Red Bull has shaken up its US leadership and global marketing operation. Here's how the energy drink company has responded to turmoil over Black Lives Matter and calls to increase diversity.
Red Bull has been through a series of executive-level changes over the past two months due to internal tension over the energy drink giant's diversity efforts and its response to Black Lives Matter. The company's North American CEO and CMO were fired while working to expand outreach to the Black community. Insiders said the turmoil reflects a cultural divide between Red Bull leadership in Austria and the US, its largest market. Visit Business Insider's homepage for more stories.
In July, energy drink giant Red Bull fired three top executives, including its North American CEO and CMO, and dissolved the cultural marketing divisions that organized events like live music festivals. These moves came after internal tensions over Black Lives Matter went public and an offensive slide from a company presentation that was first published by Business Insider and drew attention from major media outlets like The Wall Street Journal. The departed execs had been working on a plan to increase Red Bull's diversity and outreach to the Black community, but insiders said that project's future is now in doubt. An interim team has been named to run the organization in North America while Red Bull seeks new leadership. The turmoil came as Red Bull's sales continued to grow. The company said it sold nearly one can for every person on earth in 2019 and bounced back from a brief coronavirus-related dip to gain market share over chief rival Monster this year. In recent weeks:
More than 300 employees signed a June 1 letter addressed to North American CEO Stefan Kozak and president, CMO Amy Taylor that questioned the company's "public silence" regarding the Black Lives Matter movement. It asked for more detail on how the company, which has often partnered with Black celebrities, would support its Black employees and the Black community at large. Employees later leaked a slide from a February corporate event that used a world map that described India as "call centers," Africa as "zoo animals come from here," and the Middle East as "evil doers." Employees said colleagues warned organizers not to use it and made complaints to human resources. Three weeks after the leak, Red Bull's corporate leadership in Austria fired Kozak, Taylor, and global head of music, entertainment, and culture marketing Florian Klaas, whose team was said to have chosen the slide. It also dissolved the teams that organize sponsored music festivals and other cultural events. Insiders called the firings acts of retaliation. "We reject racism in every form," Red Bull's board wrote in an all-staff memo. An internal video from June 17 laid out the diversity programs Kozak and Taylor were developing when they were fired. They included collaborations with Chance the Rapper's charity and a consulting firm that specializes in diversity as well as new employee resource groups. SEE ALSO: Fewer than 3% of US executives at ad giant Havas are Black. Read the deck outlining its ambitious plan to increase diversity. Join the conversation about this story » NOW WATCH: Swayze Valentine is the only female treating fighters' cuts and bruises inside the UFC octagon
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Inside the biggest independent ad agency, The Richards Group, where some say an old-school culture that included all-male retreats fueled racism and sexism
Summary List Placement In late 2019, executives from PF Chang's China Bistro came by The Richards...Summary List Placement In late 2019, executives from PF Chang's China Bistro came by The Richards Group's office after the ad agency won their business. The Dallas-based agency was known to regularly host games to entertain clients and visitors, and agency founder Stan Richards described this one to the PF Chang's execs as "I'm not eating that," a variation on "two truths and a lie," where agency employees would read descriptions of four Asian dishes, one of which was fake. If the client guessed wrong, one of the employees explained, they would "send all 752 of us on a trip to Asia for free." The real foods, the script went, included turtle jelly, "now available at your local Chinese supermarket," which "might not make for the best complement to peanut butter." Duong Dua, or Vietnamese coconut worms dipped in fish sauce, was described as "Creepy. Crawly. Nope." The fake entry was for a dish called "Firecracker Cricket Legs." "Plant-based food doesn't have to mimic meat to sound appetizing. In the Philippines, sometimes it can mimic bugs. Like the Labassin Waterfall restaurant's snacky dish Firecracker Cricket Legs," the script read. Agency leaders asked everyone to chant "I'm not eating that!" at the end of each description. The blowback in the building was immediate. Two employees said they declined to participate in the exercise, which some described as "tone-deaf," xenophobic "schoolyard humor," and "racist." Richards told Business Insider he didn't see the script beforehand and didn't realize it would be a problem until he learned that some employees had been offended, at which point he apologized. A PF Chang's a spokeswoman said the chain "would never knowingly participate in anything that demeans or negatively characterizes" Asian food and culture, adding, "We are guided by those foundational values and seek partners who