BP: Benighted Planning

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“Plan for what is difficult when it is most easy,

do what is great while it is small.

The most difficult things in the world must be done

while they are still easy,

the greatest things in the world must be done

while they are still small.”

The Tao-te Ching, or The Way and Its Power

Lao Tzu (604-581 BCE)

….

Let’s simply stipulate that BP’s response to its disaster in the Gulf is shaping up to be the new standard for mishandled crises.

We’ll continue to harvest how-not-to lessons from BP as long as Tony Hayward continues to talk,  the oil continues to flow, and beaches, fisheries, wetlands, wildlife, and livelihoods remain at risk.

But what are the deeper lessons?

I believe the key is this: The seeds of what happened after the April 20 explosion were planted well before April 20.

To harvest the most meaningful lessons from BP requires us to look at the sequence of events leading to the fire, explosion, collapse of the rig, death of 11 workers, and the surge of oil into the Gulf.

Prevention More Important Than Response

However important getting crisis response right may be, crisis prevention is even more important.

BP got both spectacularly wrong.

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Apology Update: Public apology is a five-note chord.

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Recent public apologies from Goldman Sachs’ CEO Lloyd Blankfein and Tiger Woods made me wonder why we accept some apologies and denounce others.
Which components of a public apology show us that it is authentic and sincere and, therefore, that we can accept it? Is there a perfect public apology?

Goldman Takes The Lead

When Goldman Sachs’ CEO Lloyd Blankfein issued a public mea culpa, his goal was to convince the public that he accepted responsibility for and deeply regretted his firm’s role in the financial crisis. As a form of restitution, he offered to have Goldman invest $500 million over five years to help small businesses. Mr. Blankfein’s was the first official apology by an investment bank of that caliber, which is by itself a unique occurrence. And yet, Goldman’s apology caused a mixed reaction.
Some stakeholders gave the company credit for taking the initiative to apologize and for its willingness to help small businesses. Most others, including the general public, questioned the sincerity of the apology and its real value. The media called it a “faux apology”, a “non-apology”, a “hollow apology”, and an “unspecified apology.” The author of Mean Street blog (WSJ) Evan Newmark called it a “big PR exercise” that is “so sequenced and packaged that it’s bound to come across as disingenuous, even deeply cynical.”
The negative public reaction was caused mainly by the apparent disconnect between Goldman’s carefully calibrated message and real issues that the company still needs to fix if it is to restore public trust and earn forgiveness.

Tiger One Over Par
Tiger Woods’ attempts to apologize also caused a mixed public reaction.
On November 27, 2009 Woods crashed his car into a fire hydrant near his house. After the incident brought to light many affairs, Woods posted two separate apologies on his website, several days apart.
After the first apology mainstream media, bloggers, vendors, corporate sponsors, and the golf community expressed major disappointment and dismay at Woods’ behavior and did not accept his apology as sufficient. Woods’ story caused a lot of debate even among the apology experts. The only stakeholders who showed support were his fans. Most of them accepted his apology, demonstrating higher tolerance for his personal failings.

Woods’ second apology was more successful and resulted in mostly positive reviews among his fans, critics, media, the golf community etc. It could have been even more effective if the athlete had come clean earlier and had delivered the apology in person rather than on his website.

Why Didn’t the Apologies Work?

Why didn’t people believe Goldman Sachs CEO’s apology? Why did Woods’ first apology reach his fans but did not convince others? Why did his second apology result in more positive reaction among his stakeholders?
What type of public apology do people need to hear to be able to believe it and accept it?
The authors of “The Five Languages of Apology,” Gary Chapman and Jennifer Thomas, might have an answer. Read more

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Humility Update: Humility is Strength. Obama Wins Nobel Peace Prize

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The Paradox of American Power

Between the 9/11 attacks and the US invasion of Iraq in 2003, the foreign policy establishment focused on the difference between “soft power” and “hard power.”

The concepts were elaborated in a 2002 book by Joseph S. Nye, Jr., then dean and now University Distinguished Service Professor at the Kennedy School of Government at Harvard University. Nye is consistently ranked one of the most influential US scholars on foreign policy.

