Crisis: Obstacle or Opportunity?

"There cannot be a crisis next week. My schedule is already full."
- Henry Kissinger

Crises Mode

Crisis management is when an organization deals with a major unpredictable event that threatens to harm the organization, its stakeholders, or the general public. Companies can view a crisis in two ways: as an obstacle or an opportunity. Like most major companies these days, GE has suffered its own crises. From the downward spiral of the economy to being reprimanded for polluting the environment, GE has tried to turn obstacles into opportunities.

The Crisis
Like I’ve mentioned in previous blogs, GE has dumped over 1.3 million pounds of polychlorinated biphenyls or PCB’s into the Hudson River. New York State took GE to court and won, exposing GE for many years of pollution. After fighting it tooth and nail, GE was mandated to dredge the Hudson River in three locations. From 1990 to 2005, GE spent more than $122 million on public relations, lobbying and legal efforts to fight their demand to clean up the 3 locations they contaminated with PCB’s. The nation’s biggest Superfund site is a 200-mile stretch of the Hudson River, located in Upstate New York.

Covering It Up
GE’s public relations tactics were to spend one billion dollars on addressing PCB issues and launch its “Ecomagination” campaign, which I believe is a perfect example of modern day propaganda. This cleverly designed campaign was GE’s way of presenting itself to the public as an environmentally conscious business, embracing pollution free policies and “Go Green” methods. Here GE acted reactively, but it actually played out quite nicely for them. Healthy public relations enabled GE to be viewed as a strong and respected voice in the industry, and considerate about the community.

Watch this video about GE's Ecomagination campaign!!

The Aftermath
Many people disagree with the way GE responded to this crisis. Patricia Daly, coalition director of the Tri-State Coalition for Responsible Investment said the money GE spent could “have gone a long, long way in cleaning up the problem” in the Hudson, “had it not been wasted on PR, lobbying and courtroom delaying tactics.” In 2005, the EPA estimated that the dredging of toxic sediment would cost approximately $700 million by the time the project was finished. However, after an agreement was reached between GE and the state of New York, GE is only obligated for the dredging costs within the first year. Therefore the company could potentially avoid $600 million in cleanup costs, according to EPA spokesman Leo Rosales.

If It Were My Choice…
I am bias on this particular topic since it pertains to my hometown. Part of dealing with crisis management is anticipating a crisis and being prepared when one hits. Personally, I believe GE’s PR people did not anticipate this crisis or adequately research the possible environmental issues that the company might encounter. GE is a multi-national power house who produces (emphasis on produces) heavy machinery and power plants across the country. Obviously, they are going to create some sort of pollution, be that air or water. If I worked for GE I would have heavily researched how GE pollutes the environment, not just to be prepared for when a crisis occurs, but with intentions of correcting it before the crisis could hit. As the saying goes; an ounce of prevention is worth a pound of cure! In addition, I strongly agree with Patricia Daly. I would have advised GE management not to fight the court cases or the accusations. I would have told them to model the Tylenol incident and take responsibility for their actions and clean up the Hudson River. However I do believe the “Ecomagination” campaign was a great idea to boost company moral and image.

Thought I'd leave you with a laugh. Happy Thanksgiving, GEewhiz!!!