Our above headline comes courtesy of the indispensable online news source @BuzzEdition and provides us with a great lesson in personal risk management — and one that Sea World may want to consider.
It’s not exactly breaking news since the story happened in 1984 (the year … not the novel), but the gist is that a middle-aged man went to his doctor complaining of eye pain. After a few exams, the doc determined that he had a mite under his eyelid.
Ok, weird, but not that weird, right? Wrong. Orthohalarachne attenuata is a species of mite that normally is found in the nasal passages of fur seals, sea lions, and walruses. In seals, the mites can be both prevalent (as in almost every single seal has them) and abundant (as in more than 1000 mites per seal and in a few cases in one study, more than 2000!).
Thus, don’t get sneezed on by a walrus. Or a seal. And if you run SeaWorld — or any other establishment where seals and walruses intermingle with human, don’t let your seals and walruses sneeze on people.
Two major, damning reports have surfaced in the past 24 hours that may make it impossible for BP’s reputation to ever recover. The spill itself was a major hurdle, but now we are seeing documents that “portray a company that systemically ignored its own safety policies” as well as first-hand accounts from Deepwater Horizon explosion survivors that company decision makers on the oil rig may have prioritized revenue over safety.
Here’s more from the CNN story on the workers’ comments:
The BP official wanted workers to replace heavy mud, used to keep the well’s pressure down, with lighter seawater to help speed a process that was costing an estimated $750,000 a day and was already running five weeks late, rig survivors told CNN.
BP won the argument, said Doug Brown, the rig’s chief mechanic. “He basically said, ‘Well, this is how it’s gonna be.’ ”
“That’s what the big argument was about,” added Daniel Barron III.
Shortly after the exchange, chief driller Dewey Revette expressed concern and opposition too, the workers said, and on the drilling floor, they chatted among themselves.
“I don’t ever remember doing this,” they said, according to Barron.
“I think that’s why Dewey was so reluctant to try to do it,” Barron said, “because he didn’t feel it was the right way to have things done.”
Revette was among the 11 workers killed when the rig exploded that night.
In the CNN interviews, the workers described a corporate culture of cutting staff and ignoring warning signs ahead of the blast. They said BP routinely cut corners and pushed ahead despite concerns about safety.
The rig survivors also said it was always understood that you could get fired if you raised safety concerns that might delay drilling. Some co-workers had been fired for speaking out, they said.
On top of these first-hand accounts comes a joint report from ProPublica and the Washington Post that shows that these issues were not just occurring on the Deepwater Horizon. Similar safety concerns have existed throughout many BP operations over the past decade.
A series of internal investigations over the past decade warned senior BP managers that the company repeatedly disregarded safety and environmental rules and risked a serious accident if it did not change its ways.
The confidential inquiries, which have not previously been made public, focused on a rash of problems at BP’s Alaska oil-drilling unit that undermined the company’s publicly proclaimed commitment to safe operations. They described instances in which management flouted safety by neglecting aging equipment, pressured or harassed employees not to report problems, and cut short or delayed inspections in order to reduce production costs. Executives were not held accountable for the failures, and some were promoted despite them.
Similar themes about BP operations elsewhere were sounded in interviews with former employees, in lawsuits and little-noticed state inquiries, and in e-mails obtained by ProPublica. Taken together, these documents portray a company that systemically ignored its own safety policies across its North American operations — from Alaska to the Gulf of Mexico to California and Texas.
The report gives a year-by-year breakdown of all the transgressions, but even to an untrained-to-the industry eye, the evidence seems overwhelming to suggest that their has been a legacy of ignoring safety — both for workers and the environment.
ProPublica sees it the same way.
It is difficult to compare safety records among companies in industries like oil exploration. Some companies drill in harsher environments. And bad luck can play a role. But independent experts say the pervasiveness of BP’s problems, in multiple locales and different types of facilities, is striking.
“They are a recurring environmental criminal and they do not follow U.S. health safety and environmental policy,” said Jeanne Pascal, a former EPA debarment attorney who led the investigations into BP. “At what point are we going to say we are not going to do business with you any more, bye? None of the other supermajors have an environmental criminal record like they do.”
