While it remains an open question if or to what degree BP acted recklessly and unethically in its management of the Deepwater Horizon well, it doesn’t look good. But putting those crucial issues, as well as the utter devastation to life, lives, and livlihoods in the gulf aside for a moment, we’d like to take a few moments to consider BP’s challenges regarding Brand Resilience and Stakeholder-driven ethics.

Resilience

Resilience is a key driver of sustainable peak performance. More than conventional strength, it is the ability to maintain forward momentum and even flourish not simply despite, but because of significant challenges. We identify seven Pillars of Resilience: Navigating Uncertainty, Meaning-Making, Relation and Connection, Forgiveness and Reconciliation, Brand Expression, Self-Command, and Dynamic Balance.  

With a plunging stock price, crisis management teams a-scrambling, congressional drubbing, possible criminal investigations, and media speculation about BP’s long term survival prospects as an independent going concern, BP’s future is certainly unclear. While it’s best for any organization to build the pillars of resilience proactively, it seems certain that if BP hopes to flourish, it will need to use this experience as an opportunity to seek to grow first in resilience. In the real world, strength requires and even builds of resilience as much or even more than standard business measures.

Ethics

For the sake of discussion, let’s remain agnostic about alleged or real ethical lapses on the part of BP. This muc is certain: we see our Stakeholder-driven Ethics framework, in which ethics are what stakeholders say they are, clearly supported and vindicated by BP’s recent behavior and experience. For better or worse, right or wrong, BP has seen customers, shareholders, strategic partners, two branches of federal  government (so far), the media, and the court of public opinion all pile on to make BP public enemy number one. While a vast number of other wells remain functioning as intended, and the extent to which the decisions that led to the gulf disaster  were driven by a few individuals or a corporate culture (possibly abetted by insufficient or compromised government involvement) remains unclear, the fact remains that just one disaster, driven by specific decisions, is enough to undermine BP’s reputation, despite years of pro-environmental brand advertising. 

Strong dividends and basic humanity are not enough. Regulation and engineering standards are not enough. In order to practice not only environmental sustainability, but sustainable performance, BP and all other organizations need both an embedded stakeholder-driven ethic and a deep foundation of brand resilience.

Ignore this at your peril.

There’s more to it, but this is a start.

I just read a fascinating article in the New York Times about Dell’s flawed decision making regarding computers with leaky electrical components.  (http://www.nytimes.com/2010/06/29/technology/29dell.html?src=me&ref=general)

Internal documents strongly suggest that Dell knew the computers were defective, yet they consciously decided to “not proactively bring problems to the attention of customers”, and to “emphasize uncertainty”.  My favorite part of the article has to be Dell telling the math department at the University of Texas that all of their computers were failing at once because UT had forced them to do difficult math calculations.

Dell’s strategy of controlling their supply chain has been a favorite of business school case studies for years.  Unfortunately, it appears that Dell’s laser like focus on delivering low-cost computers became the singular driving force in the organization, divorced from any embedded sense of ethical behavior, brand management, or visionary leadership.

This lapse in judgement will cost Dell billions in repair costs, brand value, and litigation.   Unfortunately, vacuums that exist with regards to ethics and leadership often represent hidden costs.  As a result, it is all to easy for seemingly successful organizations to operate under the direction of ethically flawed leadership and strategy, as long as current financial returns are positive.    The NFL’s refusal to acknowledge the long-term impact of head injuries, or to a lesser extent, Apple’s current denial of reception issues with it’s newest Iphone are examples of financially successful organizations obscuring the truth to succeed in the marketplace.

Leaders of every organization should take the time to define their company’s Dynamic Essence, and make sure that it can be applied across the entire organization ethically, with long-term market success in mind.  If the unique driving force for your organization does not explicitly preclude ethically questionable behaviors, or worse,  it requires explicitly deceiving your customers, rest assured that the truth will leak,  faster than the components inside Dell’s faulty computers.