Thursday, June 10, 2010

The Court of Public Opinion Works

Often I am asked, "Why should I worry about failing to manage information properly?" My first response is that if you are an information intensive business in an information economy then failing to harness the lifeblood of the organization is like giving away a competitive advantage, while squandering corporate assets. Next I say if you get nailed for information mismanagement, you can get whacked seriously by court, regulator and worse of all, the court of public opinion. By the way, for public companies the court of public opinion works on Wall Street as well as Main Street. Well some wise guys then say either aloud or internally, “forgetaboutit”. Brilliant I say. Lets take a look at how forgetful our public is and just how sleepy their eyes really are.

About seven week ago, 11 hard working Americans were killed in an explosion aboard the Deep Horizon that lead to the worst gas gusher leak experienced in America. BTW-my heart goes out to all those families that can't escape their loss as they are reminded of this tragedy all day long on every media outlet. Irrespective of who ultimately is at fault, BP is definitely getting whacked in so many kinds of ways already. Let’s take a look at some costs so far. BP has spent about 1 billion dollars on clean up already. The lawsuits and fines will be rolling in real soon. But wait—that is not the real pain. Remember the court of public opinion. People have told me they drive by BP stations to give their money to another gas station. OK-7 weeks ago they likely didn’t make that decision and we will see how BP is impacted next quarter and next year. How about Wall Street? Well here is where the hurt really hurts and the blood flows freely. Since the explosion, BP has lost about 50% of its value in the market or about 82 BILLION DOLLARS. Now that is serious dough.

Next time you wonder if destroying evidence plays bad on Wall Street or Main Street say the following—“I remember Andersen Accounting and they are out of business because they failed to properly manage information and I like my job.”