Everyone is complaining about high gas prices, and many want to blame the oil companies for price gouging. More intelligent observers will note that no new refineries have been built in 30 years, that billions have been poured into existing refineries to meet ever increasing environmental regulations, that legislating all kinds of boutique fuels diminishes efficiency–all this not counting the skyrocketing cost of crude and skyrocketing demand via India and China’s rapid modernization.
So we have most major oil companies scrambling to use some of their profits to invest in refinery expansions. (NIMBYs and environmental regs won’t allow new refineries). BP has been seeking permits to expand their Whiting, Indiana refinery. That ought to be good news. More refining capacity, more product on the market, lower fuel costs. Wrong, the public is up in arms and opportunistic politicians are all over it.
This is a complicated issue with many dynamics. A couple worth noting. If the nation’s news media does not do a better job of informing the public about the costs/benefits of refinery expansion and the need to increase our ability to produce fuel products, we will have to soon accept the idea that we will be buying not only our crude from foreign sources, but our fuel products as well. As I have commented here, the industry has done a terrible job of public education. But the news media has a role to play as well and they need to step up to this challenge.
Secondly, and more to the point here, this shows the challenge of trying to do business when your public franchise has been lost or damaged. Those of us in crisis communication continue to try to make the business case for CEOs and senior leaders about the value of protecting your license to operate. I suspect that part of what is happening here is the loss of public franchise that BP has experienced over the past couple of years. That loss can come at a very very high price. In this case, not just to the company, but to anyone else how is trying to get a permit in the region and the entire country and globe for that matter. We are all being punished by mistakes made and by hyper-aggressive news media coverage that has demonized this company. It is time we all realize that this kind of demonization comes back to bite us all on the behind. Companies like BP owe it to all of us to do their damndest to protect their ability to operate and secure new permits. And the news media, if they were honest, would take a step back and say, you know what folks, we too have a role to play in the high prices you are paying at the pump today and tomorrow.
I’ve been pondering lately the question of the real role of reputations in corporate and organizational success. It’s always good to evaluate the basic tenets of your beliefs once in a while. I think the questions emerged while boating through Prince William Sound and wondering how a company who had been so damaged or broken by a disaster of that magnitude could now be so successful and admired–if not in the public eye, then at least in the industry and the financial community.
This story about Bausch & Lomb being sold to a private equity firm helps re-establish my confidence in the idea that reputations do matter. The company had a problem of uncertain origins with their contact solution. The product was recalled but confidence in the company was not maintained during that event. Now, they are selling in part, according to this story to be able to deal with the consequences of their loss of consumer confidence without being under the scrutiny of investors.
And, if you opened up the link above you could not help see the headline and story about “Dell Hell” again. Poor Michael. He could not have realized that his perfectly simple and acceptable last name which seemed to work so well for a corporate giant has now been turned into a nightmare name by the fancy of headline writers–and bloggers. Here’s a good question for crisisblogger readers: how does a company like Dell get rid of the “Dell Hell” appellation when it is clearly so popular with headline writers. I mean it rhymes, it doesn’t take a lot of space, it grabs immediate attention, it says Oh boy, they are in trouble again. How do you get rid of that? Start a campaign that says “Dell is Well”? “Dell Haters go to Hell”? How about the Dell Smell? Or Dell Farewell?
The simple answer for companies like Dell or BP who have their reputations tarnished, fairly or unfairly, is to go about your business, do the best job you can, get better at operations than ever before and time heals all wounds. Again, Exxon may prove that point. But something tells me that something a little more striking and dramatic needs to take place in order to overcome the frustrating tendency of reporters (including now citizen journalists) to fall into the old routines and traps and keep the negativity going.
One of the most important lessons in crisis management is that you will change, your organization will change. Will it be for the better? The Chinese character for crisis, I learned some time ago, can be translated “risk” and “opportunity.”
It appears that the judgment of the best minds on crisis management is that JetBlue did very well and that they may very well come out ahead–with their brand enhanced around the position as the best in customer service. That seems a big statement given the excessive media coverage about their nightmare of Valentine’s Day. But, Richard Levick, one of the most well known and respected names in crisis communication gives an explanation as to why this may very well be the case.
Perhaps an even more interesting reference in this lengthy post is Levick’s take on BP after their year of troubles. Being close to many of these people and their situation I have been careful not to comment much about BP, but I am much encouraged by Mr. Levick’s comments about BPs recovery.
Anyone who deals with the media recognizes that it is a common situation to have the headlines, and sometimes lead paragraphs, differ from the story. Understandable since most stories are more complext than can be adequately condensed into a headline, and the fact that headlines are typically written by an editor and not the reporter.
There was big news in the Baker report regarding BP’s safety record. Two items in fact. One of them is that BP has already substantially addressed all the recommendations put forward in the report. Second, and more important, the report provides a direct refutation of the very well publicized accusation of the head of the Chemical Safety Board that the safety problems at BP were a direct result of cost cutting. That theory goes well with the media and the public perception, but the Baker report said it wasn’t true.
However, you will note, these were not the headlines. The Cnnmoney.com report said: “(Baker report)said it found no evidence that BP scrimped on safety in order to cut costs” Based on this a headline writer could easily have written: Baker Report Shows Cost Cutting Did Not Result in Safety Problems at BP. That, however, is not what they wrote.
In fact, the Baker Report says that the focus of BP on personal safety instead of process safety was the real problem. Interesting. They also cited Lord Browne’s leadership in other key areas such as climate change.
Once the media decides on a story line it is very difficult to change it–impossible probably. And the way this is reported demonstrates that the story of irresponsible money-grubbing will continue to be the main theme–regardless of the facts.
Interesting article about “social news” in Fortune magazine. Seems the business world is waking up to the reality of 2.0 and the whole social phenomenon of the web. Particularly in this case sites like digg.com and newsvine.com. Here’s the article.
For most in the corporate communications world the question is going to be: what does this mean for me? It means that you can listen in and participate if you want to the conversation going on around the global watercooler. If you overheard in passing a group talking around the watercooler about you, or your company, or your family, or someone or something important to you, would you stop and listen.
Well, BP can now stop and listen to what people are saying–in this case about the problems with the Alaska pipeline. Here’s the digg watercooler talk.
Like at most watercoolers, you will see a diversity. The inane to the intelligent. The uninformed to the somewhat informed. Of course, there is no company participation. I wonder if they are even hanging around the edges listening. I hope so. It is one little snippet–hardly representative, of the conversation going on around the world.