Tag Archives: BP

Letter from America: Bonuses, Bungs and Brand

What common factor do Barclays, WPP, BP, RBS, NewsCorp and Costa Crosiere share?  As in my Market Leader magazine article (June 2012), they’re all under the spotlight by US shareholders for brand damage as a result of misjudged bonuses, ethics or operational bungles which has lost them the trust they invested so heavily to earn.  Read the full article here below…

Two leading British banks, Barclays and RBS, each awarded significant payouts to their executives despite calls not to by American institutional investors.  Both Bob Diamond at Barclays and Fred Goodwin, formerly of RBS Citizens, had significant US operations under their purview yet seemed deaf to the costs to their brands in one of the world’s largest financial services markets.  The Occupy Wall Street movement, which triggered copycat sit-ins in London and other leading financial centres, should have sent signals that this new form of grass roots consumer activism is not just temporary grit in the oyster but a more permanent reflection of the assertion by American consumers of their right to choose listening brands.

American owners of WPP stock are now less enamoured with the business’s remuneration committee proposal that Sir Martin Sorrell enjoy a 500% of salary maximum bonus payout from only 300% in times of austerity for its American clients and consumers.

Others with European operations affecting their American operation is News Corporation, whose leaders Rupert and James Murdoch have appeared before Parliament and a Government-backed enquiry.  During this time, NewsCorp’s headquarters offices in New York City has enjoyed 24/7 protesters in front of its doors while the company aims to explain to American institutional investors and customers its ethical standards and allegations of phone hacking and police bribery in Britain.

Then of course there’s the Costa Concordia cruise disaster whose European executives infrequently explained the vessel’s sinking off the Italian coast, owned by the world’s largest cruise line, American brand Carnival (ironically named given the circus surrounding its media management).

And we all know the story of Mr. Hayward wanting his life back 2 years ago while Gulf coast shrimpers wondered when their livelihoods would return too.

What all share is the significant loss of trust from its American investors and customers as a result of not understanding the context, culture and communications needed to save their sinking reputations.  According to the Edelman Trust Barometer 2012, an annual study from this PR firm examining levels of trust in companies and industries by geographic market, there’s a lot of ground to make up by these European companies there.  When asked “how much do you trust business to do what is right?” only 50% of the American respondents gave their trust.

So what are the implications on Europe-based Messrs. Murdoch, Diamond, Sorrell, Hester, Hayward and Foschi to regain trust from US consumers and shareholders?

— communicate the “how” – have your leaders volunteer information about how decisions are made, the rationales which incorporate the views and values of those constituencies, assuming you’ve tested those rationales first to find the connections (if there aren’t any, you’d better find some);

— identify the “who” – fielding top executives to rebuild trust is a must for customers, staff, investors, media and all the other stakeholders.  First though, make sure these leaders have the agility and cultural awareness to deliver their messages the American way (we want emotion, hand-wringing, even tears rather than stoic Anglo-Saxon methods);

— show us the “what” – demonstrate action which plays to Americans’ preference for “ready/fire/aim” approaches rather than fence-sitting deliberation.  Show your plan for regaining their trust, what contingency plans you’ve put in place, how you’ll implement the plan, how you will engage them;

— be clear about the “where” – decide which online and offline media you will use to keep these US publics informed about and aligned with your plan of activities.  Which of your ecosystem partners are included in your communication? Which have credibility in the US that add to your message, and which detract?

While American trust is no different that British, Italian, French or Japanese trust, how you go about rebuilding it does depend on understanding the place.  Doing your homework on what works well there does pay huge dividends as many international brands in the US have learned the hard way.

BP Oil Spill Coverup: Fishermen Speak Up

Was the BP CEO shuffle a waste of time? Current reports don’t look promising – read Rick Outzen’s report:

While officials claim most of the oil from America’s worst-ever spill has disappeared, fishermen hired by BP are still finding tar balls—and being instructed to hide their discoveries.

