CRISIS MANAGEMENT IN PUBLIC RELATIONS PRACTICE: THE SHELL - OGONI EXPERIENCE
PART 1: Corporate Objective and Stakeholder Management
What is Corporate Objective?
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 binds our stakeholders together?
By answering these questions, corporate organisations are able to differentiate, plan, execute and deliver exceptional performance.
Corporate Objective & Sustainability Principles
A sound corporate objective does not focus on immediate gains, rather a sound corporate objective is underscored by the need to invest in tomorrow while seeing today’s gains as an opportunity to ride tide well into the future. On the other hand, sustainability is the capacity of an organisation or a resource to renew and replenish itself while guaranteeing the stability of the ecosystem and environment.
Given the foregoing, it is apparent that organisations that seek to endure well into the future must underline their business practices with sustainability principles. Sustainability, within the framework of an organisation’s corporate objective is largely defined by the following principles:
Principles | Components |
Technology | The creation, production and delivery of products and services based on innovative technology. An 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 industry's 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 |
Furthermore, another principles aligned to sustainability principles is the principle of the Triple Bottom-line, which looks at return on investment far beyond the purview of the balance sheet and the profit motive. The Triple Bottom Line takes a more holistic approach to measuring business and organisational success. It postulates that an organisations existence, success and continuity goes beyond the need for returns to shareholders as there are other broad, though critical, factors which determine the success of an organisation. To this end, the principle of the Triple Bottom-line stresses the following:
a. Social (People):
This emphasizes the fact that organisations wear the toga of corporate citizenship because they operate under a social order. Therefore, to perpetuate itself, an organisation must strive to be relevant within the context of that social order.
b. Ecological (Planet):
This implies the fact that the organisations operate within an ecosystem which is usually impacted by the activities of the organisation. Therefore, to thrive on a long term basis, organisations but seek to protect the ecosystem and the environment where they operate.
c. Economic (Profit):
This stresses the fact that organisations are economic entities which strive for survival within the larger fabrics of society through the delivery of value in return for economic gains.
Outcomes of a Sound Corporate Objective
Corporate Objective is brought alive through the setting of goals for the organisation based on its vision and mission statement.
Corporate objective define the essence of an organisation and its reason for being. It is specific, realistic and attainable. Corporate Objective when set is brought alive through the activities of strategic planning and other aligned units within the organisation working closely with the operational groups to attain the set goals.
Given the bigger competitive environment in which organisations are forced to operate as a result of globalization which has redefined markets and business borders, setting a sound corporate objective and having a ‘knowledge machine’ deploying strategies to attain the objectives have become a sine-qua-non for business success.
The following are outcomes of a sound corporate 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)
Defining the Crucial Stakeholder
Every business operates within a frame of influence and targets specific group(s) towards the attainment of its corporate objective. The manner in which an organisation navigates its circumference of influence and patronage determines the extent to which it is able to achieve its objectives.
a. The Inner Circle – Crucial: Stakeholder is critical to the success of the organisation. This stakeholder group demands for value from the organisation in return for economic gains. The stakeholder group is critical for the attainment of the Economic Bottom-line of an organisation.
b. Second Circle – Significant: This stakeholder group has significant impact on the operations of the organisation as they serve to monitor and approve of the operations of the organisation in alignment with the public interest. The stakeholder group that best fits here is the Regulatory and Policy Community.
c. Third Circle – Interested: Stakeholders who have an interest in the business of organisation, but come with little no economic benefits. They serve to put pressure on the organisation, the policy and the regulatory community in furtherance of the protection of their interest or the protection of the social order.
Demands of Stakeholder 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. Organisations therefore need a deep-seated understanding of these interests and expectations to maintain a dialogue, enhance relationships and retain its goodwill among its stakeholders.
Types of Stakeholders
a. Advocate stakeholders - active and supportive. Should be approached with action-oriented messages and engaged in third-party endorsements.
b. 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.
c. Adversarial stakeholders - don't respond to defensive messages, which actually can cause these opponents to dig in deeper. Conflict resolution strategies that seek win-win solutions work better.
d. Apathetic stakeholders – should not be ignored, even though that is often management's style. A better strategy is to increase awareness of the issue with an invitation to collaborate before the issue morphs into a crisis.
