So BP is on trial and the news headlines are filled with stories about former BP executives testifying about the company’s putting “profits above people.” This situation highlights the often-discussed conflict between the court of law and the court of public opinion. And the often-discussed conflict between lawyers and PR folks.
The CEO and leadership of the company must make the decision when these two forces collide. Clearly Bob Dudley and the BP board have decided that winning in the court of law is more important than winning in the court of public opinion. Let’s look at this decision because as a PR person, like I suspect most PR people, my inclination is to think: how stupid can they be? Why encourage all the old outrage and hatred against their company to resurface? After spending an unbelievable amount of money to convince everyone they are doing it right in restoring the gulf after the spill, why waste the goodwill that that money was intended to generate by allowing this trial to scratch the scab off all the old wounds?
But, things are not so simple. And as we PR folks often accuse the lawyers of only looking at it from the legal perspective, we can be accused of only looking at it from the reputation perspective. According to one estimate, there is at least $17 billion at stake in this trial. 17 billion–that’s enough to pay the federal deficit for–wait, we won’t go there. 17 billion is a lot of money for even a company the size of BP. A CEO has to take numerous factors into consideration, including share value, responsibility to shareholders, and the long term future of the company. A major point of this trial is assigning blame, so there is also the consideration that when all is said and done, blame will be shared (as it has so far in the court of law far more than in the court of public opinion) between Transocean, Halliburton and others. So there is reasonable hope that a positive outcome in the trial will not only save billions, but help the public understand this was a complex event with multiple causes and multiple points of failure.
I think there is another reason why its more rational to proceed with this trial than first glance suggests: ExxonMobil. The shadow of the ExxonValdez lingers, but has been much diminished by the BP spill. You may recall that Exxon’s CEO took great heat for not showing up at the spill. BP CEO Tony Hayward, intent on not making that mistake, made the mistake of showing up too much until he was caught in an unfortunate comment. Funny thing–that comment is now tied to his name so the headlines read: Tony”I want my life back” Hayward. This is so ridiculous. But after the Exxon headlines died down then CEO Lee Raymond took a very strong anti-reputation position. It’s well known in the industry that his view was “people may hate us but they are going to keep buying our product.” So he set about continuing to build a company that would be the envy of everyone else in terms of efficiency, effectiveness and share value. He did. ExxonMobil recently regained its position, which it lost relatively briefly to Apple, as the world’s most valuable company. While many who buy its products may still have a lingering distaste over the ExxonValdez, the shareholders may be happy that the company didn’t waste too many dollars and too much effort on convincing everyone what a nice company they are.
The upshot: sometimes do we PR types make too much out of reputation? Oh my goodness, I feel like a heretic just asking that question. But, Jim Lukashevski (I’m using phonetic pronunciation rather than actual spelling which I can never get right) has made a career out of teaching PR folks to gain a seat at the table of organization leadership. One of the best ways they can do that is demonstrate they can think like a CEO and not just have a knee-jerk PR reaction to everything.
The BP trial is right now a PR disaster. That doesn’t mean Dudley and the others were wrong to refuse to settle. Time will tell.