are similarly aligned." The chain ended its relationship with The Richards Group in April due to pandemic-related budget cuts. The Richards Group now faces steep losses after racist comments by the founder Richards built a steady business over 44 years by creating classic campaigns like Motel 6's "We'll leave the light on." Today, it's the largest independent agency in the US, with some 600 employees and around $200 million in revenue last year. But now its founder is out and the agency faces steep losses in the wake of racist comments Richards made earlier this month. The 87-year-old had called a proposed ad campaign for Motel 6 "too Black" and said it might alienate the chain's "white supremacist constituents," AdAge first reported. Major clients including Motel 6, The Home Depot and Keurig Dr Pepper fired the agency. The Richards Agency has lost an estimated 40% of its business and may have to lay off around 40% of staff, Richards told The Wall Street Journal. A Motel 6 representative said the company was "outraged" by the statements, calling them inaccurate and "in direct opposition of our values and beliefs as an organization." Richards, for his part, said he "didn't really do anything wrong." He said he rejected the ad because it wasn't broad enough in its appeal. He also pointed fingers at the ensuing media coverage. "I used three words to say why I was rejecting it, and those are the three words that caused such a tremendous uproar and cost us a lot of business," he said. "What's sad about that is that somebody who was on our payroll, that we were paying, decided that he or she was going to do something that would destroy the agency, so somebody went to the media with it, and it had a profound effect." According to more than 10 current and former employees who spoke to Business Insider, the agency is mostly staffed by forward-thinking people. But they said episodes like the Motel 6 and PF Chang's ones stemmed from a rigid, old-school workplace where people were required to abide by strict clock-in times, the founder hosted all-male retreats, and no parental leave was available until 2019. Some insiders said that the agency has fallen behind as the industry has begun reckoning with its lack of gender and racial equality and that its future remains uncertain under new leadership. The agency spokeswoman issued a statement saying, "The 600 people who call The Richards Group home deserve respect, and the chance to focus on positive contributions and apply their talents to work they can feel proud of. "The outpouring of support from messages and on social channels from current and former employees, clients, and industry partners is astounding. Their words and experiences are being shared proudly — not anonymously — and are powerful reminders that, while not perfect, this is a special place where a whole lot of good people have built careers, done great work, and built lifelong relationships that they value." "Our goal is to evolve, address needed improvements, and embrace a new future for our agency," she said. Some said they experienced racism while working at the agency The Richards Group has confronted accusations of cultural insensitivity before. In 2011, Summer's Eve pulled a campaign made by the agency that was criticized for playing on racial stereotypes. In 2018, the agency produced a Christmas card titled "Make the North Pole Great Again" that referenced President Trump and the idea of making "reparations" for misfit toys. A former employee said it led to contentious meetings where others had to explain to Richards why the card was inappropriate. The spokeswoman said the card was meant to be a commentary on national discourse and not a political statement. Like most ad agencies, The Richards Group's leadership remains overwhelmingly white and male. According to the Association of National Advertisers, 75% of ad industry employees were white, 9% Asian, 8% Hispanic, and 6% Black as of 2019. Some people of color said they experienced racist behavior, overt or otherwise, while working at the agency. Brandi Rand, a senior social strategist at The Richards Group from 2014 to 2016, was one of just a few Black employees during her tenure. She said her desk was placed outside Richards' glass-walled office, where guests would be sure to see her when they toured the office. "I felt tokenized. I felt like I was there to say, 'We have diversity!'" said Rand. The agency said race, gender, and sexual orientation had no influence on seating arrangements. Another Black woman who worked at the agency until 2019 said the first week she was there, the man who had recruited her saw her speaking with a colleague and asked, jokingly, if they were having a "secret Black meeting." The Richards Group has a sister agency, Lerma, a Hispanic marketing firm, housed in another building, and some people who worked there said they felt like they were second-class. They said Lerma employees weren't allowed to use the gym or eat the free food on offer in the agency's main building. One said he had never heard of an Hispanic employee going on one of Richards' all-male trips; another said that if she ever saw more than two Hispanic people in the main building, it was "a lot." Richards said he never met many of Lerma's employees but that he "can't imagine that anybody in either organization would feel like a second-class citizen when we do everything we can possibly do to make them feel important and appreciated." The agency