BP’s brand plunges from Deepwater to Ground Zero

I’m beginning to feel sorry for Andrew Gowers. Having had an exemplary career at the Financial Times, he had the misfortune to become its editor.

Stuart Smith
Stuart Smith

In the wake of a complex and expensive libel case, he was ’let go’ by senior management in 2005. With contacts like his, though, a glittering future in PR beckoned.

And so it proved, when he became head of communications at the London office of bluechip investment bank Lehman Brothers. How was he to know that, within two years, he would be at the epicentre of the global financial meltdown?

Never mind, pick yourself up, dust yourself down and move on to… BP. Weeks later, the Gulf of Mexico explodes into uncontrollable life.

Avoiding reference to Jonah, I’ll confine myself to the observation that, for a man with Gowers’ peerless experience of crisis management, he seems to have been pretty slow on the uptake. Yes, he’s been indefatigable on the airwaves; mainly pointing out it’s not all BP’s fault. Which it isn’t: try the Swiss-based company that leased the rig to BP, and the US maintenance outfit that passed the defective shut-down valve as fit for purpose.

Also, BP has only a two-thirds stake in the well. But no one wants to hear this; certainly not President Obama and the American people.

But what Gowers and his colleagues conspicuously failed to do was mobilise their chief executive fast enough. The oil rig explosion took place on 20 April. BP may not have known the leak’s rate of flow, but it did know this was a very serious industrial accident. Yet it was not until three days later that the firm released its first statement from group CEO Tony Hayward and, as far as I can tell, not until 3 May that Hayward made a broadcast public statement.

Did it really take that long to determine this oil spill is quite possibly the worst-ever man-made ecological disaster?Not in the minds of journalists, who, like nature, abhor a vacuum and fill it with speculation. And not ­ crucially for crisis management specialists these days ­ in the social media space, where any half-decent speculative theory gets magnified a gigafold. Does Gowers or BP fully understand this? I suspect not. Until very recently, if you had looked up “BP Oil” on Google, you would have found hundreds of references to the incident ­ on blogs, Twitter, YouTube and the rest, but almost none seeded by BP. Does BP imagine its investors take no notice of all this? Some £19bn knocked off the share price suggests otherwise; they¹ll get their information wherever they can.

Credit where credit is due, Hayward is now cleverly framing the disaster as a common threat, with BP in the front line of resistance. His language has an appealing Churchillian ring to it. But the initiative may already be lost.

Of course, from a corporate standpoint, BP’s caution is understandable. Make light of the disaster while it is still unfolding and it projects an uncaring image that will do endless damage to the brand later. Rash admissions, on the other hand, will expose it to years of litigation, with its toll on management focus and corporate profits. No one knows this better than Hayward, who has spent three years cleaning up BP’s reputation and settling claims after the March 2005 explosion at its Texas City refinery killed 15 workers and injured about 170. Corporate negligence ill fits the image of a firm that has strived to position itself as environmentally friendly with a cuddly logo and a $4bn “Beyond Petroleum” alternative energy initiative.

And yet, all that misses the point. The speed of mass communications these days no longer permits ­ if ever it did ­ boardrooms to dictate the pace of events. Another fine example of crisis mismanagement, on a much smaller scale, reinforces the point. Johnson & Johnson is rightly seen as a model in consumer marketing circles for the way it dealt with the 1982 Tylenol scare, in which seven people died after painkiller capsules were laced with cyanide. But it has now come a cropper, after the US Food and Drug Administration warned that some of its proprietary, over-the-counter medicines for children (including Tylenol) had too much active ingredient in them, and thus failed to reach the acceptable public safety benchmark.

Although there is no evidence of anyone being harmed, and J&J acted promptly and efficiently in organising a voluntary recall, it failed to adequately explain itself to anxious parents, who have become increasingly restive. They quickly turned to Twitter, Facebook and various parenting blogs to express their frustration at not being able to get a straight answer out of the company about what was going on. This is only the latest of a number of poorly explained recalls, which could have catastrophic knock-on effects for the firm’s reputation. As one parent, quoted in The New York Times, put it: “Another recall for baby Tylenol. Well no more baby Tylenol, back to generic brand.”

Although J&J can scarcely blame the forces of nature for its self-inflicted disaster, there are, nevertheless, parallels with the BP situation. In both cases, the companies seem obsessed with procedures and asserting internal control, which conveys the unfortunate impression that cover-up, rather than communication, is the ultimate agenda.

As I commented in my blog on the Maclaren baby pushchair crisis last autumn (10 November, 2009), a bunker mentality is the default company reaction in these situations, and it¹s disastrous. True, some crises are worse than they seem; acting upon them could aggravate their severity, whereas left alone they may quietly subside. But can you afford to take that risk? Suppose this is the big one, the corporate reputation-wrecker?

Whatever you do, don’t hide behind PR flunkies and hope it will go away. Get the chief executive out there early, personally engaging with the media.

Maclaren didn’t do that, with disastrous results for sales in its main market, the US. BP and Toyota eventually did, but I bet they wish they had wheeled them out earlier.

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