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Crisis management in public relations bolaji okusaga


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The best of businesses, are businesses that are insulated from the erosion of value which comes with Crisis. The aviation industry is one such industry which has taken crisis as an integral part of the industry model and with the Mobil and BP Oil Spill crises, and the Shell Ogoni affair, the oil and gas industry is begining to realise that it cannot be business as usual.

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Crisis management in public relations bolaji okusaga

  1. 1. CRISIS MANAGEMENT IN PUBLIC RELATIONS PRACTICE The Oil Industry Experience By Bolaji Okusaga Managing Director, The Quadrant Company
  2. 2. Outline 1 PART 1: Corporate Objective and Stakeholder Management • What is Corporate Objective? • Corporate Objective and Sustainability Principles • Outcomes of a Sound Corporate Objective • Identifying Stakeholders • Demands of Stakeholder Engagement • Types of Stakeholder • Understanding Stakeholder Dynamics • Public Relations in Organisation/Stakeholder Dialogue • Stakeholder Management • Expectation from Relationships PART 2: Agitations from Oil-Producing Communities and the Oil Industry Reality • Historical Context • Background of the Problem • Nature of the Problem • Fall-outs from the Problem
  3. 3. Outline 2 • PART 3: Public Relation Challenges: The Shell/Ogoni Affair as a Case-Study • PR and a Changing Business Landscape • PR as an Advocate • An Advocate for Good or Bad? • PART 4:– Crisis Management: The Shell/Ogoni Affair as a Case-Study • What Constitutes a Crisis? • Dimensions of a Crisis • Types of Crises • What is Crisis Management • When things go wrong • Crisis Planning • PR and Crisis Management • What is Crisis Communication? • Shells Mistake • What Shell Should Have Done • Lessons Learned
  4. 4. PART 1:Corporate Objective andStakeholder Management
  5. 5. What is CorporateObjective? • Corporate Objective articulates a Company’s manner of doing business and the kind of relationships it need to create with its Stakeholders to deliver on its purpose. • These objectives are summarized in the organisation’s mission, vision and culture and help set the tone for interactions with its Stakeholders. • Corporate Objective asks the questions: What is the purpose of our organisation? What value do we intend to create? What kind of ideals bind our stakeholders together? • By answering these questions, Corporate organisations are able to differentiate, plan, execute and deliver exceptional performance.
  6. 6. Corporate Objective &Sustainability Principles Principles Components Technology The creation, production and delivery of products and services...based on innovative technology and organization that use financial, natural and social resources in an efficient, effective and economic manner over the long-term Governance Companies should operate based on the highest standards of corporate governance including management responsibility, organizational capacity, corporate culture and stakeholder relations Shareholders Shareholders demands should be met by sound financial returns, long-term economic growth, long-term productivity increases, sharpened global competitiveness and contributions to intellectual capital Industry Companies should lead their industrys shift towards sustainability by demonstrating their commitment and publicizing their superior performance Society Companies should encourage lasting social well being by their appropriate and timely responses to rapid social change, evolving demographics, migratory flows. Shifting cultural patterns and the need for life-long learning and continuing education Source: World Commission on Environment and Development
  7. 7. Outcomes of a SoundCorporate Objective • Growth in Market Share • Market Leadership • Impressive Turn-over • Good Operating Margin • Huge Gross Profit • Increase in Market Capitalisation • Stock Price Commands Premium • Absence of Crisis borne out of a healthy Operating Environment - *** (This is the most important role of PR in furtherance of a Company’s Corporate Objective)
  8. 8. IdentifyingStakeholders Anyone on the Street Influencers Core Target
  9. 9. Demands ofStakeholder Engagement • Every organisation relates with different publics - from the Shareholders, Staff, Customers, Industrial Unions, Government and Regulatory Bodies, Counter-parties, the Press to the local community. • These stakeholders are different in terms of their interests and expectations. • Organisation therefore need a deep-seated understanding of these interests and expectations to maintain a dialogue, enhance relationships and retain its goodwill among its stakeholders.
