Near miss in the North Sea

Is it time for more transparency at oil and gas?

Richard Whitby, Crisis Solutions

Drilling company Transocean had an incident on one of its North Sea rigs similar to that which caused the BP oil spill in the Gulf of Mexico.

Transocean was the operator at BP’s Deepwater Horizon rig when it suffered a blow-out killing 11 workers and causing one of the worst oil spill in history.

An internal company report shows that four months before the US disaster the Sedco 711 rig in the North Sea, which is leased by Shell and operated by Transocean, experienced similar problems.

In this case, however, all safety measures worked effectively, preventing a catastrophe.

In a statement, Transocean said: ‘Any (safety-) related events that occur on a rig anywhere in the world, including the one on 23rd December 2009, are immediately reported to management, fully investigated and the valuable information gleaned from that investigation is used to improve existing safety systems across the fleet.’

That said, Transocean's reassurance that lessons are learnt and spread quickly doesn't cut much ice given that almost exactly the same incident occurred and disaster ensued four months later in Gulf of Mexico.

Questions also arise as to how much transparency there is in the industry. It would no doubt be very useful to make information about incidents such as this available to the whole industry as quickly as possible if safety is seen as the overriding objective. However, crises like this are commercially sensitive, and companies may be unwilling to alert competitors.

This is in stark contrast to the airline industry. Qantas grounded their whole fleet of A380 super jumbos after just one engine failure and when there had been no casualties.

If the general public visited oil rigs on a regular basis no doubt health and safety would be far more transparent and tightly regulated.

Perhaps it’s time for governments to look more closely at how rigs are operated and to force companies to make information an industry wide commodity. It’s what the airlines do.

Communication crises of 2010

What can business learn?

Jim Preen, Crisis Solutions

This past year has not been easy for some organisations. Just ask Eurostar, Toyota and BP.

Almost a year ago Eurostar was struggling to rescue passengers stuck on trains in the channel Tunnel, Toyota was forced into perhaps the biggest product recall in history and BP now has its name linked to the worst environmental catastrophe on record following the oil spill in the Gulf of Mexico.

And as if to prove that ‘crisis’ doesn’t take time off just because it’s Christmas, we have WikiLeaks.

These crises make for uncomfortable reading, but what can we draw from them - particularly from a communication’s perspective?

Eurostar – communication breakdown

Late on Friday 18th and early Saturday 19th December 2009, five northbound Eurostar trains broke down within a few hours of each other – all inside the channel tunnel. Over 2000 passengers were trapped, some for up to 15 hours and many without food or water.

As a consequence all Eurostar services were cancelled and did not resume until Tuesday 22nd December. Estimates vary but at least 100,000 passengers were affected.

During the crisis, communications between Eurostar and their passengers were terrible.

Here is one example from an exasperated passenger: ‘I'm stuck here in Brussels and the information flow is appalling. The front line staff are not being told anything at all and are just telling people to contact customer services. The Belgian one is closed and the British one at Ashford is overwhelmed. People are getting information phoned through from the UK by people watching the BBC!’

Crisis Lesson 1 - Are you social media savvy?

People on the stranded trains were using Twitter the moment they left the tunnel as were other passengers trapped at stations. The anger and hatred poured on to the Twittersphere and Facebook, which soon featured a ‘We hate Eurostar’ group.

Prior to the crisis the only Twitter handles in use by Eurostar were: @little_break and @creamoflondon.

Any alarm bells going off? Yes that’s right, these were not normal communication tools - let alone crisis communication tools - this was marketing. @little_break referred to Eurostar’s marketing campaign - Little Break – Big Difference and was run by social networking agency ‘We are social’ that had been working with Eurostar sales.

Suddenly ‘We are social’ was catapulted into a full-blown catastrophe, as Eurostar had no other means of getting their messages out to the new media. They made valiant efforts to communicate, but were way behind the curve.

Social Media is an unrivalled conduit for getting information out fast to huge numbers of people, but organisations need to have plans and protocols in place to enable them to do this before crisis hits.

