by John Izzo – Best-Selling Author & Business Visionary
These days it is hard to escape conversation about B.P and the Gulf of Mexico. As someone who has spent the last twenty years advising companies on corporate culture, leadership and social responsibility, the events of the last two months provide important lessons for every company on everything from leadership and brand to how to demoralize your entire workforce in one fell swoop.
With oil flooding the waters off the U.S. coast and B.P.’s shareholder value plummeting, what can the rest of us learn from this crisis? The first lesson is that corporations matter, that is, companies have a real impact on the world we all live in. If anyone doubted the impact of corporations on society just take a close look at the last two years. The decisions of large financial institutions to leverage risky assets nearly caused a second Great Depression leading to a massive bailout by governments. That bailout has lead to huge government debt and threatens now to cause what many feared-“the double dip.”
Meanwhile, oil is gushing uncontrolled into the Gulf of Mexico from a BP oil rig threatening not only an entire fishing industry but sensitive wetlands all along the Gulf coast. Watching how BP is handling this situation is a case study in brand making or in this case, brand breaking.
Over the last ten years BP branded themselves as the “most responsible” oil company in the world and told us that BP stands for “beyond petroleum.” Yet they forgot a maxim I learned years ago from the CEO of a large company who told me; “Under-promise and over deliver.” B.P. did the opposite. They spent lots of money to make promises and now there is mounting evidence that much less effort was paid to creating a culture of safety and care that would have prevented this natural and business disaster. Let’s assume they were even sincere about Beyond Petroleum, but they probably were too focused on the talk. I see companies make this mistake all the time, internal and external, we worry far too much about selling people our “story” than making it real. Walking the talk consistently comes out as a key factor for employees and consumers. We should never let our commitment to the “talk” be less than our commitment to the “walk.”
As leaders too we see the lesson of how we are always on stage. As someone who works with leaders to engage associates and customers, I am amazed how leaders forget this simple principle. Much of B.P.’s problem is that we simply don’t believe that their CEO Mr. Hayward really gets it. When interviewed about fixing the spill he said “no one wants this fixed more than me, I want my life back.” He also told The Guardian that the oil spill was “tiny in relation to the total volume of water in the Gulf.” He forgot that leaders are ALWAYS on stage. Those two comments, just wishing this problem would go away while his company’s decisions damaged the lives of thousands of people destroyed his credibility. I have seen this so many times over the years, leaders forget it is all about consistency, one slip, and trust is gone. Everything we say, everything we do is measured and judged, that is the price of leadership.
Another interesting lesson is how to respond to “brand making” moments. Contrast BP’s response with similar situations in recent memory. Toyota built their brand based on quality, so an accelerator pedal that doesn’t let you stop the car is bad news. Even though the pedal was made by another company, Toyota apologized publicly to their customers saying we “let you down” and seems to be systematically trying to address the situation. Maple Leaf Foods in Canada had a food safety issue a little over a year ago that literally killed customers. That is a pretty big brand breaker! Yet by taking responsibility and apologizing deeply to their customers while letting everyone know how profoundly affected they were by what happened, the brand has come out almost unscathed. Most of all in the case of B.P. we simply do not believe them. As Woody Hayes, the former Ohio State coach said: “Leadership is ALL about sincerity.”
Those of us who run companies must never forget that the decisions we make impact the lives of real people and even the larger world. Whether we sell financial instruments, cars, food, or pull resources from the ground, the decisions we make have implications well beyond the bottom line of our own enterprises. What’s more, we can never forget how fragile our brands are. The percentage of a company’s value attributable to good will has increased five fold in the last thirty years. That is, a company’s value is less about the book value of its physical assets and more about how consumers view the brand. As reported in my book, Values Shift, the single factor in terms of why we buy from or want to work for a company that has made the biggest gain over the last decade is social responsibility! We want to believe in who we work for and who we buy from.
Warren Buffet may have put it best: “It takes twenty years to make a reputation but only five minutes to ruin it. If you think about that, you will do things differently.” Good lesson for each of us whether we are a brand or an individual leader.
Thought provoking and best selling author Dr. John Izzo has devoted his life and career to facilitating deeper conversations about values and work, life, leadership and success. He has worked with thousands of leaders, professionals and front-line employees to foster workplaces of excellence, purpose, learning and renewal.
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Tags: BP, British Petroleum, Corporate Responsibility, Gulf of Mexico, John Izzo, Marketing & Branding, oil, oil disaster, responsible branding, sincerity, social responsibility, threatened wildlife, Tony Hayward, Toyota, trust