has recently paid more attention to staff diversity. In February, it started an employee group called We@TRG devoted to diversity and inclusion. After Richards stepped down, the agency said it planned to conduct an internal audit, schedule bias training, review all client work, commit to increasing minority representation, and hire an executive focused on diversity. Some saw earlier efforts as half-hearted, though. Rand said the agency once called her to sit on a panel with The Marcus Graham Project, a Dallas-based nonprofit that exposes nonwhite college students to the ad industry. She later learned that none of the college student participants ended up getting job offers at the agency while she worked there, though. Before leaving the agency in 2016, Rand said she also reviewed four classes of interns and saw nearly everyone was white. "What is the purpose of this if, ultimately, none of them are hired?" Rand asked. "We've got to do better." Richards told Business Insider he has long promoted diversity by trying to get local Black teens interested in the ad industry by sponsoring scholarships and working with groups like The Marcus Graham Project. "It's a difficult thing to do, because our industry is not particularly diverse, and it's hard to find Black and Hispanic individuals who we can bring into the firm," he said. "[It] has not been a successful effort, but it has been going on for 30 years." Stan Richards led his company with an old-school style that included all-male trips and strict attendance rules Most employees who spoke to Business Insider said they saw Richards as a traditionalist who spoke from a place of ignorance, not malice, and that this was reflected in the agency culture. Counter to the freewheeling culture of the typical ad agency, The Richards Group was rule-bound. There were only three levels of employees: entry-level; group leads; and Richards himself, which enabled him to consolidate control. Richards considered human resources wasteful, and there is no formal HR department. The criteria for bonuses is murky to many, though the spokeswoman said they're based on performance. Two people said sharing any information about one's salary with colleagues has long been a fireable offense. The spokeswoman declined to comment. Asked about his leadership style, Richards pointed to a profit-sharing plan that puts aside 15% of each employee's salary to encourage people to stay. Richards was known for showing up at the office at 7 each morning to use the in-house gym. The agency had a strict 8:30 AM check-in time, and employees were known to ask colleagues to enter their four-digit codes for them if they were running late or take selfies in front of a clock in the elevator when they made it in on time. According to a 2011 Inc. profile, Richards wanted employees to be at their desks early before clients arrived and "dressed to impress, in case that client walked in the door." If staffers were late more than three times in one month, the company took money from their annual bonus and gave it to those with fewer latenesses. At all-staff meetings at the end of each year, Richards named those who'd been late most often as a joke. The company also took $8.63 from people's bonuses for each day they didn't bill for their time down to the quarter hour — an amount the spokeswoman said had to do with how much time it took accounting to track down delayed timesheets. She also said the lateness policy has been suspended during the pandemic. Richards regularly took select groups of employees on his private jet to go deep-sea fishing in the Gulf of Mexico or skiing near his cabin in Deer Valley, Utah. For years, these excursions were only open to men, who were often picked by Richards himself. Even when women began being included, mingling of the genders was still prohibited. Richards paid for these trips himself and limited his interactions with women outside the workplace out of respect for his since-deceased wife, Betty. (He also wouldn't ride in a car alone with a woman.) After she died, he said, he scheduled an equal number of trips for both genders. Richards said work matters were discussed on these trips and acknowledged that "there was a little bit of favoritism" shown to agency veterans. But he insisted that attendance didn't influence employees' careers, and that the only requirement for going on the trips was that they knew how to ski or fish. Some insiders said Richards had a right to use his private time and property as he wished. But one former employee said that because these were staff trips, they doubled as work functions. One employee described the trips as "Stan time, because he signs your raises." The agency presented a challenging environment for parents Some teams, like new business development, are led primarily or exclusively by women; Richards estimated that around 70% of staff are female. But employees said the agency was a tough place for working mothers. The Richards Group did not offer paid parental leave until mid-2019, and a former employee said the common line would-be parents heard was that they should leave for a job with better benefits and return when their children were older. Brandi Rand said she saved up sick and vacation days during her pregnancy to use after the birth. She said despite being promised that she would continue to lead her clients upon returning, she never regained her previous responsibilities. Soon afterward, she quit. The agency spokeswoman declined