Saturday, May 22, 2010

BP's Reputation On The Line

There's increasing anger and negative public opinion over the huge oil slick hitting US shores because of the month-long clean-up happening in the Gulf of Mexico.

Is this the worst US oil spill, eclipsing the 1989 Exxon Valdez accident in Alaska?

The Case Against BP

"Lost all credibility," according to Democratic congressman Ed Markey.

"We're beginning to understand that we cannot trust BP. People do not trust the experts any longer," he said.

"It's obvious they are trying to limit information to protect their economic liability."

"It's very clear that BP has not been telling the truth," Massachusetts Democrat Ed Markey told CNN.

The case for BP:

"We've mounted the largest response ever done in the world. We put 20,000 people at this," BP's chief operating officer, Doug Suttles said.

"I understand the anger. But I can tell you, I don't know of anything, absolutely anything we could be doing that we're not doing."

The Political Spin:

"We are facing a disaster, the magnitude of which we likely have never seen before, in terms of a blowout in the Gulf of Mexico," White House spokesman Robert Gibbs told reporters.

"And we're doing everything humanly possible and technologically possible to deal with that."

President Barack Obama has named two men to head a bipartisan commission to investigate the massive oil spill.

They are former senator Bob Graham and former Environmental Protection Agency chief William Reilly.

Even at the lowest estimates, more than 6 million gallons of crude have flowed into the water since the disaster.

Independent experts have warned the flow could be at least 10 times higher than the current estimates.

Watch this space and learn.

If you are BP, how do you build credibility? Well through a new concept called Reputational Capital.

Like financial capital – reputational capital flows to where it’s wanted and stays where it’s well looked after. Reputations take years to build and can be lost in seconds. You can buy a logo or an image, but you have to earn a reputation.

My premise is that those organizations with the strongest internal values have the most powerful external reputations. Organizations with the strongest reputations are the most profitable.

Reputations are forged during difficult times. Given the recent global financial crisis, there has never been a better time to invest in your reputational capital.

What is reputation? Well firstly it’s intangible. Here are three definitions:

• The general opinion of the public towards a person, a group of people, or an organization (Wikipedia)
• “goodwill”
• The strategic standing of the organisation in the eyes of its customers

There are nine perspectives on reputation:

1. Marketing: +ve associations = supportive behavior
2. Economics: key strengths & competitive advantage
3. Strategic management: attract and retain customers, staff and shareholders
4. Sociology: impression management
5. Organisational science: sense making and sense giving through storytelling
6. Accounting: intangible asset that measures the difference between book value and market value
7. Legal: compliant and not breaking the law
8. Governance: being ethical and transparent
9. Synergistic: All of the above working together

Want to learn more. Book Tom as a keynote speaker for your next event or road test your crisis plan with a hypothetical crisis. Book here.

No comments: