BP and brand

Does Sebastian Mallaby have a sixth sense? Certainly the timing of his Washington Post article last week was perfect, given the turn of events for BP in Prudhoe Bay.

As Michael Jarvis summarized in his post last week, Mallaby's proposition is that firms are driven by the need to protect their brands, given that such intangibles can dominate over tangible book value. Faced with multiple leaks and extensive corrosion to its pipelines, BP shut down operations in the Bay. So is BP's choice a good example of brand protection?

Come at this from a corporate social responsibility (CSR) angle and you're likely to end up talking about competition - for resources and management attention. This type of either-or duality is the Achilles heel of CSR, as Jon Entine comments in an article from earlier this summer. The frequently used Band-Aid for this dilemma is talk of 'win-win' - but the duality remains. Entine quotes Elaine Stemberg, who instead urges discussion on 'how you conduct your business every day, every time'. Amen to that.

Looking back over the Developing Value report (PDF), there is no duality - but a single focus on what actions create value. A great CSR program or ISO 14001 certification doesn't tell me much - unless I know how it integrates into and affects core business processes. How companies achieve this in practice will be addressed in a sequel that we are planning to Developing Value - more on that in future posts.

Back to the question on BP and brand protection. Think of brand as a 'future promise' to buyers of the company (shareholders, customers), and its value becomes a product of the next step as much as those already taken. Past decisions about preventative maintenance did not bring value for sure - but the dent to the brand can be hammered back out if BP can compellingly demonstrate that the incident brought value to the company through learning, adaptation and improvement.

See also an Op-Ed in Monday's New York Times and a long commentary by Mallen Baker (no paragraph self-policing there) for further opinion on BP and brand.