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.