Thursday, May 27, 2010

When It’s All Blown Up – Beyond Crisis Communications.

The “disaster in the Gulf” has generated far more than sad deaths and leaking hydrocarbons – as if these are not enough. There was big-time yelling (did you see James Carville on TV yesterday?). Plenty of finger-pointing and blame-passing. Tremendous political pressure. And also, engineering challenges and potential triumphs when the leaks are stopped and the clean-up has been accomplished.

Looking back to the quiet times BL (Before Leak), you may find reading “Schumpeter” instructive. BL in this case is April 8, 2010, a couple of weeks before Deepwater Horizon blew up. The Schumpeter to whom I’m referring is the nom-de-plume of the regular Business editorializer for The Economist.

This Schumpeter wrote here about “Brand rehab.” He outlined two rules for successful crisis management:

First, the boss needs to take charge. This means sidelining corporate cluck-cluckers such as lawyers (who worry that any admission of guilt will lead to lawsuits) or financial officers (who obsess about the bottom line). It also means putting the survival of the company above personal considerations. Many of the most damaging crises, by contrast, have resulted from foot-dragging at the top.

The second rule is that crisis-racked firms should redouble their focus on their customers.

Now we’ve gone beyond the normal activities of crisis management, or crisis communications. In the case of the leaking well, all the stakeholders, from the crew and families of the sunken rig to the people who live and work along the shores of the eastern Gulf of Mexico, to company shareholders, to politicians, have been seriously affected.

It’s not like the Tiger Woods version of the problem which The Economist article actually addresses. It is much more serious for everyone, including BP and Halliburton (which are clients) and Transocean (which is not).

No company operating in the Western business world today will ever be free of intense scrutiny. And so much has been written, broadcast and screamed about what ought to be done, should have been done – including nationalization of the offshore wells and lynching oil company executives – well, Signalwriter isn’t going to add to the load.

Except to ask you to take the long view. (Hard but not impossible.) The real Schumpeter – Joseph Schumpeter, 1883-1950 – wrote:

Every piece of business strategy acquires its true significance only against the background of that process [of Creative Destruction] and within the situation created by it.

The creative destruction of this offshore drilling event is going to massively affect business and regulatory strategies. The event’s going to change companies and regulators too. Will the effects and the changes be revolutionary…or evolutionary? I don’t have the answer; I look forward to taking part in the dialogue.

PS: I certainly expect some readers will take me to the woodshed because I’m wiritng about branding and marketing in the same post as the tragic events which began with the April 20 explosion and fire that sank the Deepwater Horizon rig. So, dear readers: “There’s lots of copy on these subjects – Google it for yourselves.”


CarolAnnB said...

Well Richard, I think you've encapsulated what I myself have been trying to express over the past few weeks. This spill will be the turning point in the endgame. The environmental damage and death toll are horrendous (and still counting); that being said, the final analysis will come with hopefully, more empathetic resolve for the sake of mankind and the planet. This may spring forward with more green technologies and eco-friendly energy production -- whilst creating a vacuum in the oil industry...not sure if there really is a "right" or "wrong" way to proceed in this instance as we only have one choice: preservation of the human race. How it plays out in the months and years ahead will determine our ultimate fate -- irregardless of who writes the history books on this one...

Great article, btw --

Peace & Light,


Richard Laurence Baron said...

Thank you, CarolAnn - I appreciate your insights as always...

maryjom said...

You know, the really sad part is the bunch who beat up on the oil companies - while driving their gas-guzzling SUVs at 80+mph. Hmmm - where do they think that gas is coming from?