-course escapades theoretically shouldn't make much difference. But to the extent that Woods' endorsement was valuable because he seemed like an especially likeable guy, the revelations of the past two weeks must have done his brand serious damage. Accenture sells business consulting services, not golf shoes. No wonder it was the first of Woods' sponsors to dump a representative whose judgment suddenly seemed questionable at best. Can Tiger Woods make a comeback? Perhaps, if he makes an effective apology, first to his family and then to his fans and sponsors. In my last article, "Effective Business Apologies: The Innovators," I described the six essential elements of an effective business apology. Woods already has completed the first two elements: He said he's sorry, and he has taken responsibility for his mistakes. Now, he needs to make amends.
Unfortunately, it may be tough for Woods to put things right. Giving up golf for the good of his family was a massive sacrifice that even the most disappointed fan could appreciate, but it doesn't seem to have satisfied his wife. Elin Nordegren reportedly has consulted a divorce attorney and allegedly plans to leave Woods after the holidays. If Woods can't produce a mended marriage, he'll have to find some other way to persuade fans -- and potential sponsors -- that he deserves a second chance. Here's how. Regardless of whether Nordegren leaves him or not, Woods would be smart to take a break from the limelight. Assuming he wants to rehabilitate his brand and not just fade back into private life, he'll need some time for sober reflection. Getting away from the scrutiny of the public and the press will give him a chance to work through whatever personal issues drove him to his downfall. One of the most important elements of making an effective apology is taking the necessary steps to ensure that nothing similar ever happens again. Woods will need to take those steps so that if and when he returns to golf there won't be any reruns of the last two weeks. Neither his fans nor potential sponsors would stand for it. Woods also would be wise to remember that he's not the only famous figure to fall from grace; he could learn from two other men who successfully rehabilitated themselves after similar stumbles. Charming British actor Hugh Grant publicly apologized and took a time out after getting caught with a prostitute, and was soon back on the big screen. More recently, former New York Governor Eliot Spitzer resigned in disgrace after getting caught with multiple prostitutes, and left public life for a while. But Spitzer quickly returned, reinvented as an expert on business ethics, a topic he knows inside and out. What saved Grant and Spitzer was not only their willingness to step up and publicly apologize, but the inherent talent that made them famous in the first place. Whatever questions one might have about Woods' judgment, his talent is undeniable. It won't be long before his fans are clamoring to watch him play again.
And what are the lessons for businesses in this sorry situation? There are at least three. First, reputation may be intangible, but it has a direct impact on the value of a business. Cutting ethical corners may have short-term financial benefits, but it can also do lasting harm to your business' bottom line. Consumers always prefer to do business with companies they trust. They'll walk away from businesses that seem too shady. Second, no one is perfect, and even the best and brightest of us come up short from time to time. When mistakes happen, as they inevitably do, a sincere and timely public apology is called for. Delays and denials serve no positive purpose; they just give problems a chance to grow into disasters. Third, the excellence of a business' products and services is what will best carry that business through harm to its reputation. A company with mediocre offerings may not outlive a public relations nightmare. When it comes to reputational injuries, the superstars are most likely to survive.