Marketing Influence & Thought Leadership

British Petroleum Begins a New Era of Responsibility for NGOs

We all need and consume oil, and the myriad of products spawned from its ecosystem. We all share in the risk of exploiting it, some more directly than others. And then there are those neighborhoods (next to the refineries) that absorb more risk than others. And then there are the oil companies that take on the risk of exploitation, but in the case of BP we are learning about worst practices in risk management, governance and compliance, not best practices.

British Petroleum’s lack of governance and risk management combined with our own government’s absence of regulatory compliance and oversight marks the beginning of a new era.  In this new era governance, compliance and corporate social responsibility will be driven primarily by non government organizations that are the voice of the people. It has become brutally obvious that large trans-national corporations can’t govern themselves, and more importantly the collaboration between them and governments, (in this case the oil lobby) facilitates an environment of risk and recklessness in the management of natural resources.

After experiencing a near collapse of our financial system, we know now what a joke Sarbanes Oxley has become and that the government regulatory apparatus completely failed.

The hard truth is that our government is challenged to:

·         Manage our natural resources and fisheries

·         Manage our financial system

·         Manage our healthcare system

·         Manage and/or regulate the safety of our food supply

·         Manage or control our borders

British Petroleum is a trans-national corporation active in thirty countries with more than 22,000 service stations and sixteen refineries, and they upstream 2.3 million barrels of oil a day. BP reported 2009 revenues of $239 Billion, a profit of $14B so why can’t they manage their risk and govern themselves, they certainly have the resources?

BP’s Code of Conduct

“A fundamental BP commitment to comply with all applicable legal requirements and with high ethical standards”

I copied the code of conduct from their overly green and seemingly environment friendly website, but there is something about this statement that says who they are. Compliance with all legal requirements, hum what does that mean? Well it means that they will go only as far as the law of any country requires and not further. This is in essence is their problem; they need to go further than applicable legal requirements in the high risk and “high profit” business they run. Compliance with “high ethical standards” is about as vague as you can get and we know they vary with culture, country and company. So what BP is really saying is that we only go as far as we need to and we don’t go the extra mile because it might affect profitability and this is further reinforced by the following quote from their CEO Tony Hayward.

“We are responsible for our operations and we are accountable for setting and observing consistent and high standards within them. Our code of conduct, for example, provides clear expectations on behavior and compliance.”

I had a higher view of BP until the disaster in the gulf exposed their lack of governance and risk management. BP put up $500 million for a bio-fuels research center at the University of California at Berkeley and that is great, but now they have a PR and brand disaster of unprecedented magnitude on their hands. And in my view they have fueled the fire so to speak by setting up a live feed of the well leaking for weeks on end. Perhaps some good will emerge from this when all oil companies take a call to action and re-examine their risk management and governance across operations.

Enter the NGO

Non Government Organizations like the World Wildlife Fund and the Natural Resources Defense Council have now been put in a position of power and truly have the opportunity to be the voice of the people because government has failed. Those who oppose egalitarian groups and view them as zealots and extremists in some ways will rethink their role in world business. Like Exxon, BP will recover from this event and we can only hope they will live up to their responsibility in this terrible environmental disaster.  NGOs now have the power of social media at their disposal and we know that NGOs and many non- profit organizations are harnessing that power to gain influence and audience.

As a student of at the University of Massachusetts College of Food and Natural Resources I learned about the management of our planet’s resources and was taught that there are three principal approaches to managing natural resources:

·         Preservation

·         Conservation

·         Exploitation

 In the beginning many egalitarian groups advocated preservation of natural resources which was and is in direct conflict with the exploitation of our resources, the management approach still prevalent today driven by our capitalist system. This put NGOs at great odds with government and industry and their radicalism challenged many people including the scientific community. Times have certainly changed as NGOs now are important players in the global economy and can significantly impact brand reputation through their influence.

Conservation of natural resources employs management practices that enable the resource to be sustainably harvested and maintained for our children. This means that resources are not irreversibly damaged like our fisheries populations, many of which will never recover from over-harvesting and exploitation. In the case of oil, it is not a sustainable resource; there is only so much of it on our planet. That does not give license to energy harvesters to haphazardly manage operations and put other natural resources and industries at risk, such as fisheries and tourism. NGOs have a greater responsibility than ever in ensuring that large multi-nationals and governments are looking out for the best interest of their people. Join an NGO today and make your voice heard, your state senator, local representative and/or government may not be looking out for your best interest, unless of course you are in California where our governor  Arnold “just said no” to just drill baby and off shore drilling!