to comment. Parental leave was added after a group of women pushed for the change and leadership saw it cost more to replace the parents who were on leave, insiders said. The spokeswoman said leadership made the "long overdue" change last year because it was "the right thing to do." Some employees say The Richards Group now has an opportunity to redefine itself Richards was succeeded by creative director Glenn Dady, a 40-year vet of the agency and well regarded as a creative leader. But some current and former employees voiced disappointment that he hesitated in calling for Richards' departure. One person said he also initially defended the founder's Motel 6 comments. "People were surprised to see Glenn's empathy for Stan versus the agency and the people he had hurt — he decided to forgive Stan on behalf of 700 people," said another employee. "It's just poor instincts." According to the spokeswoman, Dady told employees the day Richards' Motel 6 comments were reported: "We need to move forward and we need to get back to the reason we are all here: to do great work." Still, some have expressed hope that the agency can remake itself by abandoning the uncompromising culture built by Richards over more than 40 years. "This is a pivotal time for accountability, transparency, and impactful change," said Brandi Rand, the former social strategist. "I am optimistic Dallas, and the industry in general, can evolve. It has to." "For a long time, [there's been] an internal surge to become a better agency — I've always viewed it as building it up from the ground up as the original fleet starts to retire," the second employee said. "We were hoping it would be a new dawn, and now here we are." Got more information about this story or another ad industry tip? Contact Patrick Coffee on Signal at (347) 563-7289, email at email@example.com or firstname.lastname@example.org, or via Twitter DM @PatrickCoffee. Contact Tanya Dua on Signal at (646) 702-2530, email at email@example.com or firstname.lastname@example.org, or Twitter DM at @tanyadua. You can also contact Business Insider securely via SecureDrop.SEE ALSO: Insiders at Dallas ad agency The Richards Group react as the founder steps down after making racist remarks Join the conversation about this story » NOW WATCH: How the suicide hotline saved my life
Hello! Here are top advertising and media articles for July 21. Lucia Moses here, filling in...Hello! Here are top advertising and media articles for July 21. Lucia Moses here, filling in for Lauren Johnson, who's on a well-earned vacation. Sign up for this daily newsletter here. In today's edition: Where media startups VCs are placing their bets, Red Bull's diversity deck, and how MAC Cosmetics is dealing as store foot traffic crashes. 19 media startups that top VCs say are poised to take off in 2020, as the pandemic reshapes the industry The shuttering of movie theaters, production studios, live sports, theme parks, and film and music festivals has cut into media companies' earnings. But investors are continuing to pour money into companies they think are poised to take off and emerge stronger as consumer habits shift. Here are 19 startups focused on areas like livestreaming, short-form video, podcasting, and esports that investors are bullish on. Read the full story here. Red Bull execs outlined plans to increase diversity efforts a month before being fired. Here's their slide deck. About a month before being fired July 13, two top Red Bull executives announced ambitious plans to increase Black representation in the company, its marketing, and community outreach. Multiple employees saw their firing as an act of retaliation by Red Bull corporate leadership in Austria. The executives' firings, along with layoffs in cultural marketing, have thrown into question the future of the diversity program. Read the full story here. MAC Cosmetics' global CMO on how it's reevaluating its stores, adapting to online shopping, and advancing diversity and inclusion MAC Cosmetics is known for its in-store experience, but the coronavirus pandemic has changed all that as people migrate to shopping online. Global CMO Ukonwa Ojo described how the Estée Lauder brand is adapting by using AR to let people try on makeup virtually and other features. She also addressed how the company continues to advertise on Facebook despite MAC's taking a stance against hate speech. Read the full interview here. More stories we're reading: Coronavirus Rewrites the Disney Playbook (Wall Street Journal) Morgan Stanley thinks Walmart's new subscription service will boost its ability to take on Amazon Prime (Business Insider) While growing an empire, Shopify manages to play nice (Modern Retail) A YouTuber with 250,000 subscribers explains how much money she makes from her videos, which is more than her salary from her day job as a teacher (Business Insider) Linkin Park's Mike Shinoda on how he used Twitch to create a new album with fan input and how musicians can make money on the livestreaming platform (Business Insider) Thanks for reading and see you tomorrow! Remember you can subscribe here. — LuciaJoin the conversation about this story » NOW WATCH: Pathologists debunk 13 coronavirus myths
The move follows last year’s shuttering of Red Bull Music Academy and Red Bull Radio. It...The move follows last year’s shuttering of Red Bull Music Academy and Red Bull Radio. It also comes after weeks of tensions within the energy drink company over Black Lives Matter.