Add all this up and the worst-case fears for BP offered this morning by the New York Times don’t seem so preposterous.
It seems unthinkable, even now, that the disastrous oil spill in the Gulf of Mexico could bring down the mighty BP. But investment bankers get paid to think the unthinkable — and that is just what they are doing.
The idea that BP might one day file for bankruptcy, particularly as part of a merger that would enable it to cordon off its liabilities from the spill, is starting to percolate on Wall Street. Bankers and lawyers are already sizing up potential deals (and counting their potential fees).
It seems unthinkable, even now, that the disastrous oil spill in the Gulf of Mexico could bring down the mighty BP. But investment bankers get paid to think the unthinkable — and that is just what they are doing.
The idea that BP might one day file for bankruptcy, particularly as part of a merger that would enable it to cordon off its liabilities from the spill, is starting to percolate on Wall Street. Bankers and lawyers are already sizing up potential deals (and counting their potential fees).
And even if bankruptcy and takeover is overstated the oil conglomerate’s fate, there are certainly those that agree that the company’s reputation will never recover.
There are many people — besides BP — who think even discussing the possibility of a bankruptcy or takeover is silly. But looking out a few years, that may be BP’s best, last hope.
“Even with a prepackaged bankruptcy, BP’s brand is permanently tainted,” said Robert Bryce, a senior fellow at the Manhattan Institute and author of “Power Hungry: The Myths of ‘Green’ Energy and the Real Fuels of the Future.” Yes, BP is financially sound now. It is unlikely to go bust near term, he said.
“Instead, BP will spend the coming decades circling the drain, mired in endless litigation, its reputation irreparably damaged, and its finances weakened,” Mr. Bryce said.
That, if you believe the bankers, is the optimistic outcome.
Add it all together and, sure, just going bankrupt starts to sound like an even more and more optimistic outcome by the day. For other BP execs who are culpable in what is now likely to be the worst environment disaster in U.S. history, efforts to sidestep reputation damage may eventually pale in comparison to efforts sidestep jail.
For several years now, reputation risk has been among the top threats listed by company executives when they are asked what keeps them up at night. There are several reasons for this. The emergence of 24-hour news, the internet and social media have created a world where corporate snafus that would have been merely a one-day story in the paper into an ongoing PR nightmare. Similarly, advocacy groups are now much more evolved and can launch coordinated campaigns to encourage public outrage. But most of all, most companies simply have no idea how to repair their image after it’s tarnished.
There is no insurance that can fix the problem and even where coverage is available to fund a “PR swat team” to come to the rescue, the short-term damage is already done, and the brand will always be tied to the negative press. In the long term, the reputation smear may prove survivable, but it sure never seems that way in the initial hours, days, weeks and sometimes even months and years following the calamity.
In recent years, the most oft-repeated mantra for avoiding irreparable harm to the brand is to “get out in front of the story.” Basically, after a mishap occurs, be honest, transparent and don’t let your CEO wake up to be blind-sided with an unwanted Wall Street Journal headline. Tell the public that something went wrong and that you’re now doing everything in your power to fix the situation.
That certainly makes sense, and recent examples of companies who were criticized for their delayed response include Toyota, Massey Energy and BP. The fact that all three companies seemed to bury their heads in the sand — for years — when it came to safety issues still would have come out, but the instant backlash perhaps could have been different if the companies took charge of the situation sooner — at least with Toyota anyway.
I’m not sure there is anything BP could have done differently in the first week or two that would have made people feel much differently about the oil giant than they do today.
But, in trying to be honest and transparent, should the company’s executives go so far as to say “I was wrong” and “I’m sorry”?
Logic says yes.
As journalist and author Kathryn Shultz pointed out today in a guest post on the New York Times‘ Freakonomics blog, however, those who have admitted the error of their ways have not always been greeted with forgiveness.
Quite the opposite, in fact.
