CorpComms Magazine

'We are a different company from the one that held this event a year ago.' So concluded BP chairman Carl-Henric Svanberg at the company's annual general meeting on 14 April 2011.

Having reported their first annual lost in almost 20 years, a share price 30 per cent lower than this time last year, the sale of $30 billion worth of assets to pay for the clean-up and compensation and a new chief executive, no one is in any doubt that BP, one year on from Deepwater Horizon, is a different company.  But how much has it really changed?

On 20 April 2010, 11 men died and so began what is now accepted to be the worst offshore spill in American history.  Until the ruptured well was finally sealed on 19 September 2010, some 4.9 million barrels of crude oil had poured into the Gulf of Mexico.  According to an extensive advertising campaign in the run up to the annual meeting, BP has spent more than $13 billion on the clean up and committed $20 million to an independent fund to pay for environmental restoration.

BP has worked hard to restore the Gulf of Mexico. The strategy from the beginning was to keep the oil away from the shore. Today, more than 90 per cent of the Gulf is open for fishing and a research institute has been established to monitor the long-term impact of the crisis.

Had this been a one-off for BP, it is possible that the company's tremendous efforts to minimise the impact and restore the environment would have had a similarly positive impact on its reputation.  Unfortunately, Deepwater Horizon is one of a series of crises to hit BP and make the company headline news for all of the wrong reasons. In 2005, 15 people were killed and 170 others injured in BP's Texas City oil refinery explosion. BP was subsequently fined a record $50 million for failing to address safety violations. A year later, 267,000 barrels of oil spilled from its pipeline in Alaska. This time the fine was $20 million.

Trust and reputation are the cornerstones of business. Without them, companies cannot be given the latitude to make the bold and innovative decisions that can lead to growth. To restore their reputation and continue to dig and drill, it is not enough for BP to describe itself as different; the company has to demonstrate that it has changed.

Many organisations have risen from the ashes of a crisis. Prior to the earthquake, Toyota was seeing the green shoots of recovery following its product recall woes last year.  Companies such as Nike and Gap, once castigated for products manufactured in sweatshops, went on to help establish standards for supply chain integrity. What marks these companies out, and others like them, is their willingness to recognise their failings, embrace change and consistently follow through.

At no point during the crisis in the Gulf did BP shirk its responsibilities.  Despite Halliburton, Transocean and others all having a share in the blame, BP stepped up to the plate then, and continues to do so now.  However, given the magnitude of the crisis, there are important lessons we can learn as communicators:

• Leaders need to be visible. The crisis required a united front; too often Tony Hayward stood alone while chairman Carl-Henric Svanberg was hardly to be seen.

• Accept and address the fact that crises get political; the earlier replacement of  Tony Hayward's clipped English accent with the American drawl of Bob Dudley may have minimised the anti-British sentiments that raised the stakes even higher.

• Deliver on your promises: At the annual meeting, Bob Dudley promised that BP will act with 'honour, respect and trust.' Failure is not an option.

 Given this last point, it is therefore unfortunate that BP now finds itself in the middle of a public dispute between two Russian partners, TNK-BP, and Rosneft.  In terms of public perception, a contract dispute couldn't come at a worst time.

 While there is no doubt that BP is standing in deep reputational hole, at number three in the FTSE 100, it remains a company to be reckoned with.  However, as the saying goes, when you're already in a hole, it's time to stop digging. 

share me: del.icio.us | digg | reddit | Tweet