BP: in very Deepwater, but not drowning yet

If you were looking for a suitable image to convey what a crisis in reputation looks and smells like, you could scarcely do better than this. Hundreds of thousands of barrels of sticky crude oil leeching daily into the Gulf of Mexico, and washing up week after week on the shores of the country that is still the world’s biggest power, ruining people’s livelihoods along with the coastal environment and sending American politicians into apoplexy. The clever tagline that BP devised a few years ago to position itself as part of the new, sustainable future now looks like a bad joke. Far from being ‘beyond petroleum’, the company may now be about to drown in it.
Or so the conventional wisdom goes. What chance does BP have of emerging from the current crisis?
There’s a case for saying that, once the flow of oil has been staunched and the immediate crisis has passed – easier said than done, apparently - the company has a reasonable chance of returning to some semblance of business as usual. BP is a colossal company – the world’s fourth biggest – and its many other operations across the world continue to earn it healthy profits, particularly in an era of high oil prices. Unlike a company producing consumer goods, whose market appeal might be fatally damaged by an incident of this scale, consumers have limited scope to boycott BP’s products, even if they wanted to. Most of BP’s revenue is from its upstream rather than downstream business, in contrast to some of its competitors, and it’s hard to see how the drive to ensure BP covers the full cost of cleanup and compensation would be served by turning off its funding tap.
And there is some reason to believe the effect on its reputation may not be as seismic as has been suggested. BP has faced other problems – the Texas City oil refinery explosion killed 15 back in 2005, and corrosion problems in an Alaskan pipeline caused a spill of an estimated million barrels of oil there in 2006. But when GlobeScan tested awareness of these incidernts among UK and US consumers at the time, we found that most had not heard of them; those that had tended to feel BP were doing a reasonable job in trying to resolve them and – critically – the great majority did not feel that their respect for BP had been damaged as a result.
Of course, the scale of the current disaster dwarfs those two accidents, and together with the BP leadership’s hapless media performances this may mean that all bets are off. But it’s worth considering this: for many years, our data has shown that the oil companies across the board are not popular corporate citizens, and accidents like this are a major reason why. Deepwater Horizon may be a stark reminder of the price we pay for our collective addiction to oil, but for now, there’s no obvious alternative to hand. That, for now, may be enough to save BP’s skin.

The birth of a new megatrend?

The IT revolution; electrification; the rise of mass production; globalization. What do they all have in common? According to Harvard Business Review, they are all megatrends, and sustainability should now be added to the list.

In business terms, a megatrend – the term was coined back in 1982 by John Naisbitt in his bestseller of that name – is a major societal or economic shift that ‘force[s] fundamental and persistent shifts in how businesses compete’.

Many businesses have certainly found themselves struggling to cope with the greater expectations being placed upon them to improve the sustainability of their processes, products and services. Our regular study of experts in the field reveals that those in the know rate companies only just ahead of government, and a very long way behind NGOs and social entrepreneurs, in terms of how well they are seen to be advancing the sustainability agenda. And while some companies do seem to have taken sustainability to heart and integrated it into their core strategy – our expert panel rates initiatives like Walmart’s Sustainability Index and GE’s Ecomagination particularly highly – other high-profile campaigns like BP’s Beyond Petroleum are seen to have foundered when they came up against a succession of crises and scandals, of which the Gulf of Mexico oil spill is only the latest. Incoherent, inconsistent or insincere initiatives, it seems, aren’t impressing anyone.

But perhaps this criticism underestimates the change in mindset that is taking place within the corporate world. Despite the challenges, and setbacks like Copenhagen, the drive to greater sustainability shows no sign of abating. And as HBR points out, while government is starting to regulate as never before, companies – critically - are betting that investing in innovations in low-carbon technology and energy efficiency will pay long-term dividends. This megatrend is just getting going.

A see-through world

What makes a responsible company? It's a fair question. Terms such as CSR, sustainability and corporate citizenship are on everyone's lips these days. Even so, there is often a sense that they mean different things to different people.

But sometimes an issue cuts through. As the world economy attempts to put itself back on its feet, somewhat bloodied and bruised after the experience of the last couple of years, transparency is suddenly the buzzword du jour.

Our annual study of consumer views of CSR across 30 countries asks people to say what they consider to be the most important thing a company could do to be considered socially responsible. Treating employees fairly still tops the list, but behaving transparently and ethically is coming up hard on the rails – it was named spontaneously by just 8% of our global sample of consumers in 2005, 10% in 2008 but 20% this year. In the wake of the economic crash, when lots of apparently sound businesses turned out to have feet of clay, consumers increasingly want the whole picture about the companies they deal with, warts and all.

