Public Outrage Risk

Yesterday when discussing the woes that befell Railtrack, I mentioned the phrase “Public Outrage Risk”. I felt a little expansion was in order.

Public Outrage Risk is something that happens to corporations when they become embroiled in incidents that capture the public imagination to their detriment. For example, Shell suffered this when it wanted to dispose of an oil rig at sea. Exxon suffered it following the Valdez oil spill. Sometimes of course, the outrage is quite proper. However, the problem is that reality and facts can have little to do with it. Particularly when the tabloid press get hold of a story.

The newspapers love public outrage – it sells newspapers. Consequently they fuel it, fanning the flames, poking the wound, increasing the level of outrage, while screaming righteous indignation from their red topped headlines. In the December following the Ladbroke Grove tragedy, the Daily Mirror offered monetary incentives to anyone who could tell them the whereabouts of Christmas parties that had Railtrack personnel in attendance. Consequently Railtrack made sure that any events planned were cancelled.

Public outrage is corrosive, eating away at the confidence – both within and without – of an organisation. Share prices plummet and can if unchecked, lead to bankruptcy. Of course, this might be deserved. But, equally, it might not – the press don’t much care either way. A company failure is just another story to them. Where the company cannot go bankrupt – as was the case with Railtrack – then something else happens. It withers, yet clings on. It becomes a national joke that is fashionable to knock. Yet, again, the reality is harsh and uncompromising. Following the incident at Ladbroke Grove, colleagues of mine were verbally and physically abused while travelling to the incident to help with the rescue and recovery. That they had nothing to do with the failures leading to the incident was irrelevant to those who read and believed the tabloid press.

The longer term implications are that people will not want to work for the organisation. Railtrack needed signallers, engineers, designers and project managers. It needed talented people to make it work. It certainly needed these people if it was to ever recover. Yet public outrage hampers recruitment – who would want to work for such an organisation? Certainly many of us who already did, no longer wanted to.

One of the shining moments of my redundancy from Railtrack’s successor; Network Rail was the realisation that I would no longer feel ashamed to admit who I worked for. A sad, damning indictment.