His book, The Paradox of American Power: Why the World’s Only Superpower Can’t Go it Alone, was remarkably prescient. Read more

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Worth reading: Booz & Company CEO Succession Survey, “Stability in the Storm” by Per-Ola Karlsson and Gary L. Neilson

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A Leadership Test

Leaders are judged on how they deal with their most significant challenges.

As American Express CEO Ken Chenault said on the cover of the November, 2007 Fortune, “We have to remember that reputations are won or lost in a crisis.”

Each year the consulting firm Booz & Company studies CEO turnover among the 2,500 largest public companies in the world.  Their report, published in Booz’ online magazine Strategy+Business, is worth reading, and provides not merely statistical data and trends, but also insights into the particular leadership challenges facing CEOs today.

The 2008 CEO Succession Survey, published this month, concludes that the financial and economic meltdown that began in the last third of last year is still causing CEO turmoil.  Forced CEO turnover remained high in 2008, but those CEOs who kept their jobs aren’t out of the woods yet: Read more

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Apology Update: Compare and Contrast

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A public apology is a good way to express remorse and offer reconciliation to an affected party. But the very act of apologizing can be daunting.

If delivered effectively, an apology can mend relationships and restore trust between two or more parties.

If delivered effectively, an apology can help maintain company’s competitive advantage, reduce litigation costs and minimize business disruptions.

If delivered effectively, an apology can create a perception of genuine regret on behalf of the offender and mend his or her reputation.

But here is a question:

Can an effective delivery distract the audience from an insufficient apology?

And,

Can a weak delivery diminish a powerful message of a genuine apology?

I invite you to look at three recent apologies and share your opinion about the effectiveness of each apology is in terms of its message and its presentation.

Read more

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Swine Flu: What Companies Can Do

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Prize Pig by The Pug Father

“An informed and responsive public is essential to minimizing the health effects of a pandemic and the resulting consequences to society.” One principle of the HHS Pandemic Influenza Plan

Several years ago, when there was a large fear of avian flu, I spent a considerable amount of time researching past flu outbreaks, and what worked and what didn’t work for business preparedness planning and response.

Businesses and other large organizations (like non-profits and religious organizations) play an important part of the broader communication efforts both before and during a pandemic flu. The tricky balance for businesses (as well as governments, officials and other bodies) is in communicating important and helpful information while not unnecessarily alarming or panicking employees.

It’s important to note that we’re not currently at the pandemic flu phase with the swine flu situation. As of today, there are 64 confirmed cases of swine flu in the United States and hundreds of cases worldwide, the United States has declared a public health emergency, and the World Health Organization (WHO) has upgraded the pandemic alert level from phase 3 to phase 4. The phase 4 designation means that “the likelihood of a pandemic has increased, but not that a pandemic is inevitable.”

This is not the first time swine flu has affected human populations in the U.S. The 1978 book, “The Swine Flu Affair: Decision-Making on a Slippery Disease” is a review of the federal swine flu program from March 1976 to March 1977 by two Harvard professors, Richard E. Neustadt and Harvey V. Fineberg.

The 1970’s swine flu outbreak in the U.S. is believed to have started at Fort Dix, NJ. At Fort Dix, there was 1 death, 13 illnesses, and 500 people who caught but resisted the disease. The federal swine flu program launched in March 1976, and over 40 million Americans were inoculated.

(If you’re interested in the history of pandemics, the book “The Great Influenza” by John M. Barry is a fantastic account of the 1918 pandemic.)

Whether in response to swine flu, avian flu, or other potentially pandemic flu’s, there are some best practices that organizations can adopt to help employees.