This is backed up by a Business Week survey of the world's top 100 brands, as Sustainable Life Media reports. Trust and transparency top the list of consumer concerns in 2009. The piece also makes the point that as well as expecting companies to keep them fully informed of what they're up to, consumers are quite prepared to use the opportunities the internet affords them to make sure that, when a company falls short, everyone knows about it.

We also share the assessment here that water use is going to be a big, big issue for companies over the next decade – and increasingly, one of the issues on which consumers will be expecting them to be transparent and lay their cards on the table. Water emerged as one of the most pressing issues in our survey of sustainability experts around the world at the end of last year, and our 15-country study of consumer views on the issue revealed that 72% considered water pollution to be a 'very serious' issue and 71% felt the same way about fresh water shortages.

Responsible water use is, in one way or another, a pressing issue for all sectors, not just heavy industry or beverages – and the way companies handle it is likely to be a litmus test of how they respond to the challenges of an increasingly see-through world.

The American nightmare: over at last?

Cast your minds back, if you will, to the 1990s. The USA had ‘won’ the cold war. The long economic boom was in full swing. Few had heard of Osama bin Laden, outside a coterie of Middle Eastern policy specialists, and even fewer took his threats seriously. America felt, for the most part, prosperous, vindicated and relatively invulnerable.

We all know what happened next – the contested presidential election of 2000 brought George W Bush and the neo-cons to power who swiftly disengaged from international initiatives like the Kyoto protocol, the dot-com bust gave a strong hint that US capitalism might not be as robust an institution as it looked, 9/11 reminded everyone that not everyone shared the American dream, Iraq and Afghanistan were invaded, and swiftly degenerated into running sores that looked like an object lesson in the consequences of hubris.

And sure enough, we saw the effect on global public opinion. We’ve just released the latest wave of our regular tracking with BBC World Service of the way people globally see the influence of different countries in the world. When we started tracking perceptions of US influence in 2005, the proportion of people across our 14 tracking countries who felt that it had a ‘mainly positive’ influence in the world stood at 38% - hardly stellar when set against the nearly 60% that saw Canadian influence as positive in that year. But as the body count in Iraq mounted, it dropped still further to 28% by 2007 – behind not only all the other major powers of Europe and North America but behind Russia and China, too.

That now looks to have been the low point. In the last year of Bush’s presidency positive views of US influence breached the 30% mark, continued to improve in 2009 and this year, with Barack Obama’s first term well underway, are now back at 40% and have overtaken negative views. The rehabilitation, if not complete, looks at least well on track. The USA has China in its rear-view mirrors once again in terms of global public perceptions.

What to conclude then? The upswing in positive perceptions of the US appears to date from the time when the country lost its appetite for projecting its strength in a unilateral way and started trying to mend fences with the international community. At the same time, the countries still felt to be projecting the most positive influence (Germany, Canada, the EU generally) are those that appear most fully committed to international cooperation, while as China’s economic strength and assertiveness has grown, its positive influence is felt to have declined. As far as international public opinion is concerned, it would appear, cooperation, stability and – perhaps - humility rules.

Politics: pass the salt, please...

Politics in Western democracies these days can seem like a somewhat insipid affair. Ideological cut-and-thrust is hard to come by, leaving political parties to argue about who is best placed to administer the state on the basis of a set of ground rules that are never seriously called into question. Lots of sound and fury masking a great deal of consensus.
Hardly surprising then, maybe, that electorates seem to have concluded that rather less is at stake than it once was and that election turnout continues to slip in many countries.
Ironically, a common complaint is that the truly contentious issues are left off the political agenda as being ‘too difficult’ for parties to handle. In Europe, the debate about continued EU integration is one that is often cited. Which MEP to vote for to voice opposition to the Lisbon treaty, for instance? And while at one level economic questions completely dominate the current UK general election campaign, and there are real differences of opinion between the competing parties as to the best strategy to adopt in the face of a ballooning budget deficit, there seems sometimes to be a conspiracy among politicians from the main parties not to talk in too explicit terms about the stark financial decisions facing the country and their consequences, for fear of giving too many hostages to electoral fortune.
Another ‘hot button’ issue is migration. The extent and effect of the inflow of migrants into Western economies is endlessly argued about, particularly within their popular media. But mainstream parties often try and steer well clear of taking too overt a position for fear on the one hand of alienating an electorate where anti-immigrant feeling is widespread, or on the other hand of being accused of ‘playing the race card’. The FT reported recently that votes for far-right parties were on the rise again in many countries, who find a ready audience for accusations that the mainstream parties are colluding to keep the issue off the agenda.
What’s clear is that the arguments advanced both for and against restricting immigration often rest not only on assertions about the relative value of immigrants to countries’ economies, but also to their culture. Those in favour of liberal immigration policies often argue that the exposure to other ways of life, value systems and beliefs that immigrants bring can be a huge benefit to a society and promote a sense of global citizenship. Our data suggests that, at the very least, opinion is sharply divided on this idea– our latest polling revealed that roughly equal numbers around the world see themselves as chiefly either global or national citizens, but that this isn’t strongly associated with numbers of immigrants – in largely monocultural China there appear to be rather more self-declared global citizens (70%) than in multicultural Britain (54%).
Whatever the truth, these questions of identity seem to be largely absent from political debate in most countries. The future health of democracy will surely be partly dependent on a braver generation of politicians who are willing to stand up and be counted, and tackle the issues that really define us all.

