Bad things happen in this world, it is a sad fact. When bad things happen, how you respond greatly influences the duration and intensity of the crisis. Right now our country is outraged, sad, confused, and struggling with the Gulf of Mexico oil disaster. What is more upsetting is how BP responded to this tragedy. Compare BP’s response to how Johnson & Johnson (parent of McNeil, makers of Tylenol) responded during the 1982 Tylenol cyanide crisis. It’s interesting that even with all the social media tools and hype, a good company response (5 BE’s) still works 28 years later.
BP Response
Because BP was slow to respond to the public’s needs (information, action) the topic of “oil spill” (which is the paramount disaster) is actually not mentioned as often as BP. In the chart below (source: Radian6 May 23-June 22, 2010), AEV’s Listening 360 service measured online mentions (blogs, forums, comments, tags) of “oil spill” vs.“BP” (included “Exxon” and “Chevron” to give a sense of the baseline of online mentions for other large oil companies). There were more online mentions (avg. 80,000/day) for BP than the actual crisis itself. It’s interesting to note that where our attention is should be focused on an environmental issue, BP is now in the spotlight because of their response.
“Oil Spill” vs. “BP” vs. “Exxon” vs. “Chevron”
You might feel that no company can really respond appropriately for a crisis like this.
Johnson & Johnson Response
Wednesday morning, September 29, 1982, 12-year-old Mary Kellerman of Elk Grove Village, Illinois, died after taking a capsule of Extra Strength Tylenol. Adam Janus of Arlington Heights, Illinois, died in the hospital shortly thereafter. Adam’s brother Stanley of Lisle, Illinois, and sister-in-law Theresa died after gathering to mourn his death, having taken pills from the same bottle. Soon afterward, Mary McFarland of Elmhurst, Paula Prince of Chicago, and Mary Reiner of Winfield, Illinois, also died in similar incidents. Investigators soon discovered the Tylenol link. Urgent warnings were broadcast, and police drove through Chicago neighborhoods issuing warnings over loudspeakers Johnson & Johnson, the parent company of McNeil, distributed warnings to hospitals and distributors and halted Tylenol production and advertising. On October 5, 1982, it issued a nationwide recall of Tylenol products; an estimated 31 million bottles were in circulation, with a retail value of over US$100 million. The company also advertised in the national media for individuals not to consume any products that contained acetaminophen. When it was determined that only capsules were tampered with, they offered to exchange all Tylenol capsules already purchased by the public with solid tablets.(source Wikipedia “Chicago Tylenol murders”).
J&J wanted to solve the cyanide tampering crisis, same as BP would like this oil spill to be contained and all the spilled oil cleaned up. But what J&J practiced was to find a solution first, damage control later. By being open for help and communication with the public and police, FBI, and FD&A; J&J got vital information that help identify source of the tampering, solutions to prevent future crisis and public trust that listen and responded positively to J&J messages.
They did this practicing the 5 BE’s:
BE Timely
BE Honest
BE Responsible
BE Transparent
BE Human
So how could BP have accomplished the 5 BE’s?
1. BE Timely
- Early BP messages were to avoid guilt and to control
- Damage control, instead of assessment and solutions. Lacked sense of urgency.
2. BE Honest
- Admit that size of spill is not understood in the beginning
3. BE Responsible (but don’t focus on control)
- Ask for help
- Invite ideas, set expectations about ideas taking time to test/evaluate. Give idea givers homework before they submit ideas
4. BE Transparent
- Talk about the who is working on the ideas, what you are doing with the ideas submitted by public
5. BE Human
- Empathetic, apologetic, disgusted
- NO whining
Is BP finished? BP has lost approximately 50% of market cap ($80 Billion) since the Gulf of Mexico oil spill .
Normally financial markets will discount any public bad news (i.e., costs of oil spill) in stock price. But this case begged the question: Is the stock price impacted by the hard cost of the oil spill or because no one trusts BP?
My opinion is that it’s probably a combination, with a low public trust, financial markets are heavily discounting the stock price, and it is not over. The costs of clean up can be a sensitivity analysis on a spreadsheet. But the impact of no/low trust in the company can be a going out of business signal, unless major change is enacted. I want and need BP to be successful in stopping the oil spill and cleaning up the mess. But my trust is on the sidelines, I need BP to express some of the public emotions. The current media messages are not coming across as genuine, is still appears that BP is more worried about their image ahead of the oil spill.
So what can BP do at this stage? Stop the oil spill and make progress on the clean up, then the public will be ready to listen. Use the 5 BE’s once you have some genuine messages to communicate about the crisis.