General flu prevention and communication generally boils down to a “everything I need to know I learned in kindergarten” approach:
1.    Cover mouth + nose when coughing or sneezing (but avoid touching)
2.    Wash hands frequently for the length of time it takes to sing “Happy Birthday”
3.    Keep work area clean
4.    If sick, stay home
5.    Avoid close contact with sick people

Pandemic flu communication from businesses should include:
1.    Basic protection information for employees + their families
2.    Unique aspects + symptoms of swine flu (vs. other types of flu)
3.    Facts + misconceptions about vaccines
4.    Company policies about working from home, office leave, transportation, etc.
5.    Support services available and/or mental health resources
6.    Discussion about uncertainty

The best practices for pandemic flu communication for businesses:
1.    Coordinate communications internally
2.    Develop language and culture-appropriate materials
3.    Communicate uncertainty
4.    Plan for rumors and misinformation
5.    Coordinate with all stakeholders, including public health agencies if necessary
6.    Use correct information
7.    Stress universal hygiene behavior and show ways to minimize risk
8.    Use multiple channels to communicate
9.    Communicate a company response plan (if there is one, and if not, think about developing one)
10.  Explain HR policies

Companies should also be prepared for unexpected questions with uncertain answers. For example, some employees might wonder if their pets are at risk. It may seem silly, but pets are an integral part of many of our households (certainly in mine), and often feel like members of our families.

Social media is also playing a role in how people are learning about and sharing information on swine flu through Twitter, Google Maps and other channels. (There’s also some debate about whether social media is a contributing factor in spreading more panic.) Ogilvy’s London office has a “Swine Flu Dashboard” that shows the aggregated swine flu conversation across the social web.

Other Resources

There are many pandemic flu resources from governmental and health sources that may be helpful for businesses:

We’ll be covering this topic as it progresses. What else do you want to know about swine flu? What else should organizations keep in mind? Do you think social media is playing a role in amplifying fear?

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Domino’s Social Media Crisis

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Domino's Pizza by Nemo's great uncle

I’ve been a little reluctant to chime in on the Domino’s social media crisis this past week because of the sheer volume of coverage, but after a few conversations I wanted to post some thoughts here.

If you’re not aware, on Monday, April 13, two Domino’s employees at a Conover, NC restaurant filmed themselves doing “disgusting” things to food that, in the video, they claimed was going out to customers, and then posted the video on YouTube. (Read the New York Times summary here. The original YouTube video has been removed due to copyright claims by the female employee who filmed it, but as of this posting you can view it on this site.)

The video spread like wildfire, the two employees were identified, fired and arrested, and Domino’s has had to respond to the maelstrom.

Domino’s USA President, Patrick Doyle, issued an apology and response on YouTube on Wednesday, April 15, including a detailed outline of steps the company was and will be taking to make sure such a situation never happens again. The company has also been using a new Twitter account to listen, respond to concerns and thank people for their support (when appropriate). (As of 4/20, the company response video had been viewed 538,000+ times on YouTube.)

To review the timeline:

  • Monday, 4/13: Original YouTube video posted. Company spokesman notified in the evening.
  • Tuesday, 4/14: Employees fired. Rest of company learns about the video. Store closed and health officials visit.
  • Wednesday, 4/15: President posts apology on YouTube. Company launches @dpzinfo Twitter account. Original video viewed more than 1 million times on YouTube. Employees charged with felony crimes.

I’ve read a number of sides to this issue, both supporting and critizing the company’s response. Many have criticized the company for not responding soon enough, and in the New York Times article the spokesperson says that executives hoped “the controversy would die down” and so didn’t respond immediately. Some have criticized the president’s apology video as not effective enough, saying that he looks like he’s reading a script and that he doesn’t look into the camera.

But there’s the crux, isn’t it? On the one hand people get upset when a company doesn’t respond quickly, but on the other hand, they criticize the performance of the response when it does come.

In the choice between perfect performance and getting the response out relatively quickly, I think Domino’s made the right decision.