You can be sure that social media in all its forms will take charge of a crisis – as it did with Eurostar – if the company doesn’t.

BP and the Deepwater Horizon disaster

Unlike Eurostar, BP made good use of its communication toolkit. Their website was excellent. It was well designed, full of well produced content, and stocked with helpful resources. At the time, anyone accessing www.BP.com was automatically redirected to the Oil Spill response page. There were also links to their offerings on Facebook, Twitter, and YouTube – including a whole YouTube page showing their videos.

Crisis Lesson 2 - Do you have the right person in charge?

Of course, all the social media in the world wasn’t going to do much good when millions of gallons of oil were washing ashore, crippling the fishing industry in Louisiana and Mississippi and destroying the white-sand beaches of Alabama and Florida.

The enormity of this crisis meant it couldn’t be spun, even by an army of PR professionals slick in the art of both old and new media. What this crisis called for was a tough and straight talking CEO who tackled the emergency head-on. Unfortunately, the former geologist and keen sailor, Tony Hayward was not up to the task.

He did untold damage to BP's reputation with his celebrated gaffes about how he ‘wanted his life back’ not thinking how this would play with the relatives of those who had actually lost their lives on the rig and those who had lost their livelihoods in the fishing and tourism industries.

It is one thing to be a CEO in normal times, quite another during a crisis. Hayward appeared weak and defensive without the gravitas to handle the situation and was ultimately brushed aside.

Choosing the right person to become the public face of an organisation is no easy task. It must be somebody who is not only comfortable speaking to stockholders at the AGM, but also able to face the media in full cry along with angry members of the public and an openly hostile government.

Toyota and the biggest recalls in history

One of the more troubling aspects of Toyota’s recalls were the company’s differing accounts of the sources of the problem. One recall, covering over 4 million cars, involved sticky accelerator pedals. Later on Toyota also recalled 5.4 million cars whose pedals could get stuck on floor mats. Then Toyota said these were software problems.

Crisis Lesson 3 - Get the facts quickly and mange the risks effectively

From a PR perspective this meant that Toyota was constantly playing catch-up. Members of the press and often the wider public seemed to set the news agenda.

Toyota never took control of the story – they seemed unable to set out the facts and be straight with their customers. The crisis always seemed to control Toyota rather than Toyota controlling the crisis.

They needed to be seen to be going the extra mile and not doing the bare minimum. In situations like this the public must never be allowed to think that a company is putting profits ahead of customer safety.

WikiLeaks – now governments feel the heat

Earlier in 2010, Hillary Clinton made a landmark speech about internet freedom, which many interpreted as a rebuke to China for its alleged cyber attack on Google. ‘Information has never been so free,’ she said. ‘Even in authoritarian countries, information networks are helping people discover new facts and making governments more accountable.’

Now she calls WikiLeaks disclosures ‘not just an attack on America's foreign policy interests, but an attack on the international community: the alliances and partnerships, the conversations and negotiations that safeguard global security and advance economic prosperity.’

It seems that in the ‘Land of the Free’ freedom of information is not always welcome.

A few years ago when we typically wrote on paper, the amount of information contained in the recent WikiLeaks disclosures would have been physically huge and almost impossible to smuggle. Now that information can be digitized and an email containing millions of words can be transmitted in the blink of an eye. So what can business learn from these events?

Crisis Lesson 4 - Digital communication is not secure

It may seem screamingly obvious but email and indeed most other modern forms of modern communication are often far from secure. Remember how easy it was for The News Of the World newspaper to hack into celebrity voicemails.

If your colleagues or clients request confidential information, be security conscious. Are your cleared to provide this information to others and are they cleared to receive it?

If they are, make sure they are happy to receive the information by email. If there are concerns, and with sensitive information there should be, encrypt the documents on a thumbdrive or a CD and have it delivered personally by a courier or deliver it yourself.

