“Division I athletics are probably the best marketing tool we have in terms of getting the Rutgers’ name out there,” he said. “If they don’t know the name and they haven’t seen the brand, they’re not going to even look at you.” — Robert L. Barchi, Rutgers president, September 4, 2012 in Star-Ledger interview.

A story in The New York Times today about Rutgers is a great example of how a crisis in one part of your organization can result in the media covering (or uncovering) bigger problems inside your administration. And that unplanned media attention can severely harm the entire reputation of an institution. I’ve always advised my clients to beware the smoldering fire, that slow-brewing crisis that suddenly envelops your administration (or your business) and brings greater harm to your institutional reputation.

I’ll now call this the Crisis Domino Effect or CDE.  The CDE is akin to that stuffy nose that leads to a cold that leads to a flu that won’t go away for weeks or months. And just like you try to throw everything at the cold (vitamins, OJ, medicines), you may try multiple tactics to rid your campus or business of the unwelcome media barrage – plus the social media inferno that either follows traditional media or motivates reporters to write stories.

You may “decline comment” or even curse at a reporter or editor for writing that story. You may try to put out a wishy washy statement that gets you in even MORE hot water with your critical audiences. Or, you may sincerely try to get the messaging just right, but you fail to convey or attach any human emotion to the spiraling crisis.

Let’s face it. If I’m a parent who a month ago was thinking about sending my child to Rutgers, it’s likely I’m going to revisit that decision in light of the gross mishandling of the belated firing of Mike Rice, the former men’s basketball coach. (As one of my guests on The Crisis Show pointed out this week, if that was his kid getting abused by a coach, he’d be driving to the school to confront that coach personally.)

It’s safe to assume that same parent considering sending their child to Rutgers has heard about the coaching fiasco. Combine that with today’s article –which focuses on numerous other criticisms of President Robert L. Barchi — and good chance I’m crossing Rutgers off the list. That’s why Barchi and Rutgers now have a full blown crisis and are scrambling to stop the bleeding. And as long as Tim Pernetti, the embattled athletic director remains, the loss of reputation won’t stop soon.

The Rutgers lesson is one I’ve seen so many times. A company, campus or other organization thinks it has an isolated HR problem, when in fact it’s much bigger than that. And, as Rutgers is experiencing, by “investigating” instead of “terminating” Rice last year, it now has a much more costly crisis in terms of litigation as well as lost revenue from those parents of prospective students who have now crossed Rutgers off their lists.

It’s also important to note that while this (thankfully) is not as serious as the Sandusky-Paterno-Penn State scandal, the story is similar in that horrible behavior emanating from the athletics department was ignored by college officials for years. Penn State has paid $208,000 per month to a big public relations firm since April 2012 for an engagement that was scheduled to end this month.

When you add up the costs of litigation, lost revenue and the cost to rebuild reputation, it’s clear that eliminating HR problems with decisive, early actions save reputations later –and monies can be spent more intelligently where all students benefit most. What do you think? Please comment below.