Friday, April 30, 2010

How Is BP Doing?

Even though some critics are panning BP officials for seemingly down-playing the severity of the Gulf oil leak in the early hours after the April 20 explosion and fire, I think they got off to a slow but appropriate start.

I may regret writing this, since everything can change in a single news cycle, but on Friday, April 30, 2010, they seem to be responding relatively well.

With 20-years experience in crisis communication, I am inclined to give leadership of a company in crisis the benefit of the doubt in the first few hours after a major disaster. Facts are scarce and with the loss of eleven lives and scores more workers waiting to be rescued, answers are never as readily available as the media and public demand.

One of the first important communication challenges is to respond quickly, never speculate, and make it as clear as possible you don’t have instant answers, no matter how much you wish you did. It was some hours after the initial explosion before company CEO Tony Hayward expressed his and his company’s “concern” for the “rig personnel and their families.” That probably couldn’t have happened much sooner.

Once company leadership learned the leak was five times what they had earlier reported, they said so, and then CEO Hayward said he would welcome help from anyone.

The Associated Press reported that environmentalists are giving BP credit for responding much better than Exxon did in 1989

Use of the BP website and the Joint Information Center website has been relatively good. Responding to local officials in communities in the path of the ever-widening spill, BP began opening offices in each of those communities, manned by company employees, to provide more timely information and support to the locals. That was a good decision.

The New York Times quoted Hayward saying, “Reputationally, and in every other way, we will be judged by the quality, intensity, speed and efficacy of our response.”

There are basics that work in most crises. Respond as quickly as possible. Don’t speculate. Be as honest as possible. Start by expressing sympathy for the dead and injured and their families.

Have a plan to respond to the operational issues, another plan to deal with internal and external communications, and be ready with a plan to get back to normal operations as soon as possible.

At the Institute for Crisis Management we maintain that you should anticipate what possibly can go wrong and develop a plan to manage it – then multiply how bad you THINK it might be, and plan for the even more serious situation. It appears BP had plans and processes in place, but they were limited to a lesser disaster than they are really facing.

Don’t point fingers and lay blame. Take responsibility. Do what is right. Anticipate, each day, the questions your employees, your customers, your partners, environmentalists, regulators and the public will have, and prepare to answer the questions you can answer and explain why not, if you can’t. “We don’t know” is a reasonable answer, “We don’t know, yet, but when we do we’ll share that with you, if we can,” is a better answer.

Wednesday, April 28, 2010

Did Goldman Sachs Win or Lose?

It is a safe bet that the cards are stacked against any company summoned to appear before a U.S. Congressional Committee.

Each member of the Committee has a half-dozen, or more, staffers researching and writing opening and closing statements intended to stir up constituents, and preparing questions that make their Senate boss look tough on whatever the issue is before the Committee.

All the company executives can do, with their legions of support staff, including lawyers and PR people, is anticipate the questions and figure out which ones they can properly answer and how to avoid the rest.

If you were expecting understandable explanations from Goldman executives in Tuesday's hearings, you are either naive or an eternal optimist. If you were expecting civil discourse from grandstanding Senators, ditto.

One of the bright moments in the hearing followed numerous charges that Goldman was running a casino operation stacked against their clients. Senator John Ensign, a Republican from Nevada, spoke up to defend his home state and its primary industry -- gambling. He said people who go to Las Vegas know the odds are against them, but, "on Wall Street, they manipulate the odds while you're playing the game."

Some of the Senators turned viewers and constituents off when they repeatedly quoted from a vulgar and profanity laced e-mail.

Goldman executives didn't score many if any favorable points, but they didn't do or say anything new or reveal a "smoking gun" either.

I agree with market analyst Edward Yardeni, there was nothing to create a more damaging perception than already existed, and the Senate VS Goldman PR battle was fought to a draw.

It is hard to feel sorry for many of the so-called "clients" that lost money in deals with Goldman. Most of the clients that invested millions of dollars in risky deals with Goldman were gambling they would get lucky and Goldman would be unlucky.

Wednesday, April 21, 2010

The Pope Apologized, Sort Of

Finally, the Pope and other representatives of the Catholic Church have apologized, sort of.

Washington Post and syndicated columnist E. J. Dionne and senior fellow at the Brookings Institute, himself a devout Catholic, said today on National Public Radio his own pastor recently talked about the scandal, individual culpability and institutional church culpability.

In his Easter sermon, Dionne conceded, his priest became defensive though, when he added, enemies of the church were stirring this up.

In the past year, or so, some of our competitors have been complaining that organizations in crisis are wasting their time in apologizing.

I would suggest an apology is not the be-all, end-all solution to an organizational crisis, but “taking responsibility” when something goes wrong, explaining what you’re going to do to fix it, and then fixing it, is almost always the most sure-fire way to recovery.

An apology is only as good as the sincerity of the person speaking and the context in which it is delivered.

In recent days, the Pope is reported to have said, “Now, under attack from the world which talks to us of our sins, we can see that being able to do penance is a grace and we see how necessary it is to do penance and thus recognize what is wrong in our lives.”

Asked about the Pope’s “apology,” Dionne, the newspaper writer, said, “I suppose if I had been an editor, I would have asked him, 'can you drop the first half?' Because, I think . . . attacking the world first for bringing this to the church’s attention undercuts the contrition in the second half.”