All in all, I think that Domino’s has done a pretty good job responding to this crisis. I give them kudos for:

  1. The apology. The Domino’s video apology does all of the things that my colleague Oxana Trush said makes an effective apology in her post last month: acknowledgement of wrongdoing, expression of genuine remorse, promise to not do it again, and restitution. To me it comes across as genuine, direct and personal, regardless of the performance.
  2. Going to the source. By posting the video on YouTube and (not just on their corporate website, for example), they respond in the channel where the conversation is happening. Ditto for Twitter. And they seem to be listening. Also, on a more technical note, they use the title of the original video in their response video, “Disgusting Dominos People – Domino’s Responds,” so that when people search for the original video the company’s official response will also appear in the search results. Very smart. I know this may be obvious to most social media folks, but for other people I think this is very counter-intuitive.
  3. Matching actions to words. The best apology in the world can’t rectify an underlying problem. The company appears to be acting in ways that demonstrate their recognition of the severity of the problem and what they can do to try to change it.

What could Domino’s have done better?

  1. Maybe they could have been a little faster in their first public communications response, but I think that, all in all, they did as best they could given the circumstances. They also were taking action behind the scenes to deal with the problem directly. From my experience working with large and sometimes decentralized companies (Domino’s is a franchise organization), large organizations are often simply not equipped to respond as quickly as the online world might want. That’s changing with time, but it doesn’t change overnight. Domino’s is not the only company learning from the past weeks’ events.
  2. Had a crisis plan in place. This is just supposition, of course, because perhaps they did have a plan in place. Also, there are always going to be situations that no plan could anticipate. However, from the outside, at least, it seems like this type of thing might have been something Domino’s could have anticipated. This exact thing? Probably not. But something like, “Employee malfeasance at a franchise location” would be a category I’d include in planning.

(And then it’s not just having the plan. It’s educating employees, coaching senior staff on how to deal with the media [even if the media is talking into a camera for a web video], establishing a presence on online communities and engaging with people before a crisis hits, etc.)

But just as we’re all figuring this social media stuff out, so are large corporations too. And best efforts – not just perfect efforts – should be recognized, especially during crisis situations.

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On Apology

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Photo by KiraKalina

“Forgiveness does not change the past, but it does enlarge the future.
” Paul Boese

A significant increase in public apologies over the past months could be seen as a positive trend.

We saw the most senior leader of this country apologizing to the American public: “I screwed up.” We watched two prominent athletes A-Rod and Michael Phelps issue painful apologies to their fans.

We saw four bosses of British banks saying sorry to the Treasury Select Committee, and watched Japan’s Finance Minister announce his resignation along with a formal mea culpa.

And finally, in the last couple of weeks we heard the words of regret from Rupert Murdoch and Bishop Richard Williamson.

And yet many of these highly visible apologies failed to earn public forgiveness. Some were criticized for being too shallow and insincere, others could be hardly recognized as apologies at all.

So, what does it take to make an effective apology that comes across as true and genuine? And what are some examples of ineffective apologies that failed to resolve conflicts or earn forgiveness?
Read more

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Crisis Management Spotlight: US Airways’ Hudson River Landing

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Leadership in a Crisis

A hearty salute to Captain Chesley B. Sullenberger, III, the US Airways pilot whose cool and decisive handling of a breaking crisis prevented a plane crash from becoming a tragedy.

Captain Sullenberger, a former US Air Force fighter pilot, a pilot union safety official, and a sometime plane crash investigator with the National Transportation Safety Board (NTSB), exhibited exceptional leadership skills when his Airbus 320 aircraft hit a flock of geese when taking off from LaGuardia airport yesterday afternoon.

The geese took out both of his plane’s engines at approximately 3,200 feet as the plane was making a left turn over the Bronx.  With no power in his engines, Captain Sullenberger had a choice to make, and very little time to make it. Read more

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That Was The Week That Was

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What a week for crises!

Forget about the financial melt-down, the transition to the new president, or any of the really old news.

Last week was one for the record books.

The curtain rose Monday, December 8, on the usual tired old economic meltdown crises, particularly  the prospect of an auto bailout (that still hasn’t happened).

Then things got curiouser and curiouser…

Not Available on E-Bay

Tuesday Illinois governor Rod R. Blagojevich was arrested for trying to sell his appointment of President Elect Barack Obama’s vacant senate seat to a high bidder.  He’s still governor (as of 3:30 PM Monday, December 15).

Read more

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