Speed is not always of the essence

WikiLeaks has shown us that the great and the good behave in remarkably similar ways to us lesser mortals. They fire off irritated and irritating emails just like us - it is so easy to do.

When you had to write a letter it took time and was a more considered form of communication. Now an angry or indeed libellous response to an email can be shot back at your adversary at warp speed – not always to their or subsequently your delight. What was said in haste becomes a document of record so pause, count to ten, have a cup of tea and then communicate. Speed is not always of the essence.

The new media

There are many other lessons to be learnt from these four incidents and indeed from other crises that happened during 2010, but if I had to choose only one going forward into the New Year it is the importance of being conversant with the new social media platforms.

Companies must scoop up all the Twitter handles that pertain to them and have Facebook and YouTube pages. These are some of the most effective and far-reaching forms of communication the world has ever seen, but an emergency is not the time to become familiar with them. Use them in normal times and they could just save you in a crisis.

Crisis Solutions - on tour throughout Europe

Crisis Solutions is currently on a tour of European financial capitals, running incident management workshops and exercises.

This week CEO Dennis Flynn was in Milan delivering a workshop at a major investment bank. Here is a comment from the client’s Deputy Chief Operating Officer:

Thank you very much for your guidance (during the) exercise for the Milan crisis community. I have only received very positive feedback from all attendees including (my boss) who was initially sceptical of the benefits. I understand they would appreciate a second round any time.

Next stop: Frankfurt and then Zurich

A failure of the imagination

The Irish banking crisis – a crisis management perspective

The final 9/11 report on why the US was so ill prepared for the attack on the Twin Towers said: ‘We do not believe leaders understood the gravity of the threat’ and that the most important failure was ‘one of imagination.’

In July of this year all Irish banks passed the so-called stress tests and were given a clean bill of health. We now know the banks are utterly broken and have brought Ireland to its knees.

The stress tests were worthless with the wrong questions being asked, but why? Was it simply so benign answers, the world wanted to hear, would be forthcoming?

Dennis Flynn, Crisis Solutions CEO, says, ‘The difference between business continuity and crisis management is that the former prepares for the expected while the latter focuses on the unexpected. One is mechanistic and quantitative, the other freewheeling and qualitative.

He believes that effective crisis handling only occurs when the two work in lock step, ‘Those involved in business continuity must take risk assessment seriously, be brutally honest about potential crises and not pose questions that provide comfort blanket answers.’

Reflecting on the stress tests and the Irish banking crisis Flynn says, ‘Yes again, poor crisis readiness is shown to be a failure of the imagination’.

Irish economic meltdown - a crisis communications perspective

Until recently the Irish economy was known as the Celtic Tiger – these days it looks more like a white or perhaps green elephant.

Everyone knew that Ireland was going to have a bailout foisted upon it, whether from the EU, the IMF, the ECB or all three. Irish banks, now known as zombie banks, are in tatters and the government in a state of collapse but still two days before the inevitable rescue package the Irish government continued to play down the level of crisis.

Prime Minister Brian Cowen said, ‘The strategy being pursued by Government has addressed the difficulties facing the banking system, is bringing sustainability to the public finances and is resulting in ongoing improvements in competitiveness.’

He went on to say that his government was not looking for immediate outside assistance. It seems two days is a long time in politics because yesterday he said, ‘The European authorities have agreed to our request’ and a bailout accepted.

So what happened in two days? Why was everything under control and a bailout not required and then 48 hours later the PM had to don the hair shirt and proffer the begging bowl?

Well of course nothing changed in two days - what we are looking at are two different views of the same narrative.

International financiers and EU policy makers feared that if Ireland wasn’t shored up, the contagion would spread to Portugal, Spain and beyond (it still could), while the Irish government were dead set on saving their skin and didn’t want to accept the inevitable austerity measures that would be a condition of any bailout.

Now the greens seem to have triggered an election that the government say will be held in January - that’s if it can hold on that long. So a bailout is being put in place and it looks likely the government will be booted out of office in short order.

