Posts Tagged ‘BP’
Being Reputation Management Consultants, Reputation Management For.com, have come with our list of top 10 reputation crashes in the year that was! Being the festive season and all, we’re doing it as honors awarded to the great captains of Industries, firms, celebrities and brands that went through a reputation storm in 2010… Read the rest of this entry »
The Turner Prize is the most publicised art award available in the United Kingdom, and has been since its introduction in 1984. Available to visual artists under the age of 50, the current prize pool (sponsored by BP) consists of £40,000 with a top scoop of £25,000 for the winner. The exhibition, hosted at Tate Britain in London (formerly the Tate Gallery, founded 1897), is prone to some controversial attention, and is victim to regular protests. In an attempt to avoid any negative publicity this year, Turner Prize bosses took some rather unusual measures…
If you happened to be passing casually by the Tate earlier today and wondering why there were a lot of angry photographers outside the gallery, it’ll be because they were out staging a boycott. Turns out, due to being tired of all the bad press and negative attention they’ve been getting over recent years, organisers decided to show themselves up and deny entry to journalists and photographers until they’d signed a form to say that they’d only report nice things about the exhibits. No joke. Gallery officials and the press went into a stand-off which lasted two hours as representatives from the media refused to promise copywrite, delaying the opening of the exhibition.
It’s no wonder the competition tends to attract negative attention, and critics are keen to bring up some of the more controversial winners of previous Turner Prize winners’ entries. There was the classic entry that was “A Dead Sheep” (not a sculpture or a model, literally a dead sheep), and then there was “A Bed”, which was allegedly art as the artist submitting it had actually slept in it. An argument for leaving one’s own bed unmade during the day, perhaps, on account of its increased value. It’s said that the show’s organisers are “prickly about the Turner Prize because they are mocked about it year after year” – according to critic Brian Sewell.
BP is making some serious PR changes quite like how political parties field local guys for elections Robert Dudley comes in waving the American flag. We hear about him talking of his times fishing and swimming in Mississippi growing up. While outgoing CEO Tony Hayward has termed the oil spill crisis like “stepping out from the pavement and being hit by a bus”. He seems to be stepping down to appease the masses.
BP will have its first non-British CEO and this is sending a message to the US that they have someone who will think about their side of the story – someone who has a genuine interest in cleaning up the mess and someone who has admitted to facing colossal issues to tide over the problem. Bob Dudley sure seems like the man we need.
BP also needs to understand the horror people feel knowing that stringent security measures could have averted this enormous problem. Well there is also the politics of further deep sea drilling to considered and the oil lobby’s sheer power on the other side. BP has made quite a few PR duds to its credit, like publishing full page glossy advertisements, censoring press and sponsoring events during the crisis. Hardly the right time to seem looking for PR and not to mention the neat retirement amount and pension fund that Tony Hayward is set to take away.
Whoever made a lot of the decisions that BP made needs to go and that is where the new CEO steps in. And this is what Dudley said..
“We will fulfill the promises we’ve made”
“Meeting our commitments is critical for BP’s long-term success. Taking over this role, I will not reduce my commitment in the region.”
“It’s not our intention to exit the U.S. nor do we believe we will have to. We fully intend to maintain those businesses and restore our position in the Gulf.”
Reputation damage does not come much bigger than BP’s fall from grace estimated at £25 billion on the stockmarket. This is the balance of the forty billion drop minus the fifteen billion costs of clear up in the USA.
Few companies spend much time managing reputation in a strategic way. we are aware of none that actually sit down and talk about reputation at the level of the CEO or strategy director until the damage has been done. This year Goldman Sachs acknowledged that criticism of it’s behaviour over the past couple of years has done great repetitional damage.
The Gulf of Mexico spill is perhaps a one off but all companies face potential reputational damage in much more modest ways which few consider. Companies via their PR companies fetishise crisis management (first aid) at the expense of crisis avoidance or reputation management (health protection). They look to respond at the expense of avoiding in the first place. This approach puts reputation management in the hands of marketing directors and not strategy directors; marketing directors who typically worship brand management and advertising: they love to take and not listen.
In the case of BP how much listening did they do to internal voices questioning safety and operational processes? Large organisations rarely welcome dissonant voices however much claim to be inclusive. All large companies need to nurture whistle blowing and the eccentric voice. Maverick is a key reputation management asset!
Exogenous events do happen, but they are rare. The more we hear about the events and circumstances of the oil spill, the more it is becoming clear that safety was an insufficient priority and that the dangers and impact of a blow-out had been minimised. As the cliche goes… This was an accident waiting to happen.
The past few years have demonstrated that the single largest risk shareholders face is the backlash from reputation damage. Company executives need to recognize the fact.
