Crisis management

Introduction
When an organization is in a crisis, it dominates the organization’s agenda and requires immediate action. The way the organization responds to a crisis can differ in many ways. In this essay I would like to discuss the crisis of the British concern British Petroleum (BP). At first I would like to provide more information about the crisis and its consequences, then I will identify the kind of crisis we have to deal with, I will discuss the several communication strategies BP have used, I will explain the different reactions of the public on the crisis. At last, I will give the oil concern some advice, in case a reoccurrence takes place.

The BP oil spill
The BP oil spill was a big natural disaster in the Gulf of Mexico on the 20th of April 2010. The spill was caused by an explosion of the platform Deepwater Horizon leased by BP. 11 people were killed and 17 people were injured. During the effort to extinguish the fire, the platform sank. The drill rod broke and leaked oil. For almost three months the oil leaked into the Gulf of Mexico. The situation was very threatening and President Obama proclaimed the oil spill to be a national disaster. In the beginning the run-off was calculated at 800.000 liters of oil a day. The amount of oil slipping away just became more and more, until 3 million liters a day was spilled into the ocean. Scientists speak of the worst oil spill in the history of the United States. After 5 months of searching for a solution for the oil spill, BP announced on the 20th of September that the leak was permanently stopped. The whole operation had cost 9,5 billion dollars. The total amount of spilled oil is equal to 4 million oil tanks. Effects

A lot of animals who lived in the surface area in the Gulf of Mexico were besmeared with oil. According to the National Oceanic and Atmospheric Administration (NOAA), 155 dolphins and little whales were found dead, and 141 endangered turtles were washed up on the coast. The fisheries in the affected areas were shut down. Florida’s and Cuba’s coral reefs were both threatened, and Florida Keys’ coral reefs are well known for its flora and fauna. In the future, even more damage can be expected in the ecosystems, due to chemicals used in the attempts to stop the holes. Due to the risk of fire, the production at two platforms was shut down. On Wednesday the 16th of June the first sums of compensation were determined. BP has to pay 15 billion dollars to the emergency fund. On the 27th of July 2010, BP announced that their former CEO Tony Hayward would be replaced by Bob Dudley.

Identification of the crisis

To identify the type of crisis we use the Crisis Type Matrix of crisis expert Timothy Coombs. He defines four types of crises based on two dimensions:
Internal-external: did the oil spill result from something done by the BP itself? Or was it caused by some person or group outside of BP?

Intentional-unintentional: Was the crisis committed deliberately by some party or not?

The two dimensions together give four crisis types, illustrated in the Crisis type matrix:

Unintentional
Intentional

External

Faux pas

Terrorism

Internal

Accidents

Transgressions

The American government has investigated the disaster with BOEMRE (The Bureau of Ocean Energy Management, Regulation and Enforcement). Their report on the crisis determined that BP is responsible for and culpable to the crisis. This makes the disaster internally caused. The crisis was not committed deliberately by BP, so the crisis is unintentional. According to the Crisis type matrix we can conclude that the oil spill in the Gulf of Mexico was an accident. Accidents can be further divided into acts of nature and human-induced errors.

The BP oil spill clearly was an accident caused by a human mistake, and therefore can be labeled a human-induced error.

Communication strategy
BP used different kinds of communication strategies. I will illustrate the different strategies with examples below. On top of the problems caused by the leakage in the Gulf of Mexico, the crisis communication of BP was also terrible. BP made mistake after mistake and it seems like Tony Hayward did not attend any media training. It is almost impossible to deny that a lot of things went wrong in the communication concerning the explosion of the platform and the following oil spill of the British oil concern BP. In the first instance, BP denied there was oil leaking out of the oil well. After that BP trivialized the consequences of the ecocatastrophe. Even the CEO Tony Hayward made some dull statements. What did BP do wrong? BP made a big mistake right after the explosion. They were not open and honest about the situation. First they denied the oil spill.

When it became clear that there was definitely an oil spill, BP denied there would be any consequences for the environment and trivialized the situation later on. “The Gulf of Mexico is a very big ocean. The amount of volume of oil and dispersant we are putting into it is tiny in relation to the total water volume” said top executive Hayward, while scientists, biologists and satellite images proved the opposite. The photo shopped images of the crisis did little good for the oil concern. In the first weeks of the crisis BP used two “Nonexistence strategies”. BP used the “denial strategy” which means that they gave a simple statement denying that the crisis existed.