The best crisis communications in the world couldn’t save the Irish government or the Irish economy but surely accepting the reality of the situation and not engaging in wilful obfuscation would have been a better way to go instead of saying ‘we have the situation under control’ to then hitting the brakes and executing a spectacular u-turn.

So perhaps it’s not that the Irish economy is a white elephant, it’s the elephant in the room that the government was unable or unwilling to acknowledge.

The social media revolution

Are you ready for this?

Qantas crisis

It is interesting to note that Qantas are keeping the name of the engine manufacturer, Rolls-Royce, firmly in the frame.

Similarly a press release on the Airbus website states, ‘With aviation safety being of paramount importance to Airbus and following the engine failure of Qantas A380 flight QF32 on 4th November 2010 Airbus has issued an All Operators Telex asking A380 operators with Rolls-Royce engines for power plant inspections to ensure continuous safe operations of the fleet. The document supports the requirements issued previously by engine manufacturer Rolls-Royce. Operators with Engine Alliance engines are not concerned.’

This contrasts with BP’s handling of the Gulf of Mexico oil spill where at least initially they took full responsibility for the accident. Latterly they tried, largely unsuccessfully, to bring Halliburton and others into the picture.

Crisis Solutions in Marketing Week

Crisis Solutions has coverage in the opinion section of Marketing Week. Go here.

Marketingweek.co.uk has 218,766 monthly unique users and provides news and information for marketing, advertising and media professionals.

Brand and reputation

The Lizard has been reading an interesting article in The Marketer magazine on brand and reputation. It can be found here.

The article attempts, with some degree of success, to conflate many different marketing and brand ideas. One, which I would dispute, is that the Internet has changed everything when it comes to the consumer’s relationship with a product.

When Perrier had a problem with their bottled water in the 80s (benzene was found in the drink and the recall was handled very poorly) the consumer knew all about it and when Perrier brought their water back on sale, the bottles were smaller and the price higher. The customer appeared to be paying for Perrier’s mistakes and they weren’t happy. As a result Perrier was soon gulped down by Nestle. What’s different now, and it is largely a product of the Internet, is just the speed with which consumers can gather information and voice their opinion.

The other issue the article raises is M&A. Particularly when a corporate giant buys a boutique brand well liked by the public. It’s a tricky move for all sides to pull off as Green and Black and Innocent have found. As Ben and Jerry’s point out, when a small brand is gobbled up it must protect its own identity.

One example would be Pret a Manger. It’s an expensive but generally well-liked lunchtime grab and gobble food store that makes much of its green image. This is on the front page of it’s website: ‘Pret creates handmade, natural food avoiding the obscure chemicals, additives and preservatives common to so much of the 'prepared' and 'fast' food on the market today.’

In 2001 it was snapped up by McDonald’s the very antithesis of all that is ‘Pret’ and in 2008 it was bought by private equity house Bridgepoint – capitalists red in tooth and claw and very far from a small boutique brand. However because Pret have managed to keep clear blue water between their owners and their brand they haven’t suffered. A lesson for any corporate giant that wants to swallow a small but much loved minnow.

Maldives PR nightmare

I suppose couples who have just returned from getting married at the Vilu Reef Beach & Spa Resort on the Maldives must be wondering what was actually said at their ceremony.

Thousands have now watched the shaky YouTube video of the Swiss couple renewing their wedding vows at the resort where the celebrant calls them ‘swine’ and ‘infidels’ and much worse.

Opinion on the Internet seems to be equally split between those condemning the locals appalling rudeness and the foolish westerners wanting to attach some sort of faux spirituality to their marriage.

I suppose it’s the equivalent of a chef spitting in the soup at a posh restaurant, something we’ve all thought about but don’t want to dwell on.

Locals working for tourists the world over come to resent the incomers, but of course if the tourists don’t come the locals have no work.

This is particularly true of the Maldives, which contains many very poor people who as a matter of course rub shoulders with the super rich. These disparities have produced an ugly response.