Two weeks ago, as federal officials prepared to declare that some three-quarters of the estimated 5 million barrels of oil released into the Gulf over three months had disappeared, Mark Williams, a fishing boat captain hired by BP to help with the spill cleanup, encountered tar balls as large as three inches wide floating off the Florida coast.

Reporting his findings to his supervisor, a private consulting company hired by BP, the reply, according to his logbook came back: “Told—no reporting of oil or tar balls anymore. Don’t put on report. We’re here for boom removal only,” referring to the miles of yellow and orange containment barriers placed throughout the Gulf.

Williams’ logbook account, which I inspected, and a similar account told to me by a boat captain in Mississippi, raises serious concerns about whether the toll from the spill is being accurately measured. Many institutions have an interest in minimizing accounts of the damage inflicted. The federal and local governments, under withering criticism all summer, certainly want to move on to other subjects. BP, of course, has a financial incentive.

The miraculous disappearance of the oil and the pending transfer of $20 billion to Ken Feinberg, who is independently overseeing the claims fund, have resulted in the oil giant cutting back its response operations. With a recent halving of the Vessels of Opportunity program, which hired fallow charter and commercial fishing boats, captains and deckhands are now less reticent to describe their experiences.

This includes Mark Williams, who worked in the program until he was deactivated last week. Williams’ saga is typical. In May, he arrived in Alabama from Atlantic Beach, Florida, to captain a charter boat. He got one day of red snapper season before Roy Crabtree, NOAA Fisheries Southeast regional administrator, shut down the Alabama waters for fishing.

For the rest of June and much of July, Williams worked off and on as a deckhand on boats enlisted in the Vessels of Opportunity program, including a boat called Downtime that in early June first sighted tar balls and oil sheen in the Pensacola Pass.

Williams was also part of the skimming operations at Orange Beach when miles-long mattes of oil washed on to its shores the following weekend. Untrained, Williams remembers putting more than 100 pounds of oil-soaked absorbent boom in debris disposal bags that he was later told should have held no more than 20.

Subsequently, Williams saw seven large shrimp boats, with two Coast Guard vessels accompanying them, five miles off shore. “Plumes were everywhere,” says Williams, referring to thin layers of crude oil floating on the water’s surface. “Every time another boat would approach the shrimp boats, the Coast Guard would get on the radio and tell the boat to veer back to shore.” Williams says he believes the boats were putting dispersant on the oil, even though the Coast Guard has denied using dispersant off the Florida and Alabama shores. “The plumes were gone the next day,” Williams says.

Back in Florida on July 27, his boat, Mudbug, was activated into Vessels of Opportunity. While the media, BP, and the Coast Guard were reporting no more oil, Williams and other boat captains were assigned to find it.

Three days later, Williams found remnants of dispersant in a canal in Santa Rosa Sound north of Pensacola Beach. He reported it to his supervisor, who worked for a company that BP hired to help with cleanup, O’Brien’s Response Management.

Williams wrote in his logbook, “Returned p.m. for check-out. [Supervisor] said, ‘Oh, they sent someone out there and it was algae’—No ****ing way—Idiots.”

O’Brien’s was founded in 1982 by Jim O’Brien, a retired Coast Guard officer, who originally called his firm O’Brien Oil Pollution Service, ironically known in the industry as “OOPS.” Over the years the company has been acquired and merged with other response companies; it was hired by BP and Transocean prior to the April 20 explosion of the Deepwater Horizon rig as an emergency-response consultant.

On Saturday, July 31, Williams found a “tea-type” stain on the water and followed it toward Fort Pickens, which is the western tip of Pensacola Beach. He wrote in his logbook, “We found massive tar balls—both in quantity and size, in small gulley. They ranged from ping-pong ball to coconut in size not 3′ from beach line.”

After that, Williams was taken off spill and tar ball watch and put on boom removal. In an inlet north of Pensacola Beach, his crew sighted more tar balls. He wrote in his logbook: “Middle of Sound to off-load boom. 1″ to 3″ tar balls—floating—must be old—told [supervisor] at end of the day.” That’s when he was told not to make the report, but rather to simply gather up the boom.

