All posts by gbaron

See you at PRSA? Speaking on Reputation Resilience

If you happen to be going to the PRSA International Conference in Washington DC this coming weekend, I’d like to cordially invite you to my presentation on Sunday afternoon. I’ll be speaking on Reputation Resilience–why some companies are destroyed by crises and why others come through just fine or even in better shape than before. This topic was submitted and accepted prior to the gulf spill which started on April 20, but having been involved in the communications of that event I’ll be discussing BP from a reputation resilience standpoint as well.

Also, during the exhibit hours I’ll be hanging out around the PIER booth so please do stop by and say hi.

Replying to William’s question–Goodwill and Reputation Management

Frequent Crisisblogger commenter William Cummings (vacation lane blog) asked about the relationship between the accounting of “Goodwill” and “reputation management.” I started to answer but decided to make it a post. Here’s to you William:

Not  being anything resembling an accountant my understanding that “Goodwill” is sometimes shown as an asset on a financial statement as a way of capturing the intangible but very real value related to the company’s image, brand value and/or reputation. The reality is that a business is or should be made up of much more than its physical assets. In fact, I argued in a much earlier book, that the real value of a business ought to be measured by its relationships–the number, quality, and potential revenue and profits they and those they connect with represent. There are a number of companies today that measure “brand value” by looking at these things and making some financial determination of what the company is worth based on its position in the market.

Reputation management can be seen as those things that management does to protect and enhance its brand value. Company executives do lots of things to protect and enhance their revenues and profits and these are traditionally seen as the primary and appropriate focus of management. But brand value goes beyond sales, costs and margin. While you may be able to increase net margin by sourcing a better supplier, or increase sales by a more effective marketing strategy, enhancing and protecting brand value is a little more complex.

Interbrand does a good job of analyzing brand value. But one of the most useful stories and analysis I’ve seen of this is from 24/7 Wallstreet where they present the 15 most hated companies in America.

One thing that will become clear from looking at these ways of measuring brand value is that it does not equate sales and profitability. In fact, it is quite possible to be ungodly successful in sales and profits and have a really bad public reputation. The two often go together as I’ve commented here several times–look at what happened to Microsoft when they became totally dominant in the software business. They had a terrible time until Google showed up and started competing–now Google faces some of the same problems because of their dominance in their sphere. When Toyota approached and then passed GM as the biggest carmaker in the world I warned (in 2007) that they should watch out because they were susceptible to reputation attacks based on their leading role. Success can really hurt.

William, I’ve gone far beyond your question–but reputation management obviously is a big deal. As the article that prompted your question points out, it is now CEO’s biggest concern. Ultimately, however, the solution is simple. Be trustworthy yourself, and make certain every day that your organization does all it can to earn trust from those people on whom you depend for your future.

Where is the media (and political) mea culpa when the truth comes out?

The headlines about the federal commission looking into the oil spill are about the failures of the Obama administration. But, I want to know where are the apologies from the media and Rep. Markey?

If you ask the person on the street what BP did wrong, one of the top items on the list would be “they vastly underestimated the amount of the spill.” I pointed out repeatedly that, wait, BP is operating under Unified Command authority and Unified Command has responsibility for reporting all response information including spill volume. I checked numerous media reports and everyone blamed BP–using it as evidence that BP was lying, cheating, no-good, profit-mongering and all that. Only one had it right: factcheck.org.

The oil spill commission report clearly identifies the federal government as responsible for the initial spill volume. Certainly, they got the information from BP. And certainly there was pressure from the media to provide the best information they had. And they did. I find no fault with either BP or Unified Command in providing it–although clearly they should have couched it in much stronger terms about a very initial estimate which could be much higher. I do find fault with the media, pundits and social media commenters who used this inaccurate estimate as a means of trashing BP.

Here’s what the esteemed representative from Massachusetts said:

“It is clear that, from the beginning, BP has not been straightforward with the government or the American people about the true size of this spill. Now the families living and working in the Gulf are suffering from their incompetence,” he added.

I’d like to ask Rep. Markey and all those who joined his chorus how they would estimate spill volume in those early days. I’d also like to ask if they think, given the oil commission report, if they think they might owe BP an apology.

I’d also like to ask that of all the reporters, editors, broadcasters and bloggers who were so eager to jump on this error as evidence of BP’s incompetence and evil character. Why are they not jumping up now to say, we screwed up?

