By Gail Cameron
On April 22, 2010, the Deepwater Horizon exploded and collapsed in the Gulf of Mexico. What followed was more than an environmental disaster as BP’s public strategy exacerbated the disaster, adding billions to its tab and ultimately costing the CEO his job. This disaster almost jeopardised the oil giant’s survival, costing a final tab of $91 billion in market value and a 48% drop in stock.
The recent disaster at Marikana and other strikes threatening the broader mining sector represents South Africa’s Deepwater Horizon, ready to explode and collapse a vital part of our economy. The biggest fallout though, has to be the public perception created of the situation, through complete mishandling of the media.
The Marikana crisis was an unmitigated PR disaster for Lonmin. The CEO was not available, through no fault of his own (he was hospitalised seriously ill), to respond to the media’s questions and show decisive leadership as the company spiralled into a deepening disaster. The Chief Financial Officer was appointed as acting CEO and it seems his approach was distant, matter of fact and inaccessible. The enormity and severity crisis must be borne in mind as we are sure Scott grappled rescuing the company from this precarious situation. That said, there was a glaring lack of meaningful communication, about a situation that made headlines across the world. To date, the company has shown no recognition or empathy for the miners who lost their lives.
This same approach was evident when then BP CEO Hayward worsened the situation by venting his frustration saying “We’re sorry for the massive disruption it’s caused to their lives” then sounding annoyed: “And you know, there’s no-one who wants this thing over more than I do. I’d like my life back!”
Examples of other corporate leaders who have side-stepped hot questions posed by the media are self-evident with the recent Carte Blanche’s expose of Gold Field’s contentious BEE deal. Leadership would not be drawn on the issue and to date, simply released media statements defending the deal’s integrity. Mamphela Ramphele (Gold Fields Chairman) would not comment, pointing out that the deal was concluded before her tenure, referring all questions to CEO Nick Holland. Media relations have deteriorated even further with Gold Fields responding to questions as ‘hostile and threatening’ and ‘not acceptable to our company’ (reference FM, 24th October 2012, Michael Fleischer).
South Africa’s CEO’s and leaders need to foster positive relationships with the media. It will affect the bottom line by influencing public perception, as the media is the key to effective communication and reputation management. Let us not forget, that despite the current government’s attempts to gag the media, the press is the only institution chartered in truly democratic constitutions, to be driven to protect and serve public interest. It is therefore in the interests of all CEO’s to foster an understanding of what drives and motivates the media.
Currently our mining environment has been escalated to crisis, meaning a crisis with potentially devastating risk. This is when a CEO needs to understand, assess and manage their risk. This is done by developing an understanding of how the media operates, to be able to use it to support effective communication to enhance corporate reputation. It is estimated that only 37% of companies have a crisis preparedness plan in place and 89% of management will face an average of 6 major crises in their management period. Remember, it is not the questions that cause the damage, it is the answers.
For more information, contact Gail Cameron, the CEO of The IE Group.