You can take the company out of Japan, but…

Have you noticed? It’s been several weeks now since Toyota had to recall any cars. The temptation to be wise after the event, of course, is almost irresistible - but if the crisis is, at last, over, what can the rest of us learn from this unhappy episode in Toyota’s history?

Jonathan Hemus of reputation management consultancy Insignia argues in The Guardian that it was actually a corporate strength - Toyota’s hard-earned reputation for quality and an internal culture that regarded anything less than perfection as shameful - that meant that its first instinct may have been to ‘put a lid on the stink’ rather than come clean and thus precipitate the crisis.

But is that sort of culture really so particular to Toyota? Perhaps if there are morals to be drawn, they may have to less to do with Toyota itself and more with the influence that a national culture can have on the way a global organization behaves.

It’s arguable that the very same combination of respect for authority, hierarchical management structure and fixation with the ideals of craftsmanship that allowed Toyota to grow to be the world’s leading car maker and define the much-lauded Toyota Way – but left it unable to respond in a credible and sure-footed way to a major crisis- is the very same one that is espoused by many top Japanese companies. In a culture where successful product liability claims by consumers are, moreover, few and far between, Japanese companies rarely respond to crises well – a point made recently by Jeremy Cato in the Toronto Globe and Mail.

This, then, may be one feature of the rise of the global corporation – the way that nationally-defined company cultures shape the fate of their organization, for good or bad. In the same way, perhaps the most important distinguishing feature of the buccaneering high-profile casualties of the recession – Lehman Brothers, AIG, Bear Stearns, RBS – was their very Anglo-Saxon-ness.

The evidence of this national DNA in organizations is something we see a lot of as we work with global companies – and their local offices - around the world. Scratch the surface, and maybe the multinational corporation isn’t as bland and homogeneous an entity as we all thought.

The net widens

The term ‘tipping point’ is wildly over-used these days (thank you, Malcolm Gladwell). A quick Google reveals that in the last few weeks it’s been applied variously to phenomena as diverse as the Greek budget crisis, rising CO2 emissions, The Hurt Locker’s Oscar prospects and the antics of the Chicago White Sox baseball team’s manager. Enough already, one is tempted to say.

Sometimes, though, something really does reach a certain level of ubiquity, passes a point of no return or breaks through into public consciousness in such a major way that the ‘t’ word is hard to avoid. Twenty years or so on from the birth of the World Wide Web, the internet may, definitively, be said to have ‘tipped’.

Our latest poll for BBC World Service reveals that four in five adults across 26 countries surveyed regard internet access as a ‘fundamental right’. That those who use the internet now overwhelmingly regard it as a sine qua non of modern life is less surprising than that over seven in ten of those who aren’t online - that is to say, who haven’t used the internet in the last six months - feel the same way. Yes, those on the other side of the digital divide do know what they’re missing. This raises big questions for governments around spending priorities as they try to bring down budget deficits.

The Economist recently reported that, with its 350 million users, Facebook now has more ‘citizens’ than all countries except India or China. Our poll found that more than half of all internet users enjoy spending their time on social networking sites, and the usage statistics bear this out. We may now be reaching a point where Facebookers have more in common with each other in the way they live their lives and their expectations of their community than they do with their non-connected compatriots. Again, a potentially huge shock for our elected representatives. Nationality is still a big deal in driving attitudes, of course – as our polling continues to show – but for how much longer?

Another straw in the wind – our latest polling on corporate social responsibility has suddenly recorded a substantial increase across many countries in the proportion who look online for information about how responsibly companies are behaving. This is the internet as the modern oracle – the definitive arbiter and repository of collective wisdom about all elements of life; companies, political parties, products and services, celebrities: work, rest and play.

A final and revealing statistic from our BBC poll – nearly half of the web users surveyed did not feel they could cope without the internet. And, let’s not forget, it barely existed twenty years ago. For better or worse, this looks like an evolutionary change. Homo hyperconnectedus, your hour has come.