The Commission report does make a very important point about the mistaken volume amount: “the loss of public trust during a disaster is not an incidental public relations problem. The absence of trust fuels public fears, and those fears in turn can cause major harm…”

That’s a statement that should be tattooed on every response leader’s forehead–or at least memorized.

What keeps CEO’s up at night? Reputation risk.

Great article by Wall Street Journal on reputation risk and how CEO’s fret about it. Also completely agree with the analysis by the experts quoted in this article. It’s timely as I am in the middle of preparing my presentation for the PRSA International Conference on Reputation Resilience.

I very much like this quotation by Judy Larkin:

Ms. Larkin says that both BP and Toyota were slow off the mark to communicate what they were going to do to fix their problems. “When there’s a delay, the information gap gets filled by speculation or allegations by others outside the organization,” she says.

However, I think it is quite dangerous for CEOs, crisis managers and reporters alike to think that BP’s image problems were primarily PR issues. They could have been lightning fast (in fact, they were quite fast beginning communication  shortly after it occurred) and they could have said everything right (in fact, they did say almost everything right despite what the media covered). It would not have and did not matter. Because they were spilling oil for three months into the Gulf of Mexico–in full sight of the world. There are some problems PR can’t fix and this is one of them. They tried over and over to kill the well. Not until July 15 did they succeed. If the CEO had said to his PR chief, “send out some press releases to get us out of the reputation mess,” the only reasonable response would be “stop the spill and then maybe we can begin to climb out of this mess.”

I think it is important for crisis communicators and public relations leaders to remind their leadership team that a key lesson from the Gulf Spill is that if you mess things up pretty bad, PR can’t save you. Smart CEO’s know that, of course. We all know we live in a world in which bad things can happen, even to good people doing their darndest to make the right decisions. That’s what really keeps CEOs up at night.

What if BP asked my advice?

I’m sure most crisis communicators have asked themselves that question in the last while. What if the new CEO of BP, Robert Dudley, called you into his office and said, OK champ, what do we do now? What would you say?

They haven’t, but it doesn’t stop me from speculating as to what advice I would give. So here goes:

1) You’re on the right track.

You made some impressive moves with the replacement of key executives and the formation of a new unit to focus on safety. That suggests you are serious about addressing the realities of a culture issue (whatever those may be) and the public and media perceptions. Now you  need to follow that up with clear, consistent reporting on what changes are being implemented as a result of these steps.

2) Recognize your credibility is severely damaged.

While the move from Mr. Hayward to yourself was necessary and has been pretty positively received, do not deceive yourself into thinking that what you say is golden. You still have a BP logo on your business card and that nice little solar flower image is definitely not golden. You need a credible voice to speak to you and for you–one the nation trusts and that will surprise the media. They should not be a spokesperson for BP but instead a spokesperson for the public into BP, an ombudsman. But from that vantage point they can report on what BP is doing to fix the company, their image, their culture and the mess in the Gulf. Colin Powell comes to mind, of course Thad Allen would be outstanding but not sure how that would work. But, you get the picture. James Carville? Not so much.

3) You are a leader–don’t be afraid to lead.

Despite what many people may think of you and the lack of trust they express, the reality is that no one in the world has the knowledge and expertise that your organization has in dealing with deepwater well failures. You have already been generous in funding lots of studies. Now don’t be afraid to step to the front and help the rest of the industry, the nation and the world deal with the very real issues of deepwater drilling. Until the world loses its taste for hydrocarbons, we need that dinosaur rot and you know better than any how to get it and what can go wrong.

4) Become a champion for Unified Command and the National Incident Management System.

Because you were in the forefront of this thing, you know better than almost anyone what went right and what went wrong in the event. As Admiral Allen has pointed out, one of the biggest problems from a perception standpoint was the difficulty of the public (mostly the media) to understand how the party who caused or at least is responsible for the spill could also be a key part of stopping it and recovering. Some have suggested that the government should have all the technology and expertise your team has. It’s ridiculous and you know better than anyone. We need to have private/public collaborative response working effectively in this nation–both for human caused events like oil spills and terrorist attacks and major national disasters. Few are speaking out about the need to protect and enhance our National Incident Management System and the core concept of collaboration and mutual trust and respect. You took an awful beating from not just the media but the administration. It should not prevent you from speaking out boldly about the need for an effective Unified Command response and closer adherence to the key principles of the National Incident Management System.

5) Keep focused on building trust.

