Positive Power of Principled Profit
Volume 2, Number 9—May, 2005

Positive Power Spotlight: PNM: Accepting Responsibility When Things Go Wrong

A gas main leaks...a building explodes...and the gas company investigates and announces, "yes, it was our fault." Is this today's America? Yes!

Here's one company that understands it's better to tell the truth, accept responsibility, settle the claims, and build a reputation as a company that doesn't duck out on a problem, but tries to make it right.

The company was Public Service Company of New Mexico (PNM), the largest public utility in that state. The accident occurred on the busiest street in Santa Fe (the state capital), injuring two women and trapping one of them for 90 minutes. And live TV coverage from helicopters made this a very big local story.

PMN executives Frederick Bermudez, director of corporate communications, and Don Brown, manager of external communications, presented the incident and the company's response to the Public Relations Society of America's October 2004 conference.

PMN avoided the usual responses of letting the lawyers control the discourse, clamming up, and finger pointing instead of accepting responsibility.

Instead, the company immediately replaced the faulty pipe, launched its own investigation, cooperated with the authorities, reassured its customers, and made sure all interactions with the victims and their families were compassionate. As a result, what could have easily been a public relations disaster turned into a demonstration of the company's role as a dependable, caring neighbor.

It turned out that the company's technicians had actually flagged that pipe as a potential problem, but the report fell through the cracks. So, according to Bermudez and Brown, the company not only held a press conference to admit that the accident could have been prevented and announce the various settlements with affected parties, but also used this incident as a catalyst for a system-wide audit and extensive preventive measures. In the press conference, the company's vice president for operations began his statement saying, "We regret what happened." The company supplied a full media kit with graphics, video, samples of old and replacement pipe, and so forth.

And there was remarkably little negative fallout. The press conference got a day of coverage, much of it focusing on the company message point that the leak was caused by a hole in the pipe "the size of a grain of rice." Because the company was forthright and cooperative, its explanations and assurances were accepted at face value--a luxury not afforded to executives who cheat or hide.

Once again, the ethical path is good for business.

Another Recommended Book: "Wise Moves: 60 Quick Tips to Improve Your Position in Life & Business" by George Ludwig (Chicago: CRL Publishing Group, 2004)

This is a quick read, broken up into short "lessons"--the last 20 of which are Ludwig's riffs on quotes from the famous, from George Bernard Shaw to Oprah. While it's aimed primarily at salespeople, the book has some wonderful things to say about many of the principles I discuss in this newsletter and in my own book, Principled Pro fit: Marketing That Puts People First: integrity, honesty, how to be an effective listener. The story he tells about Gandhi's integrity (I won't spoil the surprise) is worth the whole book right there.

If you'd like to buy this book, please follow this link to buy from a BookSense independent bookseller:

http://www.booksense.com/index.jsp?affiliateId=FrugalFun

or this link to buy from Amazon:

http://www.amazon.com/exec/obidos/ASIN/0974022306/ref=nosim/globalartstravel (paperback)

or this link for an autographed copy directly from the author: