Even Giants Fail – Let’s learn from BP’s Crisis Communication in its Dirty Business
A textile discounter that produces its goods under exploitative and inhuman working conditions in faraway India; a bank that manipulates currency rates to make billions; an automobile company that cheats governments and customers with manipulated engine control software — scandals that KIK, Deutsche Bank, and Volkswagen, for example, were confronted with, seem to be accumulating in the recent past. But in reality, manipulation, deception and exploitation, practiced by companies, run like a red thread through history. Even before the beginning of industrialization, food producers had been stretching flour with gypsum or lime, and corrupt politicians of the Weimar Republic let themselves be bribed by industrialists.
Corporate scandals are therefore not a modern-day phenomenon, but rather a wave-like appearance of decades marked by scandals can be seen in history. This selective accumulation of scandals can be explained by various exogenous influencing factors. Here, for example, the current political structure, the degree of freedom of the press and society’s sense of values play a role. However, the upheavals in the media systems play a special role here.
The oil crisis of the Deepwater Horizon
The global oil company British Petroleum — BP has also got into a sudden corporate crisis: On 20 April 2010 at around 10:00 PM CST, an explosion occurred on the Deepwater Horizon oil drilling platform — the catastrophe took its course:
- eleven workers lost their lives;
- 780 million litres of oil leaked;
- the oil rig sank two days after the explosion.
BP was under a great deal of pressure and a lack of explanation due to the accident and its consequences on the part of the public and official bodies.
What about BP?
- Was the company prepared for a disaster such as the one that occurred off the coast of Mexico in April 2010?
- Did everyone involved know what to do and how to deal with the various stakeholders based on the industry’s experience of past disasters?
- Was BP able to manage the disaster ethically and strategically with its crisis communication strategy and crisis management?
- And has BP done everything in its power to contain the consequences of such a disaster?
BP’s crisis management
As in almost all large corporations, BP also has a crisis manual in which the communicative and technical measures as well as responsibilities and procedures in crisis situations are defined. According to reports, the BP Crisis Handbook comprises 580 pages. The crisis team is quickly convened, the coast guard informed and all communication channels activated. But beyond that, the manual contains very little information. For example, there is insufficient explanation of how a leak can actually be closed or how communication can be maintained during the crisis. The US government also criticises these emergency plans retrospectively and denounces that only a dwindling amount has been invested in security and security concepts in relation to BP’s annual profit.
So how did BP implement the crisis management strategy operationally? Which crisis management measures and concepts were applied?
Openness and transparency — No chance!
In the entire crisis situation, BP, contrary to the success factors in a crisis situation ‘openness and transparency’, only slices out with the truth. The principle “deny — trivialize — make concessions” is more likely to be followed. BP’s representative Tony Hayward, at that time Chairman of the Board, is becoming more and more entangled in lies and false statements:
- Shortly after the sinking of the oil rig, Hayward denies the spillage of oil at the bottom of the sea.
- In the further course of the crisis, he puts the oil outflow at 1,000 barrels per day. After days, the estimate was revised upwards to 5,000 barrels per day. Finally, experts estimated that a quantity of 100,000 barrels per day was not unlikely (100,000 barrels correspond to 15,900,000 litres).
- In the course of time he speaks of a problem that can be solved quickly and spoke small of the possible consequences of the accident.
- In another interview Hayward talks about how he would like to have his life back before the catastrophe.
Hayward’s fourth statement, in particular, is perhaps the most critical of all. With this statement he puts his personal concerns first — before those of the impending environmental catastrophe, before those of the workers on the oil rig and before those of the eleven fatalities and their families. Growing public pressure and the accumulation of false statements by Hayward led BP to replace Tony Hayward with Robert Dudly as crisis manager on 4 June 2010. In October 2010, Hayward was also relieved of his position as Chairman of the Board. Robert Dudly also assumed the role of Chairman of the Board.
Online channels in BP’s crisis communication
BP was utilising online channels in its crisis communication accelerated. The aim was to present the events surrounding the Deepwater Horizon disaster in a transparent and open manner to the individual stakeholders, but especially to the public. For example, a website set up specifically for the accident was quickly accessible at www.deepwaterhorizonresponse.com. On the website, BP, together with the U.S. Environmental Protection, Occupational Safety and Health authorities, the U.S. Department of Defense and other companies involved, provided information on crisis mitigation measures, information on the Investigation Committee, and contact points for complaints or ideas or suggestions for improvement. The website thus served as a central communication medium — including all the social media channels used.
BP relied on the following social media channels for crisis communication: Twitter, Facebook, Flickr and YouTube. Twitter and Facebook are mainly used to provide the latest news from the crisis region and to report on the status of the independent committee of inquiry. Above all, BP communicated through these channels in order to establish a dialogue with the public — even with critical voices from society. For example, during the acute phase of the crisis, critical reports repeatedly emerged that BP would make it more difficult for journalists to report on the disaster by not granting them access to critical points in the crisis region. BP reacted to this on Twitter, for example, as follows: “We’re doing the best we can, over 24,700 personnel responding, one guy turned media away. Not protocol.”
Aspects of BP’s crisis communication
Despite the negative aspects mentioned in BP’s crisis communication, it can be said that BP was unprecedented in its offensive communication in connection with the disaster — if you compare the communication with the usual one in the petroleum industry. BP quickly took communication into its own hands, even if it did not see itself as directly responsible for the disaster. BP made particular use of the modern possibilities of online communication to inform and collect the respective stakeholders. The company created a supposedly transparent picture of the immediate events and measures following the disaster on site.
But this is precisely where there is a catch and many critical voices in the report. BP communicated openly and transparently about the measures taken to contain the threat of environmental damage. However, in the further course it turned out that many attempts for containment rather
were makeshift and unsuccessful and may therefore have caused even greater damage. On behalf of BP, for example, chemicals were sprayed by aeroplanes to decompose the leaked oil on the surface of the water. This chemical is Corexit, which scientists believe to be harmful to the environment and to humans and animals. The long-term consequences have not been sufficiently researched at the time. Nevertheless, this measure was carried out. The newly appointed crisis manager Robert Dudley responds to criticism of BP’s actions in a CNN interview by explaining that Corexit works in principle like a detergent, it is non-toxic and biodegradable. There have also been accusations in the media that BP had already secretly used the agent under water at an open well to prevent the oil from reaching the water surface.
In the course of the crisis more and more “untruths” were uncovered by BP —
manipulated photos that are supposed to construct a false reality; blackmailing fishermen who are hired for clean-up work but in return are supposed to waive their claims for damages; or bribing researchers who are supposed to publish their results only after the damages have been paid.
Another criticism is that BP has openly integrated disaster reporting into its corporate communications. However, there were rather one-sided reports about the obviously unsuccessful measures and BP’s involvement in the crisis. On the other hand, the possible and obvious environmental consequences of the accident were hardly reported. From a company perspective, it is understandable that BP does not adorn its corporate website with images of animals dying in oil — but BP has always avoided this issue during the course of the crisis. Reports were also made to the public that BP wanted to pay the fishermen living in the affected coastal regions for their involvement in clean-up measures. In return, however, they were to sign a contract under which they would waive any claims for damages against BP. This procedure only came to an end with a ban by the US government.
All of this, along with the countless makeshift attempts to close the leak and the high financial damage, have led to the public, the Government and investors are increasingly losing their trust in the company. What should be the primary goal of crisis communication is losing its effect through false information, lies, manipulation, a lack of sense of responsibility, poorly chosen statements and too slow a reaction.
With commercials and films (campaign “beyond petroleum”) costing millions of dollars, BP is trying to counteract this breach of confidence and is publicly reaffirming its responsibility for the clean-up and its financial strength for the economic damage.
Recommendations for action — that should have gone better
The analysis of the BP Group’s crisis management has shown that an essential factor has been forgotten in the strategy: Honesty. By acting and communicating dishonestly throughout the entire crisis communication dynamic, BP withdraws three of the success factors in crisis communication from their foundation. The success factors of
1. openness and transparency,
2. trust and
3. social responsibility
cannot be convincingly exploited by BP with its crisis communication strategy.
It is clear: If BP had lived a culture of honest communication in such crisis situations and had not more or less indirectly shifted the responsibility for the misfortune to Transocean, but had admitted openly and transparently for these, had not glossed over or consciously concealed facts, the lasting critical reporting on the part of the media would have been nipped in the bud possibly. By uncovering the strategy known as “greenwashing” and various lobby scandals by the media in the aftermath of the catastrophe, in combination with the failed crisis communication at crucial points, BP has lost considerable credibility.
In addition, BP was only able to apply the One Face success factor in crisis communication to a limited extent. BP initially made the mistake of making geologist Tony Hayward the boss or face of the crisis. The analysis shows that Hayward increasingly led to inadequacies in the company’s crisis communication. Here, an expert in corporate communications, supported by external consultants, might have communicated more skilfully. It would have been necessary to make a clear statement and honestly show the world public that “beyond petroleum” does not just mean “beyond propaganda”.
As shown in the previous analysis, however, BP was able to make sufficient use of the factors of target group-oriented communication and timing as a success factor. In conclusion, it can therefore be said that BP actually used only two of the six success factors as such in crisis communication.
The crisis barometer for strategic planning
In order to better prepare a company for possible and unlikely crisis scenarios in the future, models such as the matrix for identifying crisis areas should be seen as an adequate tool in strategic planning. With the help of this matrix, a company can identify possible problems or crisis triggers in the various corporate functions and thus prepare for them accordingly.
If possible problems and crisis triggers have been identified, they can be classified by means of a crisis barometer according to probability of occurrence and significance for the company. The crisis barometer is subdivided into four zones (grey, green, yellow and red) and thus reveals at a glance which problem areas pose the greatest threat to the company.
However, the mistake should not be made here to merely develop strategies and solutions for the possible crisis triggers in the Red and Yellow Zones — as has presumably happened with BP. An individual crisis plan should be drawn up for each crisis trigger. Essentially, the following points should be noted here:
- Detailed description of the event area
- Determination of the group of persons responsible
- Definition of reporting channels
- Detailed alarm plan
- Definition of alarm thresholds
- Description of information paths
- Definition of the accompanying measures to be introduced
In addition, the previous analysis shows that BP had shortcomings in determining the persons responsible in a crisis communication case. As far as this can be assessed, at least at the first management level — with Tony Hayward. Some key skills are of particular importance for setting up a crisis communication team. For example, the core members of the crisis communication team:
- Have the trust of management
- Knowing the company in all its facets
- Have the necessary competence to answer detailed questions about the crisis situation
- Have excellent communication skills
- Have experience in dealing with the public and the media
- Demonstrate high mental and physical resilience
It is to be assumed that BP has not consistently applied the above methods and guidelines for its crisis communication planning and crisis management strategy. The measures described can provide assistance in the crisis prevention concept for the potential crisis phase and help to avoid the recurrence of comparable major image damage.
Beyond the massive image damage and if you see how BP is presenting itself today — I strongly hope that technological development will soon free us from the bleeding claws of fossil fuels …