BP’s decision to stream video live from the sea floor to show how they are managing the oil spill in the Gulf of Mexico may have seemed a good idea at the time: evidence that the company is technically committed to capping their spill. If all had gone well with the capping of the well, the video streaming might have been a PR coup. Instead the video has operated almost like a trojan horse undermining all their PR campaigns.
Problem 1: you only need to look at the oil “gushing” out to know that you are watching more than 5000 gallons a day entering the ocean. Combined with BP’s earlier refusal to allow researchers near the well, this live evidence has provided America with reality TV show from the ocean floor. The fact that the gusher is brown and therefore mud rather than oil does not change perception that BP has failed. The visual perception of failure allied with the increasingly rabid and hysterical utterances from the White House is stoking the embers of a PR conflagration. For President Obama, approval ratings plummeting, this is all about allocating blame to BP and keeping it as far away from the White House as possible.
Not all Americans are responding in the same way. There is within the USA, an increasing sense that this disaster is a logical outcome of a situation where the country has an increasingly desperate need for oil leading to more and more marginal drilling. This constituency does not necessarily hold BP to blame, but realises that all oil companies are behaving the same way. The cost of oil is enviromental disaster.
For BP (“Beyond Petroleum) the spill is increasingly uncontained, to the extent that analysts are talking of break up and takeover. In this torrid arena, CEO Hayward looks increasingly out of his depth, not helped by the disastrously absent chairman. At first BP seemed too relaxed about the spill, now they are looking incompetent. Their failure to marshall the facts of the argument and the failure of USA CEO to be able to clarify the events before the explosion made BP look incompetent. BP also failed to understand the full political context of their spill and the likely response from Obama.
As mud, oil and gas gush from the well, perhaps it has been failure in a smaller way. Why have BP not taken the opportunity to shape the news agenda by providing some interpretation of the live cam. Some text explanation of what viewers are seeing would have been technically simple and ensured that they debate could be swayed their way. Typically, BP have failed to set the agenda.
BP’s nightmare in the Gulf of Mexico gets worse, but this time it looks like an own goal. To date they have handled themselves with some aplomb despite the naked politicking by a White House desperate to shed any blame for the spill and ensure that absolutely none of it sticks to the administration. That has resulted in constant references to BP’s culpability, that BP will pay the costs and that effectively none of it has anything to do with the USA. In the face of such adversity, BP have handled themselves with some dignity. The decision to employ local fishermen should have been PR coup but the simultaneous decision to ask them to sign a waiver looks misconceived and big brotherish.
Lawyers for fisherman complained over four specific articles:
- BP, which is mandated to take 100 percent responsibility for the oil clean-up, is demanding that the volunteers INDEMNIFY IT for any accidents that might occur from the volunteers’ efforts (Art. 13(F));
- BP demands that the volunteers WAIVE their First Amendment constitutional free speech rights about the volunteer’s participation in the clean-up efforts of the disaster; for example, if a commercial fisherman signed this agreement he or she could not then speak to anyone about the disaster or clean-up efforts until BP first “approves” of what the volunteer wants to say (Art. 22);
- BP demands a FREE-RIDE on the volunteers’ insurance policies so that if there is damage to a volunteer’s vessel or other injuries, such as to a crew member, BP will be an “additional insured” and the financial responsibility for the damage will rest on the volunteer’s insurance carrier, NOT BP; quite obviously, the volunteers paid good money for this insurance and BP should not be allowed after-the-fact to worm their way into that contract so that it can attempt to avoid further legal responsibility for the very volunteers it is asking for aid and assistance; (Art. 13(A)); and
- BP demands 30 days of notice before any volunteer is allowed to pursue legal claims against BP, and there are no exceptions made for emergencies (Art. 13(I) [sic (G])
Now Federal Court has thrown out the articles and BP have backed down from making the fishermen sign the waiver. The impact of this has been to infuriate the a key constituency for BP.
After managing the fishing communities well, it now looks like BP is beginning to lose its touch as the corporation reverts to type: ie clam up. Watch how one company Rep handled this community on Fox. http://www.businessinsider.com/watch-gulf-coast-fisherman-flip-out-at-bp-town-hall-over-oil-spill-2010-5
It is often the small things that matter. It looks as though the BP waiver was relatively standard: in other words, it had not been designed for this situation, but it is how it looks that matters. The waiver gives the impression that BP was trying to silence fishermen and avoid paying compensation. The waiver does not do that, but already heated forums are accusing BP (now increasingly referred to as British Petroleum) of trying to destroy fishermen’s lives.
BP needs to tread carefully in the next few weeks as patience and frustration take their toll. Most especially they will need to consider how they interact with the local coastal communities who, to date, have been the most sympathetic of all stakeholders towards “big oil”.