Further Reading: Why We Hate the Oil Companies, by John Hofmeister

 

 

 

 

 

 

Startup Leadership in Turbulent Times: Company Values, Customers and Employee Morale Have Never Been More Important

Today, perpetual optimism is the force multiplier, now more than ever (Colin Powell, My American Journey). These are perhaps the most turbulent days of our lifetime, rampant uncertainty about the global economy, our jobs, our friends and families’ livelihoods, health care, education, global warming and to make things worse a weakening US dollar. These are the times that bring out the best and the worst in leaders. Leaders that have built their house on a rock of integrity, trust, and customer loyalty will weather the continuing storm. Those that rely on illusions, gimmicks and fear mongering and have already lost sight of their customers will sink deeply and quickly into the abyss. If you have ever witnessed a ship sinking the rats are the last to swim away from the vortex. This week’s reading is HBR’s, Drucker Centennial, What Would Peter Do? Is the title and as you all know, I am a huge Drucker fan.

Over the course of my career I often thought that participating in a startup was an adventure and it always reminded me of going on research cruises. Although several weeks at sea might seem short, activities and events at sea are accelerated at paces unimaginable, so it is actually a great metaphor. At the beginning of a cruise there is always uncertainty and doubt about the weather, the equipment, but most importantly the people. And unless you have personally handpicked all of your crew/employees, you have no idea how people will adapt and what leadership actions you will execute during your business voyage. There is really no difference in a startup or small business today, in some cases you need to act rapidly and effectively, in others time is your friend and using your best gut judgment is king. The really big difference is there is no day to day nausea of sea sickness to deal with in addition to lack of sleep, but that may not be the case for many employees today.

How Employees Think & Act in Turbulent Times

·         Employee thinking revolves around leadership:

o   Do I have confidence in the management’s decision making?

o   Do I trust the company and leader’s value system and integrity?

o   Are our leaders empathetic and understanding?

o   Is there fairness in decision making across the organization?

o   Can I trust the company’s business model?

o   Is my job safe?

 

These are all vitally important human issues today that seriously impact performance, productivity, innovation, attrition and your ability to conduct business. Dealing with them in an open, honest and fair environment will only deepen employee loyalty over the long run.

I have learned that there is no more powerful radical in the organizational equation than the negative power employee. They must be identified, controlled and/or expelled from organizational culture if necessary. This is the most important task of the sea going scientist manager, and the same goes for startup management. Negative power people will destroy the very basis of your management foundation and have the potential destroy your relationships with employees, customers and partners alike. On every ship I sailed on over a course of ten years there was always at least one negative power person.

 

·         Some employee actions in turbulent times revolve around:

o   Loyal employees persevering and maintaining focus and culture.

o   Lack of management trust results in a serious lack of morale.

o   The negative power people and managers wreak havoc by poisoning your relationships with employees, customers and partners.

o   New siloed political groups emerge across the company.

o   The best employees seek other opportunities, leaving behind a culture not favorable to the high performers.

o   Fear uncertainty and doubt creates apathy that drives down productivity and kills innovation.

·         How many of you have identified and dealt with the negative power people, I would like you to comment and share your management tactics.

 

Net/Net

 

One day I saw a bumper sticker that said, “There is no government like no government and then I thought to myself well if that is the case what about, ‘there is no management like no management.” There are many dysfunctional companies that creep and even some the cruise along with weak and unsupportive management cultures, in the end they almost always fail. One of the hallmarks of successful companies today is great management culture with a clear voice and vision of the future. Those are the companies that attract and keep the best because their managers are clearly focused on establishing and managing people to their highest abilities. Successful managers today need to be more sensitive to the human needs of employees, they are part therapist, mentor, teacher, but most of all they are fair and drive the best from the best. Being tough on employees that are challenged with work and family issues in these times doesn’t work, have more frequent one on one discussions with employees and most importantly preserve their trust. They will be there for you when the going gets tougher.

  The Personality of Fish: Killer Whales in the Sea of Cortez

 

 would have thought there would be Orcas in the Sea of Cortex well here is proof, this picture was taken two weeks ago about 50 miles off Puerto Penasco, in Sonora Mexico. The Marine Mammal Protection act of the 1970’s has been one of the only regulations that have had significant impact on the marine mammals in the US. In the Sea of Cortez marine mammals are alive and well, during the course of our eleven hours at sea we encountered more than fifty whales in addition to huge pods of dolphins and a small pod of killer whales. These animals are at the top of the oceanic ecosystem and appear to thriving in North America, this is extremely good news for our oceans.

Marine mammals, especially whales are like fishing boats that harvest nearly twenty four hours a day, they herd schools of fish and at times blow large clouds of bubbles underneath prey to concentrate them. They feed on plankton, bait fish and sometimes in the case of the Killer Whale they will separate a baby whale from the pod and feed upon it. Whales in general are some of the most unstudied creatures on earth and many of their habits and migratory patterns are unknown, especially their communications. I am sure that many of you who have encountered a whale remember the almost human look that a whale eye casts upon you when it looks up from the ocean. In these turbulent times, be understanding when your employees cast a worried eye in your direction, be a leader with compassion and great selling and marketing in Q4!