Earlier this year, former Assistant Education Secretary Diane Ravitch published The Death and Life of the Great American School System, which denounced a series of school reforms (including educational testing, school choice, charter schools, and No Child Left Behind) that she herself had advocated for years. When I interviewed Ravitch for Slate, the comments section lit up with the familiar charges: “Why is Diane Ravitch Making a Bundle Saying She Was Wrong All Along?” “Wow! Thanks Diane! It’s only taken you ten years to see the blindingly obvious.” “We’re supposed to be impressed by her contrition?”
And that is the central question: what are we supposed to do about the sincere contrition of those who err?
Schultz, who just wrote a whole book on the topic that looks interesting but I have yet to read called Being Wrong, says that the answer is a lot easier in our personal lives than it is in the public sphere. In our private lives — with relatives, friends or colleagues — the answer is usually forgiveness. People make mistakes and, often, when they are willing to admit and own up to their errors, they should be granted at least some level of reprieve.
But that courtesy is rarely extended to public officials (which is who she is really speaking about here) or corporate representatives (which is who I believe this concept may also apply to)/
When our public officials make mistakes, the costs (which are often not borne directly by them) can be horrifying.
It seems reasonable to demand not just an acknowledgment of error but some effort at ameliorating the consequences.
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Sometimes, though, this is simply impossible. No one can bring back the war dead; no one can unspill the oil; no one can compensate a child for twelve years of bad schooling. All that truly contrite leaders can do in such a situation is work off their public debt the best way they know how – and live with the torments of their own conscience.
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But are those torments real? Many people doubt it, and therefore find the idea of forgiveness galling. As one commenter observed after listening to a conversation about wrongness over at The Takeaway, “A lot of people’s admitting to being wrong is little more than a PR ploy. Public apologies do not impress me.
” In the acid bath of cynicism that is contemporary American politics, it is all but impossible for public figures to convincingly establish their sincerity. And fair enough: sometimes, political changes of mind really are craven or self-interested or simply for show. But sometimes, presumably, they are not.
When our public officials make mistakes, the costs (which are often not borne directly by them) can be horrifying. It seems reasonable to demand not just an acknowledgment of error but some effort at ameliorating the consequences. Sometimes, though, this is simply impossible. No one can bring back the war dead; no one can unspill the oil; no one can compensate a child for twelve years of bad schooling. All that truly contrite leaders can do in such a situation is work off their public debt the best way they know how – and live with the torments of their own conscience.
But are those torments real? Many people doubt it, and therefore find the idea of forgiveness galling. As one commenter observed after listening to a conversation about wrongness over at The Takeaway, “A lot of people’s admitting to being wrong is little more than a PR ploy. Public apologies do not impress me.” In the acid bath of cynicism that is contemporary American politics, it is all but impossible for public figures to convincingly establish their sincerity. And fair enough: sometimes, political changes of mind really are craven or self-interested or simply for show. But sometimes, presumably, they are not.
Ultimately, her short post doesn’t offer any concrete solutions. It certainly does present a good amount of evidence that, publicly, forgiveness — especially when the act leads to death or major destruction — is tough to come by. Former Secretary of Defense Robert McNamara is cited as a prime example.
Regardless, I have to believe that, in this day and age, corporate honesty and admission of guilt will better resonate with the public than anything else. But the alternative perspectives raised here sure do lead us to one indisputable conclusion: executives are right to be concerned with reputation risk.
With all the devastation and heartache following tornadoes and flooding throughout the South, many people are looking for something to lift their spirits. Two Tennessee men recently decided to get a little leisure time in by doing some waterskiing. In a flooded parking lot. Which is frowned upon.
While providing great entertainment for the crowd of onlookers, the two police officers in attendance were none-too-thrilled with the apparently illegal activity, which led to the arrests of both skier and skipper driver. Of course someone was there to YouTube it, and you have to at least applaud the two for their ingenuity.
Fortunately for all, the police did not react like the security force at a recent Phillies game, as the mixture of Tasers and water is probably not ideal for non-lethal force. Remember: Don’t try this at home, especially if the roads by your home are not covered with a foot of water.