I agree. How many times have you heard a CEO or a politician stand in front of the cameras and say, “…if I offended you, I apologize.” What I hear is, “I’m not sorry for what I or my company did when we knowingly sold you contaminated (fill in the blank), but I am sorry if it offended you!”

Whether it’s the Catholic Church or a corporate client, I’m not so concerned about the “critics,” but I urge them to hear and respond appropriately to their members, employees and customers.

Monday, April 12, 2010

Pandemic Good News - Bad News

A year ago this month, the H1N1 Swine Flu pandemic swept across Mexico the U.S. and eventually most of the rest of the globe. So far 17,770 people in 213 countries have died and millions sickened. The average age of those who died is 37, compared to an average age of 75 for those who die annually as a result of the seasonal flu.

That’s the bad news!

The good news is ONLY 17,770 people have died so far, compared to 50-million worldwide during the 1918 pandemic, including half-a-million Americans that died in the last four months of 1918 and 70,000 dead as a result of the Asian Flu pandemic in 1957 and 34,000 Americans who died from the Hong Kong Flu in 1968.

Now a small group of scientists and political critics are attacking the World Health Organization (WHO) charging the agency with creating panic and causing governments to stockpile vaccines which were not needed.

The WHO, Monday, said it did not handle the pandemic properly and failed to communicate “uncertainties” about the H1N1 virus and how lethal it might, or might not be.

Keiji Fukuda, the WHO's top influenza expert said people “around the world have very high expectations for immediate information. In many ways it is unforgiving out there.”

He’s partly correct. However, it’s not the “people” that want instant answers to every question, it is the media. It doesn’t matter if it’s a pandemic, a mine explosion, a plane crash or any other sudden tragedy, reporters insist on knowing what happened, why and who is responsible, NOW! Most of those answers take time to determine.

And a pandemic is so rare, only one every 30 or 40 years, and they are not predictable and there are so many factors that influence how mild or severe they may be.

Five years ago, here at the Institute for Crisis Management, we began urging our clients and potential clients to plan for a pandemic. I spoke to all kinds of business and professional organizations from Nova Scotia to Sao Paulo, Brazil and from sea to shining sea, stressing the importance of developing a pandemic business crisis plan.

But then, we always encourage organizations of all kinds, to create and maintain crisis operations, communications and business recovery plans.

We still do, and the organizations that have plans are much less likely to experience business ending events, because part of the preparation process is looking for ways to prevent crises and then how to minimize the damage if you cannot avert the disruption.

Those businesses and other organizations that developed pandemic plans are now better prepared to deal with a number of other crisis types, including nuclear and bio-hazard attacks or accidents upwind from their sites or terrorist attacks in or near their locations.

The world has experienced pandemics since at least 1500 and the next one could strike at any time or not for another 30 years. I still believe it’s better to be prepared and nothing happen, than to not be prepared and experience a business-ending event.

Thursday, April 8, 2010

No Good Deed Goes Unpunished

In January, Toyota’s senior U.S. public relations executive tried to warn the company’s leadership to go public and take responsibility for the faulty accelerators on some of its cars.

Five days after Irv Miller hit send on his memo, about the time it would take to mount a recall strategy, Toyota announced the recall of 2.3 million vehicles in the U.S. Now, his memo may be the straw that broke the company’s legal back.

Earlier this week, days before this memo was leaked to the Detroit Free Press newspaper, Federal safety officials fined Toyota $16.4-million, making it the largest U.S. vehicle defect fine so far.

By the way Miller has since “retired” from Toyota.

The memo will most likely be used as a hammer against the company by plaintiff’s attorneys who have filed several class action lawsuits against Toyota, and will be more evidence for U.S. safety administrators to use against Toyota in additional enforcement actions. A spokesman for the National Highway Traffic Safety Administration (NHTSA) says Toyota was aware of the sticky gas pedals last September and alerted dealers in Europe and Canada four months before telling U. S. safety officials and customers.

Miller wrote in his memo, “We are not protecting our customers by keeping this quiet. The time to hide on this one is over.” PR folks often function as the conscious of an organization and it takes wisdom, experience and the respect of peers and management to be effective at it. It’s a shame the company did not get that message months earlier and act on it.


There’s another lesson in Irv Miller’s memo. He should have made his appeal in person or on the phone or in a video conference, but NOT in a written memo – on paper or e-mail. All written and digital documents are discoverable in subsequent legal actions and Miller’s memo, no matter how well intentioned, may cost the company a great deal.

Monday, April 5, 2010

It's About Time, Tiger!

Where was today's Tiger Woods last February?

Tiger Woods met the press -- albeit the golfing press -- minus the tabloid reporters -- and acquitted himself well.

Mind you, he didn't answer all the questions that were posed, but the questions he did answer were more "natural" and heart-felt than the formal, stilted statements he made earlier and in the two 5-minute stand-up interviews of a few weeks ago.

He appeared more relaxed and less anxious and the questions he didn't want to answer he talked around or just ignored. But he didn't seem rude and only slight evasive.

I have said from the outset he did not need to elaborate on the details of his misdeeds. And, if he had been as forthcoming months ago, as he was today, some of the heat might already have begun to dissipate.

Golf fans seem ready to accept him back. Critics will still be critics. The tabloids will continue to dredge for dirt.

The only things still uncertain: will he save his marriage, will sponsors come back and can he win another tournament.

You know which of those unanswered questions should be most important.