Tag Archives: reputation equity

Harvard study says BP’s “greenwashing” paid off

I greatly object to the obvious bias in this report on the value of “greenwashing.”  According to Wikipedia “greenwashing” is “spin” and deception.

The real point and value of this study about the impact of BP’s pre-spill advertising on its sales and reputation after the 2010 Gulf oil spill is that building reputation equity makes a huge difference when you encounter a major crisis. This is an extremely important point. Not because it supports buying expensive advertising, but because it supports the value of working hard to build reputation and trust before an event.

I call it reputation equity and liken it to a bank account. It’s a fund of goodwill and positive perceptions that will be extremely important when/if you ever face a major reputation crisis. In my other blog at emergencymgmt.com, I suggested that my emphasis in 2014 would be building that reputation equity and suggested some ways to start thinking about that. This report provides academic credence to that position and further encouragement to continue to focus on that part of crisis communication.

Crisis communication is primarily about preparation. If you’re not prepared to deal with it and communicate effectively, it’s almost a matter of just stick your head down and ride out the storm or succumb to it (like Freedom Industries in WV). But preparation is not just about putting a good plan together, creating message maps and all that–those are extremely important of course. Preparation is above all , analyzing your risks and redoubling efforts to prevent bad things from happening and then, working hard to build the trust in your key stakeholders that will be essential if/when you do face a problem.

This study doesn’t provide any information on the relationship building with key stakeholders that I think is the core of a reputation equity effort. But it does show that working hard to communicate who you are with the public prior to an event happening can pay off big time when the big event happens.

About “greenwashing.” I can understand why many believe that BP’s ad campaign “Beyond Petroleum” was deceptive. In one way it was. I don’t think it communicated, as I see with other oil companies such as Shell, that alternative and renewable energy sources are one part of the mix and that petroleum would continue to be essential. But I think this is judging the past from the perspective of the present. Even just a few years ago we were facing “peak oil” and renewables such as solar, wind and geothermal were the future. Nuclear was even getting a new look. Then fracking happened, and Fukushima and now nuclear is once again off the table and the US (amazingly) is set to become an energy exporter–at least until the rest of the world starts getting serious about natural gas. When the Beyond Petroleum campaign started I believe it was aspirational and forward thinking telling the world what BP was and that it was going to be about far more than oil. Is that greenwashing? For some, no doubt, but I think the researchers doing this study are showing their bias. It’s noteworthy that their own conclusion is that the government needs to get involved in investigating environmental claims made by companies.

Yeah, right. Because we little people are too stupid to see through the “greenwashing.” Give me a break.

 

Farmers now have “go to jail jobs” too

(Similar post also published on emergencymgmt.com)

A few years ago, a friend and board member of my company who was an oil industry executive, talked about “go to jail” jobs. He said a lot of senior leadership positions in the oil industry were now jobs that carried the risk of jail time if things went wrong on their watch.

That was borne out in the first major crisis I was involved in, the Olympic Pipeline accident. The GM of the pipeline company went to jail for six months. This despite the fact that the accident, like many, was caused by a very strange confluence of a number of factors, many of which he had absolutely no control over and which, if they had changed just a bit, would have prevented the accident from happening.

Now I am shocked, appalled and saddened to find out that farmers also have “go to jail” jobs. This article from NBC News tells about the sentencing of two young Colorado farmers from whose farm tainted cantaloupes emerged that resulted in a listeria outbreak that killed 33 people. The farmers narrowly avoided jail time, instead are sentenced to five years probation and a large fine. The reporter/editor of the article clearly feels this was a gross injustice. Look at the headline and focus of the article.

It is a horrible tragedy that 33 people lost their lives, including the 92 year old “spry” victim whose son is so disappointed in the result. If there was intent, if there was criminal negligence, if there was an established pattern of callous disregard for harming others, I could see the calls for treating these farmers as criminals. But, even this very biased article makes it clear there was no intent, no pattern, no callousness. There was a mistake, or mistakes made. The farmers are called “salt of the earth” types.

I will withhold further comment on the sad state of our justice system, and our society, and the state of our media. Instead, this situation requires the attention of anyone who is in a business or government position where action or inaction could harm others. And that is a lot of you.

First, the lesson clearly is to look at all your plans and procedures and make certain you are doing all you can to prevent such things from happening. That is the value of such a great tragedy and the shocking outcome. Preventive measures will greatly reduce the risk, but not eliminate it. And when, despite your best efforts, something goes horribly wrong, what do you do?

This situation creates a dilemma for crisis communications. In the pipeline accident the company was “lawyered up” to the max. But, it made sense despite the severe impact on reputation. The company went bankrupt, but gasoline continues to flow through the pipe. Now farmers and others have to look at the legal implications when something goes wrong. A sincere apology with acceptance of responsibility is absolutely necessary to avoid turning the media and public against you. And a highly negative public atmosphere is just what a plaintiff’s attorney or prosecuting attorney wants when selecting a jury. So, it makes sense to be transparent, empathetic and forthcoming. But, such admission in our great nation, is going to be used against you in court. So, you end up walking a very fine line–or saying nothing.

There are two preventive measures to consider right now. One, we already talked about, which is preventing bad things from happening. The other, recognizing that all risks can’t be eliminated, is building reputation equity before something bad happens. I commented on this on Rich Klein’s “The Crisis Show” last week looking at the very different press coverage and social media comment about Freedom Industries vs. International Nutrition. Both had tragedies–one of them involving fatalities. But it was the company without the fatalities that took by far the greatest beating. It’s worthwhile looking at why that may be.