Crisis comms: Shell says sorry

Almost every multinational organisation has addressed its crisis comms strategy in the last fortnight.

Corporate giants like McDonald’s, Apple, and Netflix all announced full or partial suspensions of business in Russia.

Current estimates sit at more than 120 companies exiting the country.

Oil and gas giant Shell was one of the first energy firms to lay out its plans to leave.

A company statement deplored the ‘loss of life’ brought on by the ‘senseless act of military aggression’.

But at the weekend, it emerged Shell had bought discounted Russian oil.

And the firm was forced to address their decision.

Let’s examine how they handled the communication.

Shell’s decision

It was on March 1 that Shell announced a permanent move out of Russia.

Rather than a pause in operations, this was final.

As well as abandoning a lucrative stake in a liquid natural gas plant, Shell also ended their involvement in the controversial Nord Stream 2 gas pipeline.

Reuters estimated that Shell’s exit from the Russian market could cost them around $3 billion.

Two of their major projects in the country, Sakhalin 2 and Salym, contributed $700 million to last year’s earnings.

So this was a big step, and one which was welcomed.

That was until it emerged Shell had bought 100,000 tons of Russian crude oil at a discount.

The Wall Street Journal reported they paid $28.50 below the global benchmark price, the widest discount on record.

On March 5, Ukraine’s Foreign Minister tweeted his outrage.

Shell hit back the same day, initially defending their decision.

In a written statement on social media, they said:

“Cargoes from alternative sources would not have arrived in time to avoid disruptions to market supply.

But the backlash to the purchase was strong, and the company issued a further statement three days later.

Shell’s apology

Before we get to their apology, let me share our technique for when something’s gone wrong in business.

It’s the Three R’s: Regret, Reason, Remedy.

Here’s how it works.

Regret: say you’re sorry.

Reason: explain what happened.

Remedy: explain what you’re doing about it.

So let’s see how Shell’s apology measures up to our Three R’s.

Below is an excerpt from the statement the firm posted on Tuesday, attributed to CEO Ben van Beurden.

“We are acutely aware that our decision last week to purchase a cargo of Russian crude oil to be refined into products like petrol and diesel – despite being made with security of supplies at the forefront of our thinking – was not the right one and we are sorry.

“As we have already said, we will commit profits from the limited, remaining amounts of Russian oil we will process to a dedicated fund. We will work with aid partners and humanitarian agencies over the coming days and weeks to determine where the monies from this fund are best placed to alleviate the terrible consequences that this war is having on the people of Ukraine.

“Our actions to date have been guided by continuous discussions with governments about the need to disentangle society from Russian energy flows, while maintaining energy supplies. Threats today to stop pipeline flows to Europe further illustrate the difficult choices and potential consequences we face as we try to do this. Following government statements this week, I want to set out our position clearly.”

This is a good example of Regret, Reason, Remedy.

Regret: ‘Sorry’ is in the first sentence of the first paragraph.

Although there’s an argument for starting the statement with: “We’re sorry that our decision last week was the wrong one.” 

Reason: There are multiple reasons included for the decision.

These include security, government discussions, and maintaining energy supplies.

Remedy: They’re committing profits from the oil to a dedicated aid fund.

The statement itself is also in simple language and clearly lays out Shell’s position.

Shell’s crisis comms

Their decision to pull out of Russia will cost Shell billions of dollars.

Their decision to buy discounted Russian oil days after decrying the war will cost them reputationally.

Apologising was absolutely the right thing to do.

Admitting it was the wrong call is also correct.

The glaring error is buying the oil in the first place.

On our crisis management courses, we talk about incidents and attitudes.

Bad incidents happen.

Your attitude when reacting to it is what counts.

As we’ve seen already this year to varying degrees with Raith Rovers, British energy firms, and Novak Djokovic.

When something goes wrong, you’ve got to ensure your crisis comms strategy includes what we’ve seen with Shell.

Start by saying sorry. 

Colin Stone is Communications Lead at Pink Elephant.

You can read more about him here.

Photos in Crisis Comms: Shell says sorry blog by Loïc Manegarium & Katie Godowski from Pexels, Alek S. on Foter and Pink Elephant Communications.