  10. 10. Types Stakeholders • Advocate stakeholders - active and supportive. should be approached with action-oriented messages and engaged in third-party endorsements. • Dormant stakeholders - ready to be involved. Messages should focus on creating awareness and understanding of issues, or on reducing barriers to action and increasing emotional attachment to the issue. • Adversarial stakeholders - dont respond to defensive messages, which actually can cause these opponents to dig in deeper. Conflict resolution strategies that seek win-win solutions work better. • Apathetic stakeholders – should not be ignored, even though that is often managements style. A better strategy is to increase awareness of the issue with an invitation to collaborate before the issue morphs into a crisis. Source: Brad Rawlins, Brigham Young University
  11. 11. UnderstandingStakeholder Dynamics ACTIVE Adversarial Advocate Stakeholders Stakeholders NON-SUPPORTIVE SUPPORTIVE Apathetic Dormant Stakeholders Stakeholders INACTIVE Source: Brad Rawlins, Brigham Young University
  12. 12. Public Relations inOrganisation/Stakeholder Dialogue • Public Relations is the art and science of building relationships. • Public Relations engenders purposeful communications between an organisation and its publics, it is proactive and future orientated, and has the goal of building and maintaining a positive perception of an organisation in the mind of its publics. • In the dialogue between Organisations and their stakeholders, the following branches of Public Relations suffice: • Employee / Labour Relations • Customer Relations • Investor Relations • Media Relations • Government Relations • Community Relations • Reputation Management • Issues Management • Crisis Management
  14. 14. Expectation fromRelationships• EMPLOYEES / POTENTIAL Career Opportunities, EMPLOYEES Competitive Remuneration, Good Management• CUSTOMERS Trustworthy, Good/Successful Products• DISTRIBUTION / CHANNEL PARTNERS Attract Customers, Make Sales• REGULATORS Ethical, Compliant• COMMUNITIES Philanthropy, Good Corporate Citizenship
  15. 15. PART 2:Agitations from Oil-ProducingCommunities and the Oil IndustryReality
  16. 16. Historical Context • Oil was first discovered in Nigeria in 1958 at Oloibiri in the present day Bayelsa State. • Nigeria gained Independence in 1960 and with Independence came the active rivalry of the Regions and political actors leading to political turmoil and subsequently, a Coup’dtat. • With the Coup came Military rule followed by the declaration of a Civil war. • At the end of the war, an era of active prospecting began leading to the Oil boom of the 1970’s. • With the Oil boom came prosperity and the development of mega-cities such as Lagos, Port-Harcourt and Abuja.
  17. 17. Background ofthe Problem • With the discovery of Oil, came the licensing of Multi-National Oil Corporations, the allocation of On and Off-Shore Oil Blocks and a Joint Venture Partnership Agreement which spells out a revenue sharing ratio without a sound legislative platform which looks at environmental pollution, community relations and business continuity. • Oil was dubbed the Black-Gold and with this gold came the Udoji Salary award which created a bogus bureaucracy and led to an era of crass-materialism and corruption. • While all these were going on, trouble was brewing in the Niger-Delta…
  18. 18. Nature of theProblem Oil exploration activities led to the flaring of dangerous gases unchecked and Oil spills Environmental Pollution which led to the pollution of farm-lands and water-ways, which affected the People’s source of livelihood. There was a dearth of Community Relations in the local community where these Oil Community Relations Companies operated as they restricted their activities to mega cities such as Lagos and Port-Harcourt where they had Corporate Offices and carried on purely technical services in their host communities while honouring their joint venture agreements and paying their taxes to the authorities as at when due Government, more or less, abandoned the oil producing communities as Oil was Business Continuity placed on the Exclusive legislative list with very little allocation made in honour of the principle of derivation. The down- stream sector was undeveloped as Government paid lip-service to private- sector led development of refineries and petro-chemical plants which would have generated more employment and help reduce tension.