“We found massive tar balls–both in quantity and size, in small gulley.”

Williams was deactivated from Vessels of Opportunity last week. Last Tuesday, the day before he was dropped, the boat captain wrote, “Coming back p.m. from Ono Island. Counted 12 oil plumes small in comparison to offshore between range marker and decon barge.” This was a week after Carol Browner, a top energy adviser to President Barack Obama, announced 75 percent of the oil had been contained, evaporated, or dispersed.

Williams never believed the reports that the oil had disappeared. “It’s out there and we will see it continue to wash up on our beaches,” he says.

The Daily Beast received a similar account from the Mississippi Gulf Coast, where commercial fisherman Mike Stewart of Ocean Springs has tried to get state officials to recognize that oil and dispersants remain in the waters off their shores.

Since the first of August, Mississippi fishermen have found oil in the marshes of their barrier islands, seen massive fish kills and scooped up submerged oil in Pass Christian. Nonetheless, Bill Walker, director of the Mississippi Department of Marine Resources, declared on August 9, “there should be no new threats,” and issued an order for all local coastal governments to halt oil disaster work being funded by BP money that was granted to the state.

Walker challenged anyone to prove there was still oil in Mississippi waters by calling his office. As of Friday, August 13, Walker told media that he had not received any phone calls.

“That’s a bunch of bull,” says Mark Stewart in telephone interview with The Daily Beast. “There is oil all through the water column. We’ve proved it, and they do nothing about it.”

Stewart even has a video on YouTube showing his crew dipping an absorbent cloth into the Gulf water three-quarters of a mile off the Mississippi beaches. When it’s pulled out of the water after less than two minutes, the cloth is covered with oil. There is so much oil on the surface that it reflects sunlight like a mirror. There, too, the commercial fishermen are concerned about the dispersants.

“They say the oil is gone,” Stewart said on the video. “We disagree.”

Stewart, a third-generation fisherman, was in Vessels of Opportunity for 70 days before being laid off August 2. He tells The Daily Beast part of his time in the program was play-acting for visiting dignitaries. “Whenever a government official would be flying over our boat, we were told to put out all our boom and start skimming for show, even when there wasn’t any oil.”

The Daily Beast asked BP officials about the shrinking number of vessels involved in Gulf cleanup. BP spokesman John Curry says: “We have no certain number of vessels for the program. It will be adjusted based on the need. Less oil means less resources are needed.”

When asked about Williams’ claims that he had been instructed by O’Brien’s supervisor not to report oil, Curry said, “I am not aware of it. We will work as long as the work needs to be done. You will need to check with the contractor about this specific claim.”

The Daily Beast did contact Tim O’Leary, O’Brien’s vice president of communication services, and relayed Williams’ account. O’Leary says that he is unaware of any issues near Pensacola, but agreed to check further. The Daily Beast gave him until the end of the day for a deadline—O’Leary subsequently left a message that he needed more time to respond. O’Leary’s response was: “We have checked with our on-scene supervisor regarding this allegation. He denies that any such order was given to Vessels of Opportunity participants.”

Correction: This article initially reported 5 billion gallons of oil were released in the Gulf; it has been updated to 5 million barrels.

Rick Outzen is publisher and editor of Independent News, the alternative newsweekly for Northwest Florida.

For American Eyes Only: “Making It Right” BP’s TV Ads

Why isn’t BP showing these US television ads in the UK and other EU countries where their image has also been badly eroded?

This one ad has had 847,091 views to date:  via YouTube – MuseOfMarketing’s Channel.

FT Judgment Call: Can too strong a national identity harm the business?

FT Judgment Call: Can too strong a national identity harm the business?

The problem

BP’s difficulties in the Gulf of Mexico seem to have been exacerbated by a perception that the business is overwhelmingly British. US critics have been irritated by the lack of an American voice at the top of the company. Should businesses try harder to include a wider array of nationalities in senior posts? Or is the call for greater diversity simply a politically correct management fad?