The Maldives government is now engaged in damage limitation and the two local people seen on the video have been arrested. On the official Maldives’ website a government spokesperson says, ‘No stone will be left unturned to ensure that an incident like this never happens again.’

Well, they had better make sure it doesn’t because the Maldives have no natural resources outside of fish and banks of sand and no other industry except tourism. If the tourists stop coming then they really have nothing.

My bet is that the rich and those on a once in a lifetime trip wont be put off, but in future many will want their wedding vows in English or a language they can understand.

Big oil face off

It seems we have the oil and gas giants positioning themselves post BP’s Gulf of Mexico oil spill. First we had Shell boss Peter Voser attacking BP over oil well safety saying, ‘Shell would have drilled this well in a different way and would have had more options to prevent the accident.’

Now we have Chevron hedging their bets and taking a more cautious approach. Richard Cohagan, managing director of Chevron UK, admitted their new deepwater drilling campaign off the Shetland Islands could cause an oil spill of greater magnitude than BP's Gulf of Mexico disaster. He went on, ‘Deepwater Horizon has given us a new perspective on how bad things could be.’

If you watch Chevron’s advertisements they tend to be very caring and sharing and this line from their UK Chief would seem to fit with this approach. Whether it amounts to anything more than spin over substance is another matter.

Facebook and Twitter in times of crisis

How can Facebook and Twitter best be used to overcome a crisis?

Twitter
The use of Twitter by newspapers and broadcasters is extraordinary, given that it’s all done in 140 character chunks. Your company must monitor Twitter mentions of your brands, products and services.

Have a Twitter account set up ahead of a crisis and use it – get conversant with what it can do, use it for marketing so that if a crisis does strike you’ll be ahead of the game and can get information out quickly.

Storm warning
You can’t defend a brand and its reputation if you’re not listening for signs of an impending problem. One under reported aspect of the BP fiasco was that they didn’t think to scoop up relevant BP ‘identities’ on Twitter.

@BPglobalPR sounds like a legitimate arm of BP’s PR machine, but it wasn’t. BP was ‘brandjacked’ on Twitter with tweets appearing such as:

‘Please do not take or clean any oil you find on the beach. That is property of BP and we WILL sue you.’

What does this say about the effectiveness of BP’s PR team in time of crisis? How did an enterprising joker on Twitter manage to fly under the radar using BP’s own name and logo?

Facebook
Facebook is a great tool for talking directly to all your stakeholders. Create a corporate site in “normal” times and get to know its uses and abuses. In a major crisis you may need a corporate response page where you can post comments and pictures that refer entirely to the on-going incident.

Social media crisis management must dovetail with any existing crisis management plans you have in place. In many ways traditional best practice in crisis management is reflected in the brave new world of social media - it’s just that it now all happens at the speed of light.

Communication Strategies: a new book from Jim Preen

To survive an incident, organizations need more than a successful communication strategy – they need an incident communication plan. This book helps organizations to take control and start planning their response immediately.

An incident is often provoked and inflamed by the media, and inept incident communications will only make things worse. Packed with case studies, this practical guide shows how it is possible to overcome and actually prosper in the full glare of the media.

Communication Strategies demonstrates how to implement and deploy a thorough incident media strategy. Based on BS 25999-1, the British Standard for business continuity management, this invaluable book covers diverse elements including:

* The importance of call cascades
* How to run successful press conferences
* How to set up and run an incident press room

This book would help communications teams in medium/large companies; risk managers; business continuity managers; and PR professionals.

Contents of Communication Strategies include:

* Introduction
* Types of incidents
* Determining the contents of your plan
* Press gang
* Strategy layout
* How the strategy migrates to a plan
* Press conferences
* Holding statements, press releases and templates
* Coping with the press pack
* Media monitoring
* Call takers
* Information, fact sheets and general know-how
* Post-incident evaluation
* Testing the plan
* Communication plan checklist
* References

Voted 'Book of the Month' by Quality World, the magazine of the Chartered Quality Institute (CQI)
"...provides a wealth of practical guidance to help prevent a stressful situation unravelling through poor information management in an unguarded moment."

