Picture this: It’s the cup final of a thrilling end-to-end football match, each side searching for the all-decisive lone goal. Just when it seems like a goal is about to happen, there’s a sudden twist! The ball hits the net, but the goal scorer is rueing this, and the goal counts for the opposition team! It’s the dreaded own-goal situation. In business, just like in football, the stakes are high. While everyone strives for success and profit, no one wants to be caught in a “Ratner effect” the classical moment that jeopardizes the entire game.This reality haunts every speaker who stands in front of an audience to deliver a speech – the worry is not about what to say; it’s about what to not say.

Doing a Ratner

(colloquially) to score an own goal in business communications

“The Ratner effect was evident when the executive’s dismissive remarks about customer complaints caused a sharp decline in brand loyalty.”

In 1991, Gerald Ratner, the former CEO of Ratners Group, a British jewellery company, famously disparaged his company’s products while giving a speech, leading to a dramatic decline in the company’s market value, and his eventual resignation. In his attempt to tout his jewellery empire, he humorously described his products as “total crap – People say, “How can you sell this for such a low price?” I say, “Because it’s total crap.” He added: “We sold a pair of earrings for under £1, which is cheaper than a shrimp sandwich from Marks and Spencer but probably wouldn’t last as long.”

This professional screw-up, hence termed “Doing a Ratner”, highlights the impact that thoughtless remarks can have on public perception and a brand’s success. It emphasizes the importance of strategic and considerate communication by leaders and representatives of any organization.

One minute of good humour ruined his empire

In a broad sense, Ratner only exemplifies the typical successful CEO who was honoured with the opportunity to speak to a six-thousand audience at the Institute of Directors in London. He didn’t miss the chance to entertain his audience with witty remarks about why his company was one of the largest jewellery retailers in the UK. However, he couldn’t have anticipated the consequences of his harmless joke, which led to customers boycotting his products and a loss of half a billion in shares. The story of Gerald Ratner and his billion-dollar jewellery empire serves as a reminder that actions have reactions (oh boy, Newton was right!). Regardless, it remains a textbook PR mess for the ages.

Needless to say, in modern times, CEOs don’t necessarily have to stand in front of 6,000 people and commit a Ratner to ruin their businesses, especially in a world awash with revolutionized and modern marketing. CEOs have to be alert and sensitive to their surroundings. The modern marketing communication landscape dangles along lines that may easily lead to catastrophic consequences.

Beware of Casual Jokes

Take a cue from Ratner: Avoid Casual Jokes! Get ready for a lesson from Ratner: No More Casual Jokes! Gerald Ratner never intended to spark a crisis among his customers, but one light-hearted remark ended up destroying his entire empire. Picture the disbelief on Ratner’s face when he woke up the next day to the realization that his business was at the centre of a media storm. For Gerald, a lesson he learnt rather too late was that a self-respecting CEO remark would not make remarks that come at the expense of his business image – it is more important to maintain the existing public perception of your business than to try to create a new one.

But that’s not the end of the story…

The aftermath of the “Ratner” debacle saw Gerald Ratner step down from his position as the CEO of Ratner Group. The company adapted to its new harsh reality, rebranded as Signet Jewellers and is now the largest retailer group of diamond jewellery in the world. Ratner had taken over the business from his father when it was struggling and turned it into a jewellery empire using his image. This worked until his fateful blunder, to the extent that his charismatic image wasn’t enough to keep the business afloat despite concentrated PR efforts using his image to work the magic.

Walkaway…

This story is more relevant in contemporary times than it has ever been in history. Ratner’s story teaches the tweet-happy fingers of chief executives to be conscious of their assertions, especially in the age where “the internet never forgets”. And this time, it’s not only in front of 6,000 audiences, it’s the whole world, in just one moment…

And we all know how it ended the first time.