Sure trust was lost, fairly or unfairly. You can’t be the one standing there responsible for spilling five million barrels and not lose trust. But trust can be earned back. The focus is straightforward–do the right things and communicate about them well. You’ve done some tremendous work, particularly in community relations in the areas affected. Keep doing what you need to do, keep an eye out for the values and expectations of all the reasonable people out there, aggressively and consistently communicate and BP will not only restore the respect it once held, but earn new respect.

Best wishes to you Mr. Dudley.

Put this in the damned if you do, damned if you don’t category

It just seems impossible for even reputable publications not to spin their stories to make BP look as bad as they can. Frankly, I’m thoroughly disgusted with Forbes over this one.

The headline says “Contractor: BP interfered with critical efforts.”

OK, that will get attention. Here we go again, that horrible “British Petroleum” and now they wouldn’t even let a contractor lower a robot vehicle that might have stopped the spill early. He wanted to get his vehicle into the water and BP wouldn’t let him.

You have to go near the end of the article to get BP’s statement and reason why: A BP spokesman said in a statement e-mailed to The Associated Press on Monday that the company “performed critical safety calculations before deploying the ROV to ensure that this operation did not put workers in harm’s way.”

OK, so those running the response at the time looked at what the contractor wanted to do and decided against it. Why? Because they wanted to dump 5 million barrels into the Gulf? No, to save people’s lives.

Imagine for a moment if they had decided to go ahead and do this and put people at risk, what would the critics like Mr. Martin have said then? What would Forbes and Rolling Stone write? Profits above people I’ll bet. Damned if you do and damned if you don’t.

Why didn’t the headline say: “Investigative panel hears evidence that BP made critical safety decisions in early response.”? That’s the truth. That’s what the story says. Not only that, it might have gotten the headlines even better than this one–would qualify as a man bites dog story.

The guy behind the BP fake Twitter account doesn’t like to be challenged

First off–I don’t normally allow bad language on my blog. I figure it is my home and I can make the rules. But I’m allowing an exception here. (By the way, Crisisblogger is in the middle of being moved, you’re on the new site and these comments came to a post on my old site. I’ll get it figured out yet.) The exception to the bad language rule is because this interchange provides an insight into the “holier-than-thou” attitude of some corporate critics in the blog world.

On September 14, following the ABC News story revealing the identity of the LA-area comic who humorously posed as The “BP GlobalPR” department with a twitter account by that name, I blogged about it noting that with Josh Simpson’s new found celebrity, it was certain to spawn a host of Josh Simpson wanna-bes. That means any crisis will have dozens of fake twitter accounts. I also commented on Mr. Simpson’s new career of launching a GlobalPR.Here’s what I said:

He’s going to start a GlobalPR twitter account that is aimed at corporations who act irresponsibly. I wonder if his definition of irresponsibility might include posing as someone he is not? Oh dear, that is getting too serious for fake Twitter fans. Still, might be interesting to see a twitter account targeting comedians who act irresponsibly. Just a thought.

Obviously, Mr. Simpson did not take kindly to the suggestion that those who set up fake twitter accounts to attack and undermine someone might not be operating with full integrity. Here was his comment on my post:

He’s going to start a GlobalPR twitter account that is aimed at corporations who act irresponsibly. I wonder if his definition of irresponsibility might include posing as someone he is not? Oh dear, that is getting too serious for fake Twitter fans. Still, might be interesting to see a twitter account targeting comedians who act irresponsibly. Just a thought.

Irresponsible comedians? I kept my identity a secret because I wanted to keep the focus on bp and their wrongdoing. Congrats to you sir, you are a beacon for the backwards thinking that got bp into this mess. Forget your brand, forget saving face and do something of substance. This wasn’t some lesson on using PR in social media, this was about the banality of PR efforts in time of a real crisis. Fuck your career, fuck money, work for people and companies that don’t make you compromise your conscience, if it still remains.

Sincerely,
Josh Simpson
The “Irresponsible Comedian” who used his platform to raise $20k for the Gulf Restoration Network.

P.S. – You are a pickledick.

As a newly crowned “pickledick” I would like to say to anyone who operates in the social media atmosphere–if you can’t stand the heat, stay out of the kitchen. Mr. Simpson spent months making fun of people in a company, but seems a little sensitive to questions about his own integrity. As to being called names for making such rude suggestions to Mr. Simpson, the heat in the kitchen feels just fine to me.