After the denial strategy BP used the “clarification strategy”. This strategy was an extension of the denial tactic with attempts to explain why there was no crisis. BP also used a “distance strategy” called “Downplay”. This is a tactic of convincing stakeholders or the general public that the situation is not that bad in itself or compared to other crises. The “Association strategy” was also used, named “Bolstering”. This is a tactic of reminding stakeholders and the general public of the existing positive aspects of BP, in order to offset the negatives aspects the oil crisis brought to BP. BP should have seen that the display of empathy is a very important factor in crisis communication. While thousands hectares of natural area were besmeared with oil, fishermen lost their jobs and the animals who lived in the Gulf of Mexico had no place to live, BP only thought about itself. In front of all the cameras, Hayward went a day out sailing. When a journalist asked Hayward what he would like to say to the victims of the oil spill, the top executive just thought about himself. He answered: “There’s no one who wants this thing over more than I do, I’d like my life back.”

Did BP do everything wrong? According to the media and the analysis of the American government, they did do everything wrong, although, BP did do some things right. The way in which they communicated can be doubtful, but they did communicate updates to the public regularly. Hayward gave press conferences on a daily basis about the struggles surrounding the oil leak. BP launched a website with information about the oil leak and was an active user of social media. After a few months BP used a few “Acceptance strategies”. The “Full apology strategy” is a tactic of simply apologizing for the crisis and accepting the blame. On the 8th of March the new CEO Robert Dudley apologized for the worst offshore spill in the history of the U.S.A. After this strategy they used the “Remediation strategy”. This is a tactic of announcing some form of compensation or help to victims. BP made 20 billion dollars available to compensate the victims of the spill. Especially fishermen demanded compensation because they lost a lot of revenue. To clarify the different strategies BP used, I list them chronologically.

Nonexistence strategies:
Denial
Clarification

Distance strategies:
Downplay

Association strategies:
Bolstering

Acceptance strategy:
Full apology
Remediation

Reactions of the public
The American public reacted angrily to the BP oil spill in the Gulf of Mexico in 2010. The American public blames the concern British Petroleum (BP) for the disaster that polluted their country. According to the American public, BP did not stick to the regulations of security, did not use the best drilling techniques, and BP did not overlook the well in a consistent way. Briefly worded, according to the American population, the British concern BP made too many mistakes. The concern BP is one of the largest and most influential companies in Britain. After the oil spill in 2010 the share price of BP decreased extremely. Several analysts predicted that the brand BP would not survive this crisis. As you may understand, this scenario is a disaster for the British economy. This has caused jittery amongst the British public. Lots of British people think that the United States has scapegoated BP and has blamed BP for the crisis. Several British newspapers wrote about this, including the Daily Telegraph. The newspaper heading was as followed: “Obama’s boat on the throat of British Pensioners”.

They see the comments on BP as a personal offence, and see the comments as oversimplified and extremely nationalistic. A conservative politician, namely Lord Tebbit, defined the US with reference to BP as a “crude, bigoted, xenophobic display of partisan, political, presidential petulance against a multinational company”. Prime Minister Cameron did not speak out against the US. He tried to maintain the special relationship between the UK and the US. The difference in reaction between the two continents is clearly understandable, plainly because the two countries have different interests. The American public blames the British concern for polluting their coasts and threatening the health of animals in their country. The British public is afraid of the consequences of the crisis for their country, and therefore for themselves.

Advice for a similar crisis
I have discussed the communication strategies used by BP concerning the oil spill in the Gulf of Mexico in 2010. The outcome was that BP could have dealt with the crisis in a better way. My advice to BP is to develop a contingency plan for crises and establish key responsibilities for practitioners before a crisis actually happens. The most important factor of the contingency plan for BP would, in my opinion, be the media training of the CEO, executive directors and the key spokesperson. After the oil spill in the US, a lot of media mentioned the risks in other seas. What if a similar crisis occurs in the North Sea? Let us hope it will never happen, but as we have learned from BP, accidents can easily happen. If such an oil spill occurs in the North Sea, I would like to advise the oil concern to react in a timely, adequate and responsible way. It is very important to be open and honest about the crisis, the situation in general, and the consequences. If you do not inform the media in a proper way, they will find their information somewhere else. And if that happens, you cannot control the information flow. It is very understandable that a company tries to save its reputation, but the way the company tries to do that is very important.

Do not spread distorted information about the crisis and always be honest about what is happening. Information based on a lie will eventually come. It is very important to display empathy to the victims of the crisis and apologize for the consequences. A company can do this with the “Full apology strategy”. Besides, it is important for a company to offer remuneration to the victims. This can be in the form of goods or can be money, to compensate for the damage. This can be done with the “Remediation strategy”. When the company has apologized for the crisis and the remuneration has been offered, the company can asks the stakeholders and the general public to forgive its misdeeds. The last thing a company should do to minimize the damage of their reputation is by taking a corrective action to prevent the reoccurrence of the crisis in the future. This is called the “Rectification strategy”. In conclusion, I would like to advice BP to redevelop their crisis communication strategies.