The consultant:  Allyson Stewart-Allen

Promoting your country of origin and heritage is the right thing to do when the country has high credibility in your sector internationally. For
example, promoting “Made in France” for a perfume brand makes sense. Any company doing business internationally must ensure the voices of those diverse markets hit the boardroom, not just because it is politically correct but because research shows diversity results in better decisions and risk management. Ideally, those voices should reflect the countries and business cultures in direct proportion to the level of revenue represented by those markets. A systematic process goes a long way to build and sustain brand value – and we know Americans speak the language of brands fluently.

The writer is director of International Marketing Online, a consultancy

The brand guru Wally Olins

The kind of rhetoric used against BP is politically motivated and intended to deflect anger that might otherwise be used against the US government towards “foreigners” – in this case, snooty Brits. But this won’t last long. Usually the country-of-origin effect is helpful. Mercedes thrives on German “characteristics” – efficiency, reliability. And L’Oréal was run by an Englishman for years – presumably “because he was worth it”. But national identity can cause problems. Toyota’s recent performance has had a knock-on effect for other Japanese companies. This episode shows you need people at, or near, the top of the business who can speak the language and use the style of the countries in which they operate.  It seems that Tony Hayward, with all his understated English charm, can’t.

The writer is chairman of Saffron Brand Consultants

The director Miles Templeman

In today’s business climate, a truly international company must take care to position itself as being internationally representative. Being viewed as just a
national company could inhibit growth in overseas markets. Multinationals need to be seen to be representative of each country in which they operate, with a strong local voice.  Of course, global companies have a national origin, but a purely national identity is not sufficient. BP may not have carried out a great piece of positioning over recent weeks, but it does have a transparently global position – 40 per cent of its shareholders are in the US, for
example – and that global positioning is vital to business success.

The writer is director-general of the UK’s Institute of Directors

Edited by Stefan Stern
Copyright The Financial Times Limited 2010.

Common Sense: BP’s Stock Rebound Means It’s Time to Sell – WSJ.com

Worth reading if you’re holding BP stock – when I scanned this article quickly I read, “BP’s stock rebound means it’s time to Shell” – maybe not such a bad idea!

via Common Sense: BP’s Stock Rebound Means It’s Time to Sell – WSJ.com.

“What can BP’s new CEO Bob Dudley do to restore the brand?”

I was interviewed by Al Jazeera about BP’s newAmerican CEO,  Bob Dudley.  When asked if it’s ‘too late’ I replied, “Better late than never – though it’s unfortunate on many fronts that BP didn’t appreciate the interest and diversity of stakeholders back in April…”

Click the link below to watch and tell me what you think!

via International Marketing Partners TV Interviews.

My CNN “Connect the World” Interview Highlights on BP’s Uphill Battle to Restore Its Credibility:

BECKY ANDERSON: … At the end of the day, if you were crisis managing for this company and and helping them decide where they go next worldwide and looking at their public image at this point what would your advice be?

ALLYSON STEWART-ALLEN: Firstly, always put forward a local voice. If you’re ever in a crisis again, God forbid, always put forward someone who understands the local landscape and has that local cultural understanding, number one.  Number two, be transparent. You know, why wasn’t the public invited to look at some of the designs for some of these fixes and get the best brains in the United States and around the world who could look at them and say, actually, that one is good, that wouldn’t work.  And get input.

You don’t have to do everything by yourself. And they became very inward looking, very defensive, when, actually, they didn’t have to be. They would have engaged everyone and changed the conversation if we all were invited to contribute something.

BECKY ANDERSON: This is an easy one, Allyson, surely for Obama.  There’s no way he wants to be associated with big oil now, is there?

ALLYSON STEWART-ALLEN: Well, so far it hasn’t really helped him hugely. I mean he’s been getting extremely bad reviews for not demonstrating empathy, not taking action quickly enough. And, in a way, I mean I’m a bit sympathetic about his position, because he has gone there. He’s trying to demonstrate empathy. He’s trying to do what he can. But he is the president of the United States.  He’s not a scientist.