  19. 19. Fall-Outs fromthe Problem A failed cessation bid in the lateIsaac Adaka Boro’s Peoples sixties. This was an early warning Liberation Army signal An Anti-Environmental Degradation movement whichKen Saro-Wiwa’s Movement got to the attention of the world, for the Survival of Ogoni led to the withdrawal of Shell from People Ogoni Land in 1993 and eventually caused the death of the protagonist A militant Resource ControlAnsari Dokubo’s Niger Delta Movement which started after Liberation Front Government’s bombardment of Odi and has crystallized into an organised movement which regularly captures and holds expatriate oil workers hostage
  20. 20. PART 3:Public Relations Challenges: The Shell/Ogoni Affair as a Case-Study
  21. 21. PR and a ChangingBusiness Landscape • One of the most fascinating crisis management case studies is the Shell-Ogoni affair. • This affair led to the emergence of "PR ploy," "PR maneuver" and "PR effort" - the demeaning labels used to describe the way the situation was handled, as it tested the Crisis Management frame- work of a big Trans-national Corporation like Shell. • In order to ride the challenges occasioned by the rapidly changing operating environment, Shell initially had uncoordinated approaches to dealing with issues arising from the activities of Human Rights / Green Movements around the world. • This was largely due to the fact that the operating environment was unexpectedly distorted by the Ogoni affair and in the absence of a structure to deal with it, Shell’s image continued to dip with the unrelenting degeneration of relations with its host communities and the boycott of its products and services across the globe.
  22. 22. PR as an Advocate• At the height of the Crisis, the PR professionals working for Shell became Propagandists, taking controversial positions on issues of Human Rights, Environmental Pollution and Resource Control, which were essentially the factors responsible for the Crisis.• But you know what? They had every right to do so. After-all, Public Relations is an advocacy profession.• The objective of every PR activity is to influence public opinion.• The ultimate goal is to get people to take positive action on behalf of client, organization or cause. And that in itself is controversial.
  23. 23. An Advocate forGood or Bad?• PR holds a powerful position and because of this power, PR activities are often called to question by the public, the Shell/Ogoni Affair tested PR’s power on the following issues: – Misleading Information: There were allegations by MOSOP, Amnesty International and a host of Green movements that Shell was peddling false or incorrect information designed to lead policy-makers, consumers and interested Public astray. – Influence of Policies and Government’s Action: Where Shell had the ear of Policy-makers, how Shell exerted its PR power became a cause for concern. – Discrimination: It was alleged that Shell had discriminated against their host Communities in their employment policy. – Destruction: It was also claimed that Shell deployed PR to soften its destruction of the Environment and aquatic life in the Communities where they operate. – Casualisation and Pay Inequities: Casualisation and Pay inequalities between Expatriates and Nigerians became an issue. – Gain at Expense of Others: It was claimed that Shell was making money at the expense of the ill-fortunes of their host communities.
  24. 24. PART 4:Crisis Management: The Shell/Ogoni Affair as a Case-Study
  25. 25. What Constitutesa Crisis? • A Crisis is a situation that is threatening or could threaten to harm People or Property, seriously interrupt business, damage reputation and / or negatively impact organisational value. • Crisis create conditions that make it difficult for Managers to make good decisions and communicate well. • Crises place Organisations experiencing them in public spotlight and calls management competence into question. • Crisis impose a need for organisations to communicate quickly, accurately and skillfully with a number of important groups.
  26. 26. Dimensions of aCrisis • A Crisis usually has several critical dimensions which if poorly handled can disrupt or destroy best efforts at managing them. • Failure to respond and communicate in ways that meet community standards and expectation will result in a series of negative consequences. • The following are some of the critical dimensions of a crisis: - Operations - Victims - Trust / Credibility - Behaviour - Professional Expectations - Ethics - Lessons Learned
  27. 27. Types of Crises Financial Crisis Short term liquidity or cash flow problems; and long term bankruptcy problems. Public Relations Crisis Negative publicity that could adversely affect the success of a company. Strategic Crisis Changes in the business environment that call the viability of the company into question.
  28. 28. What is CrisisManagement? • Crisis Management basically refers to the management of the reality of a crisis. • It involves identifying a crisis, planning a response to the crisis and confronting and resolving the crisis. • Crisis Management is applicable to any field of endeavour. • The theory of crisis management can be divided into crisis bargaining and negotiation, crisis decision making, and crisis dynamics.
