Sunday, 9 January 2011

Brent Spar: ditching defence for dialogue

In the summer of 1996, Shell Centre was crawling with newly hired PR men and “expert” consultants. The headquarters of the Anglo-Dutch oil major was on crisis alert. Twelve months previously, a handful of Greenpeace activists had clambered onboard Shell’s Brent Spar oil storage buoy in the North Sea. The action sparked a standoff that was to wake the world to a new player: the activist NGO.

I was a Shell intern that summer, occupying a little noticed seat in public affairs. In the thick-carpeted offices above, the powers-that-be were sitting on a report from New York’s Stern School of Business. It contained a detailed cost analysis of the still unresolved Brent Spar fiasco. The final figure ended with lots of zeros, let’s put it that way. The troubled execs didn’t want a repeat.

When the Greenpeace campaign first hit, Shell’s response had been typical for the time. ‘Decide, Act, Defend’ (D.A.D) ran the motto of the day. The sensible, technical-minded folk at Shell (remember, this is a company dominated by logical engineers) had evaluated the options and made their decision. Legally, operationally, financially, even environmentally, sinking the buoy in the North Sea ticked all the necessary boxes. Now was the time to act. So a few mad (this was pre-political correctness; ‘misinformed’, let’s say) ‘greens’ took issue. So what? Shell had seen worse in its then ninety-year history. And when it came to defending, its army of PR pros and legal whizzes presented a formidable force.

What Shell hadn’t realised was that the rules of the game had changed. To be fair, at that stage, no-one really had. The internet was just taking off. Modern media was toying with satellite-fed imagery. 24-hour news channels were starting. The anti-globalisation movement was beginning to mobilise. Brent Spar was the “tipping point”, as a senior Shell spokesperson puts it in a detailed analysis of the case in Ethical Corporation’s recent ‘Classic Case Studies’.

For two months, Shell slugged it out the old way. Reason, it figured, would eventually win out. It didn’t. The oil major tried challenging Greenpeace on the science, notably the claim that Brent Spar would be sunk with 5,500 tonnes of oil on board (a mere 10 turned out to be closer to the truth). It succeeded in winning an apology from the campaign group. But by then the battle was lost. The TV footage had already been broadcast. The anti-Shell editorials already published. And the boycotts had begun. As Greenpeace’s membership department was becoming overrun, Shell realised it had to change tack.

Negotiations to decide an alternative solution kicked off. Those concluded almost three years later. By the time the fated buoy was tugged into a Norwegian harbour and dismantled for use in a ferry terminal, Shell was unrecognisable. D.A.D had been ditched. It was now all about D.D.A (Dialogue, Decide, Act). The significance was more than some jiggling in the letters. Shell was accepting the importance on ‘dialogue’. It was coming down from its ivory tower and talking to concerned parties. And not just friendly parties. Critics too. In doing so, Shell was admitting for that their voice was legitimate. It was also breaking new ground.

The idea had a persuasive internal logic to it: namely, if you could identify “issues” (as the in-house jargon had it then) early on, then you could nip them in the bud. Future Brent Spars were that way supposed to be avoided. The command to ‘Defend’ could also, theoretically, be consigned to the dustbin (pardon, recycling bin).

It sounds easy. In practice, it’s far from it. Identifying issues requires going out to speak to your ‘stakeholders’. But which ones? And how? And about what? In the early days, dialogue was a very structured affair; lots of focus groups and the like. Those still play a role. Now in the age of social media, however, approaches are changing quickly (as is companies’ ability to control the dialogue process).

In Brent Spar, Shell learned some important lessons. Not ignoring hostile voices is probably the most important. Being more open and transparent comes a close second. To its credit, the oil major did its best to adapt. It became one of the first big proponents of triple-bottom line thinking (‘People, Planet Profit’, as it coined it, with help from those experts – genuine ones, for once - at SustainAbility). Then came the ‘Tell Shell’ campaign, an early experiment in online dialogue. Next came weighty, well-meaning corporate social and environment reports. In short, Shell was out there testing and toying with the management theories and tools that were collectively becoming branded as “corporate social responsibility”.

Over the last decade and a half, stakeholder expectations have changed dramatically. So has their power to voice them. Those shifts lie at the root of corporate efforts to become more accountable, transparent and engaged. The Brent Spar affair meant Shell had to learn faster than most. Yet the lessons are equally relevant to all. 

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