Jon M. Huntsman School of Business

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Thursday, November 10, 2011

Penn State now "Penance" State

A brand is a living, breathing thing – built over time. Brands, like people, have good days and bad days. Unfortunately, as the stunning revelations coming out of Penn State this week demonstrate, the power of a brand that took years and even decades to build can be destroyed in a matter of days.

Penn State and Joe Paterno are the definition of big-time college football. The image of Paterno – a football professor with a tie, thick glasses and Nike coaching shoes - has stalked the sidelines in Happy Valley since 1950. The success of the football program has driven the reputation of the university for decades. The Nittany Lions won national championships in 1982 and 1986.

Eric D. Schulz
Just how powerful is Joe Paterno? In 2004 the university president demanded his resignation. Paterno ignored him and kept on coaching. He and his wife Sue have donated over $4 million to the university. The school library bears his name, as does an ice cream flavor at the campus creamery.

In the past three days, the reputation and brand of both the school and Paterno have been destroyed as quickly and completely as New York’s Twin Towers. In case you haven’t followed the news, a former defensive coordinator under Paterno, Jerry Sandusky, has been accused of sexually assaulting young boys over a 15-year period. In 2002, a graduate assistant witnessed a sexual assault by Sandusky on a 10-year old boy inside the football locker room showers and reported it to Paterno. Paterno in turn told his superior, school athletic director Tim Curley, who took it to the school’s senior vice president for finance and business, Gary Schultz (no relation to me, thank heaven).

All three decided that protecting the power and prestige of the brands of Penn State and Joe Paterno were more important than doing the right thing. They swept the information under the table and never reported it to police. Curley and Schultz have been charged with perjury and failure to report to authorities what they knew in a Grand Jury investigation, but Paterno has not been charged (yet).

Regardless, the brand reputations of Penn State and Joe Paterno have lost their luster. The school will need to do some serious damage control. Their plight is similar to that which the Miss America pageant faced back in 1984 when nude photos – pics that had been taken back in 1982 -- surfaced of then Miss America Vanessa Williams (yes, THAT Vanessa Williams – the singer and actress, most recently seen on “Ugly Betty”.) The pageant had brushed with scandal before, and responded in 1985 by crowning the most squeaky – clean contestant they could find, Utah’s Sharlene Hawkes.

Penn State will need to sweep out their entire athletic department leadership, as well as their football coaching staff, and start over with a coach and new athletic director above reproach, never tainted or even hinted at by scandal or NCAA violation. If they do – and if the football team excels – they will be able to regain their luster quickly. Winning fixes everything in sports (unfortunately sometimes – as in Kobe Bryant / Ben Rothlesberger / Michael Vick cases). For Joe Pa however, there will be no redemption. The man who spent over 60 years building his reputation will need to slink off into retirement and stay away from Penn State forever. It's a shame, but when he walks away from his resignation press conference, that will be the last we will ever see of the winningest coach in football history.

The moral of this story is something all brands should take note of. No matter how big or powerful a brand you have stewardship over, morality trumps all. Do not try to “protect the brand” by actively doing, or ignoring, immoral acts. Don’t hide negative test results from the FDA or other government agencies in place to protect the public. Don’t – as auto companies are famous for doing – have “statistical” acceptability of product failures. A death due to your product is not acceptable under any circumstance.

When I was at Coke, I was standing alongside the Chief Marketing Officer, Sergio Zyman one day, when an international Coke brand manager approached him and started explaining the idea she had for a Coke brand consumer promotion in her country. His reply was the height of brand arrogance. He said “Let me ask you this. Do you think you have within your power the ability to destroy brand Coca-Cola?” “Of course not”, she replies. “Then do whatever you want”, he said.

Unfortunately, as was the case at Penn State, too many leaders think that way.

- Eric D. Schulz

Eric D. Schulz is the co-director of strategic marketing and brand management at the Jon M Huntsman School of Business at Utah State University. Prior to joining the University, he spent five years as vice president of marketing for the Utah Jazz (NBA); he previously was VP of marketing with the XFL Football League, and served as a General Manager in minor league baseball. He can be reached at

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