  29. 29. When Thing Go Wrong • At the height of the Crisis generated by the Shell/Ogoni affair, the following went wrong: – Operational response broke down. – There were huge losses to Shell based on reduction in daily production of Crude Oil and colossal damage to Oil wells by the aggrieved Community. – Stakeholders (both internal and external) did not initially know what was happening and were angry and negatively reactive. – Rumours thrived as to the activities of Shell and real intensions of the leaders of MOSOP. – Shell was perceived as inept and criminally negligent.
  30. 30. Crisis Planning • Crisis Management is usually neglected by many organisations untill a crisis reveals the lack of planning. • Crisis Planning thinks of situations that might arise to create difficulty for an organisation. • It involves the rehearsal of various scenarios and the mapping of ways in which to mitigate them rather than reacting after a Crisis has happened. • Public Relations is crucial in Crisis Planning.
  31. 31. PR and CrisisManagement • Public Relations is an anticipatory practice which attempt to foresee events, trends and issues which may develop to disrupt important relationships. • Crisis precipitate a break-down in relationship because it disrupts the normal flow of interaction between an institution and its stakeholders. • Since Public Relations manages the expectations of the crucial stakeholders of an institution, it is thus a veritable tool in Crisis Management. • The special area in Public Relations which deals with the management of Crisis is Crisis Communication.
  32. 32. What is CrisisCommunication? • Crisis Communication is a methodic process through which perception is shaped and positive reactions obtained from crucial parties in an emergency or disaster situation. • Crisis communication can take various forms: - Media Relations - Shareholder Relations - Employee Relations - Community Relations
  33. 33. Shell’s Mistakes 1. Shell initially pretended as if nothing was happening 2. They reacted to the crisis situation after it had gone public. 3. They relied on the goodwill they had built with the Government and local Chiefs. 4. They distance themselves from the media. 5. They were reactive to the information MOSOP was releasing and not proactive. 6. Shell spoke above their audience by speaking only with the Policy makers and not the aggrieved Community. 7. They assume that truth always conquer lies. 8. They ignore the feelings of their host Community and address issues only. 9. They avoided the crowd and use third parties and written statements only. 10.Shell did the same things again and again and expected positive results.
  34. 34. What ShellShould Have Done 1. Build a Crisis Communication 10. Identify key messages Team. 11. Deploy strategy 2. Identify Spokespersons. 12. Obtain feed-back 3. Train Spokesperson. 13. Be open to criticism 4. Establish Communications 14. Fine-tune strategy based on Protocol. feed-back and criticism 5. Identify the most crucial 15. Empathise with victims, don’t Stakeholders. just focus on the issues 6. Decide on Communication 16. Where crisis emanated from a methods. dispute, be ready to negotiate 7. Anticipate issues likely to 17. Act to resolve the issues arise from Crisis. 18. Give information on steps 8. Assess the Crisis situation taken to resolve the issues 9. Develop holding statements.
  35. 35. Lessons Learned DON’TS DOS 2. Don’t make the media the only 2. Communicate directly with your means of communicating with most important audience. your crucial publics. 3. Remember that your employees 3. Don’t direct all your efforts at the are a critical audience. external targets only. 4. Do integrate Legal and PR 4. Don’t operate in ignorance of the strategies Law. 5. Say “I’ll very much like to 5. Don’t say “no comments” if you comment but I don’t have the haven’t had a chance to review facts yet.” You may also request the case. the inquirer to fax or e-mail the 6. Don’t threaten to sue the media, details to you. it may escalate the crisis because 6. Seek the understanding of the most media organisations enjoy media by showing empathy and being sued. It may result in a a willingness to reverse the sensational hit for them. situation. 7. Don’t assume you know how to talk to the media. 8. Get media trained. 8. Don’t depend on others to tell 9. Consider becoming you own your story. publisher by posting messages on the crisis on your web-site.
  36. 36. Thank You