Understanding Stakeholder Dynamics
ADVERSARIAL (Active – Non Supportive) | ADVOCATE (Active – Supportive) |
APATHETIC (Inactive – Non Supportive) | DORMANT(Inactive – Supportive) |
Public Relations in Organisation/Stakeholder Dialogue
Public Relations is the art and science of building relationships. Public Relations engender 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
Usually, the multi-disciplinary nature of Public Relations as seen from the above classification, help to advance Multi-Stakeholder Dialogue which in turn enhance trust between the different groups which has a stake in an organisation and helps in the sharing of information and institutional knowledge through bringing diverse community together to build consensus around complex, multifaceted and in most cases, divisive issues.
Expectation from Relationships
Successful organisations identify some of the constituent elements of operational, social and environmental stewardship, and assess their significance in the large corporate context. This forms the basis of organisational policy. Organisational policy therefore mirrors a host of expectations from the organisation’s stakeholder communities. Below are some of these expectations:
Employees / Potential Employees
• Career Opportunities
• Competitive
• Remuneration
• Good Management
a. Customers
• Trustworthy
• Good/Successful Products
b. Distribution / Channel Partners
• Attract Customers
• Make Sales
c. Regulators
• Ethical / Compliant Operator
d. Communities
• Philanthropy
• Good Corporate Citizenship
PART 2: Agitations from Oil-Producing Communities and the Oil Industry Reality
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’d’état. 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.
Background of the 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.
Nature of the Problem
a. Environmental Pollution
Oil exploration activities led to the flaring of dangerous gases unchecked and Oil spills which led to the pollution of farm-lands and water-ways, which affected the People’s source of livelihood.
b. Community Relations
There was a dearth of Community Relations in the local community where these Oil 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
c. Business Continuity
Government, more or less, abandoned the oil producing communities as Oil was 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.
Fall-Outs from the Problem
a. Isaac Adaka Boro’s Peoples Liberation Army - A failed cessation bid in the late sixties, this was an early warning signal.
b. Ken Saro-Wiwa’s Movement for the Survival of Ogoni People (MOSOP) - An Anti-Environmental Degradation movement which got to the attention of the world, led to the withdrawal of Shell from Ogoni Land in 1993 and eventually caused the death of the protagonist
c. Ansari Dokubo’s Niger Delta People's Volunteer Force (NDPVF) - A militant Resource Control Movement which started after Government’s bombardment of Odi and has crystallized into an organised movement which regularly captures and holds expatriate oil workers hostage
PART 3: Public Relations Challenges: The Shell/Ogoni Affair
PR and a Changing Business 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 scheme" 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.
Public Relations 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.
Public Relations: An Advocate for Good or Bad?
Public Relations hold 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
PART 4: Crisis Management: The Shell/Ogoni Situation 1992 - 1995
Background
To protest against the pollution of their environment and perceived injustices by Shell and the Nigerian government, the Ogoni people founded the Movement for the Survival of Ogoni People in 1992, under the leadership of the Nigerian Playwright, Ken Saro-Wiwa.
In January 1993, Ogoni people began a mass struggle against Shell. This struggle snowballed into a crisis of unprecedented dimension leading to:
a. The withdrawal of Shell from Ogoniland
b. The killing of the Ogoni four - Edward Kobani, Albert Badey, Theophilus Orage and Sam Orage
c. And later the killing of the Ogoni nine - Ken Saro-Wiwa, Saturday Dobee, Nordu Eawo, Daniel Gbooko, Paul Levera, Felix Nuate, Baribor Bera, Barinem Kiobel, and John Kpuine who were executed by hanging in 1995 by the military government of General Sani Abacha.
What Constitutes a 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 creates 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 imposes a need for organisations to communicate quickly, accurately and skillfully with a number of important groups.
