The Supreme Court shot down a request
Monday from oil giant BP to halt its ongoing payments to businesses in the Gulf of Mexico following the 2010 Deepwater Horizon spill. The company wanted its payments halted while it appeals the $9.2 billion settlement.
So here’s what BP seems to have accomplished: After all its advertising saying how proud it was to help the Gulf states, it has proven the effort has been grudging at best.
(For the sake of perspective, BP's revenue in 2013 was about $243 billion
In a piece published on The Huffington Post
Wednesday, Harlan Loeb, a crisis communications professor at Northwestern University and the crisis and risk chair at Edelman, argues that BP has damaged its reputation so badly that even the courts won’t hear it out.
When a crisis strikes at the core competency of a company -- in this case, safe and containable offshore drilling -- the reputational debt created by mishandling the crisis can persist for decades. The larger the gap between public expectations and actual performance, the slower the redemption period.
Loeb says another company is reaching toward BP’s so-called “reputational debt” level: General Motors, which is continuing to deal with fallout
from its recall of millions of cars—2.6 million initially, followed by many more—for faulty ignition switches that have been linked to at least 13 deaths.
“BP and GM simply weren't equipped with the clarity of purpose at critical stages when information should have been elevated or other decisions should have been made decisively,” he writes.
Loeb’s conclusion is fairly obvious: Organizations need crisis plans to avoid falling so far into “reputational debt” that they sink.
“Reputation risk management is a leadership mindset that fully embraces the duty to protect core asset value,” he writes. “And, simply enough, it begins with a plan.”