Buy the book here

It’s good to talk when things go wrong, says CEO of Crisis Solutions Dennis Flynn

One of the most common problems in crisis management is poor communication. It’s not just communication to the outside world that catches people out; it’s often an internal communication breakdown that can turn a run-of-the-mill problem into a full-blown crisis.

If the operational staff that are solving the problem aren’t talking to the senior team tasked with updating customers and the general public, then everyone ends up with mixed messages and the crisis spins out of control. Just ask outgoing BP chief Tony Hayward. Practising the art of communication through proper integration of operational and communications teams before there’s a problem can help avoid this scenario, and minimise the consequences of the crisis.

It is not uncommon in companies to see board level members becoming isolated and out of touch with what is going on at operational level. When the appropriate communication channels are not put in place, responsibilities and expectations on all levels can become blurred, which can raise a state of panic when a crisis occurs.

It is very difficult for the head of comms at an organisation to be in two places at once and provide accurate information to the board while dealing with things at operational level. It’s important that employees on all levels train and practice communicating regularly to each other and that board level members proactively converse with operational staff.

Undertaking exercises that allow everyone to have a voice means that the senior team can become more in tune with the organisation’s operations, which can be vital in reacting to a crisis situation.

In order to create an effective link between the operational level and senior team, the logistics of an organisation’s communications channel needs to be considered. For example, using runners to gather news from each level of an organisation and provide updates to the senior level can be an effective way to improve the reactions of decision makers.

The role of a communications team can be vital in the event of a crisis, as messages need to be relayed to stakeholders as to the state of the business. However, a comms team can only be effective if it is in the crisis comms ‘zone‘. Communications teams are often accomplished at issuing good news about the business, but in order to cover bad news that can affect the company, they need to be aware of the nature of the industry they are working in and how to spot a crisis emerging. A fully proficient comms team can then have an advisory role in proceedings rather than simply delivering responses from senior management.

In order to minimise the effects of a crisis, it’s imperative that operational staff have a voice to influence senior level members. This can be achieved by putting the appropriate communications channel in place and making sure that the executives work with operational staff to train and practise communicating process issues.

Being able to spot a crisis is obviously important for both operational and comms staff. Having a comms team that is knowledgeable of the company and potential industry issues can ensure that accurate and timely information is given to senior management so that the correct decisions can be made when a crisis occurs.

Dennis Flynn is CEO at crisis management specialists Crisis Solutions

Shell boss attacks BP

You will no doubt have noticed that the boss of Shell has launched a blistering attack on beleaguered rival BP over the devastating Gulf of Mexico oil spill.

Peter Voser said his company would never have made the mistakes that led to the death of 11 workers on the Deepwater Horizon rig and the biggest environmental disaster in US history.

'Shell clearly would have drilled this well in a different way and would have had more options to prevent the accident from happening,' he said.

There has never been much love lost between Shell and BP. Old hostilities have renewed now the worst of the BP Deepwater Horizon fiasco is largely over.

Peter Voser’s comments have to be seen in light of the fact that before the oil spill Shell had seen BP overtake it as Europe’s biggest energy producer in terms of market value. While the disaster was ongoing it would have looked unseemly for Shell to attack BP – now the gloves are off.

There must be a lot of Shell workers and executives out there wondering whether it was wise of Voser to make these remarks which would come back to haunt him if Shell were to suffer a similar disaster.

It’s probably no more than a PR thrust at BP but of course if BP needs money to pay for the clean up then Shell would want to be in place to pick up any assets that came on the market at the right price. Perhaps a little canny positioning is going on.

Don’t forget Shell’s own past is far from spotless. In 2004 they massively over estimated their oil reserves and were forced to pay out £200 million in fines and compensation.

Two big oil and gas beasts are at each other’s throats again.

The return of the Lizard

The Lizard has been away - I think you will have noticed - but he's back, stronger and more powerful than ever. Watch this space!