Dimensions of a Crisis
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
Types of Crises
a. Financial Crisis
Short term liquidity or cash flow problems; and long term bankruptcy problems
b. Public Relations Crisis
Negative publicity that could adversely affect the success of a company
c. Strategic Crisis
Changes in the business environment that call the viability of the company into question
What is Crisis Management?
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.
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.
Crisis Planning
Crisis Management is usually neglected by many organisations until 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.
PR and Crisis Management
Public Relations is an anticipatory practice which attempt to foresee events, trends and issues which may develop to disrupt important relationships. Crisis precipitates a break-down in relationship because it disrupts the normal flow of interaction between an institution and its stakeholders. Since Public Relations manage 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.
What is Crisis Communication?
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
Shell’s Mistakes
- Shell initially pretended as if nothing was happening
- They reacted to the crisis situation after it had gone public.
- They relied on the goodwill they had built with the Government and local Chiefs.
- They distance themselves from the media.
- They were reactive to the information MOSOP was releasing and not proactive.
- Shell spoke above their audience by speaking only with the Policy makers and not the aggrieved Community.
- They assume that truth always conquer lies.
- They ignore the feelings of their host Community and address issues only.
- They avoided the crowd and use third parties and written statements only.
- Shell did the same things again and again and expected positive results.
What Shell Should Have Done
- Build a Crisis Communication Team.
- Identify Spokespersons.
- Train Spokesperson.
- Establish Communications Protocol.
- Identify the most crucial Stakeholders.
- Decide on Communication methods.
- Anticipate issues likely to arise from Crisis.
- Assess the Crisis situation
- Develop holding statements.
- Identify key messages
- Deploy strategy
- Obtain feed-back
- Be open to criticism
- Fine-tune strategy based on feed-back and criticism
- Empathise with victims, not just focus on the issues
- Where crisis emanated from a dispute, be ready to negotiate
- Act to resolve the issues
- Give information on steps taken to resolve the issues
Lessons Learned
Don’ts | Do’s |
1. Don’t make the media the only means of communicating with your crucial publics. | Communicate directly with your most important audience. |
2. Don’t direct all your efforts at the external targets only. | Remember that your employees are a critical audience. |
3. Don’t operate in ignorance of the Law. | Do integrate Legal and PR strategies |
4. Don’t say “no comments” if you haven’t had a chance to review the case. | Say “I’ll very much like to comment but I don’t have the facts yet.” You may also request the inquirer to fax or e-mail the details to you. |
5. Don’t threaten to sue the media; it may escalate the crisis because most media organisations enjoy being sued. It may result in a sensational hit for them. | Seek the understanding of the media by showing empathy and a willingness to reverse the situation. |
6. Don’t assume you know how to talk to the media. | Get media trained. |
7. Don’t depend on others to tell your story. | Consider becoming you own publisher by posting messages on the crisis on your web-site. |
Conclusion
While it may be said that the Shell Ogoni affair happened so suddenly and given its unprecedented nature actually tested Shell’s management and operational abilities, it is pertinent to note that crises are usually sudden and unusual occurrences which sometimes casts a dark spot on the reason for being of an organisation as well as destroy the crucial relationship which the organisation must forge in order to attain and sustain its corporate objective.
The question persists – what should be the reason for being of an organisation? Should it merely be defined in terms of profits and the ability to meet basic obligations? Or should it take on a social and environmental hue as opposed to the purely mercantilist and survivalist shade in which most organisation seeks to create and subsist within the social context? Should organisations share in the hopes and aspiration of the social milieu in which they finds themselves?
These questions are at the heart of the Shell-Ogoni struggle as we observe the sudden eruption of tension between business and its social context. This tension gradually over time, unknown to the higher echelons of the Shell operating in London, gathered momentum and surreptitiously acquired force unimaginable and creating ripples beyond the immediate confines of the encounter and affecting the global business interest of Shell.
Bolaji Okusaga is the Managing Director of The Quadrant Company (Public Relations), Lagos – Nigeria.
