a weekly blog for all interested in professional communications issues

Tuesday, June 8, 2010

BP sunk before it started damage control

I have resisted commenting in this blog on BP's saga of disaster in the Gulf of Mexico because I didn't want to pass instant judgement on a horrendous environmental and public relations catastrophe.

It has been five weeks since the company's gushing well head began destroying the shores of Louisiana and who knows where else. So it is time for a report card on the company's crisis management.

The first thing PR pros will tell a company in crisis is to own up to its responsibility. BP did that -- sort of-- when its well head began spewing oil into the gulf. However, it equivocated by laying blame on a subcontractor.

This was probably a mistake because most people would infer the company was just trying to cover its butt. BP should have been unequivocal in accepting blame up front. There will be plenty of time later to parcel out blame and examine who did what.

Secondly, the company may have displayed some arrogance in the beginning that it will undoubtedly regret in years to come. Although the world has never seen an environmental disaster quite like this, BP acted like it could fix it and make everything right, no problem.

It even gave cute, snappy little names like Top Hat to its various attempts to stop up the flow. As a result, the media have been busy reporting a litany of failures.

It would have been better had the company owned up to the fact it would be a long arduous task to stop the leak, and said as little as possible while it searched for a solution.

As Susan Reisler, vice-president at Toronto PR firm Media Profile, noted to The Globe and Mail: "What would have helped them from the very beginning is for them to say, 'We're in uncharted waters.' Because they didn't do that, they created the expectation they knew how to fix it."

BP has far too much in retained profits in its treasury to be on the brink of bankruptcy. However, it is hard to imagine how BP can carry on business as usual in the U.S., which accounts for 40 per cent of the company's market. Watch for the company to be sold off in pieces.

Also BP CEO Tony Hayward will be lucky to survive the balance of the year in his current job. Aside from a wobbly start in his company's damage control efforts, Hayward has said some dumb things such as "I would like my life back" as thousands of people in Louisiana are likely wondering what they will be doing for a living when all this is over.

Still, Hayward inherited an ill-fated oil well from his predecessor, John Browne, and therefore doesn't deserve all the criticism. But a struggling multinational will want to make a dramatic statement that it is changing its ways. The quick way to do that is to get a new skipper.

It happened on Hayward's watch. So he wears it.

Overall, this disaster will likely have the same effect on the petroleum industry as the Three Mile Island disaster did on the nuclear sector in 1979. Policy makers will find applications for deep water drilling just as toxic as they did for new reactors for for almost three decades.

The Alberta tar sands must be looking awfully good to investors right now.

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