Lessons Learned from BP's Crisis Management
Kent Jarrell, APCO senior vice president and director of litigation communication
In early June Kent shared his views on the BP oil spill with TheStreet.com, a leading resource for financial news. He talked about what the company should do next and how it can still save both its reputation and its brand. Here are a few excerpts from the interview:
If BP came to APCO with this scenario, what would be your course of action?
Jarrell: There really are two phases of this crisis, the magnitude of which is so incredible. The first is getting your communications in order in the midst of an unfolding crisis where you don't know what's going to happen next... What they need to do is have a crisis-communication operation set up now, which is easier said than done...
The media has determined this is the story, so you're getting hundreds of demands from reporters instantly and you have to set up an infrastructure around that. The infrastructure has to be accurate up to the minute, because any time BP slips a bit, they're going to get criticized. During a BP news conference late last week, they said the operation was still continuing even when it was stopped the night before... If your information isn't holding up and isn't prompt and accurate, they don't trust you and that will very quickly move into the copy and turn that filter against you.
Secondarily, they ought to have a second communications group that is not working on the day-to-day crisis. What's happening now is that all the day-to-day people, every morning, wake up and put a fire hose in their mouth, and that fire hose whips them all over the place - which is the nature of the instant response. They also need a communications strategist to sit down and look at the next phase.
What is the next phase?
Jarrell: At some point, there will be a decrease in the crisis and some sort of engineering fix for the leak. They then have to have some long-term communications strategy to save the company's reputation. Right now, they're just trying to get the leak under control, but the second that happens, they're going to face years of investigations and litigation.
You want to slowly but surely remove the controversy of the investigations from the ongoing day-to-day operations of the company. If there's any chance for this company to survive independently, they have to have that in place...
Looking at the Exxon Valdez case, litigation was still going on in the Supreme Court just two years ago. How do you prepare for a fight that long?
Jarrell: If you look at BP's ads today, they've said a couple of things: We'll honor all legitimate claims and we'll continue to take full responsibility for the cleanup...
When BP says they're going to honor all legitimate claims, the question is about punitive damages. The litigation will become a full-time business for BP, and BP and the other parties are already hiring the best lawyers in the country because they realize this litigation will be important for a couple of reasons: because of the costs and what will be said about the company for years.
At each point of the process, the BP name will come roaring back into the headlines. One, two, three, four or five years from now, you're going to have that brought back as a current thought, which is devastating to a company's credibility. They've lost all credibility.
How do you save the brand in this situation?
Jarrell: They did a pretty good job after the Texas City refinery fire [which killed 15 people in 2005] by going green and bringing in a new CEO. The problem now is that this is a catastrophic event where the government stopped holding briefings with BP. The government is now an adverse party to BP.
One of the rules of crisis communications when you're in a situation like this is that you want the government standing next to you at every press conference. That's a very important path out of your crisis. That is now gone, and the Obama administration will certainly throw BP under the bus if they deem that they have to, and that's going to happen for a long time.
...That's why you not only have to have your communications people tied into what's happening, but you have to have them tied in to the lawyers as well. You're trying to be accurate and do things that will put some sort of protection around the company's reputation.
Can BP mitigate the damage at this point?
Jarrell: This is an engineering problem of unprecedented magnitude and they've got to get it stopped … You have the cable networks talking about the number of days and you have live footage of the spewing.
They're going to have to have a marker event. If it goes until August, they can't sit there until August and do nothing. They're going to have to change management, they're going to have to bring in outsiders, they're going to have to do something to change the equation. If they can't stop the leak, they have to do something that will at least cause people to give them the benefit of the doubt over time. In the world I live in, the minute that you lose that benefit of the doubt, all you're going to do is get whipsawed.
Visit TheStreet.com to read the full interview with APCO's Kent Jarrell.