Shell's Business Recovery Strategy: Helping the Gulf Rebuild
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Holmes Report

Shell's Business Recovery Strategy: Helping the Gulf Rebuild

As the company systematically restored its Gulf operations, it recognized its future success ultimately depended on the health of the overall region and sought to align its business strategy with the wider needs of the community.

Paul Holmes

With $250 to $300 million in damages caused by Hurricane Katrina and 70 percent of its U.S. oil and gas production in the Gulf of Mexico, Shell  faced a significant business recovery challenge. Yet as the company systematically restored its Gulf operations, it recognized its future success ultimately depended on the health of the overall region and sought to align its business strategy with the wider needs of the community.

To address those needs, Shell looked to employees for guidance. Local employees revealed in a survey that they believed that in order for New Orleans to recover, Shell must step up and lead the way. The company asked employees to react to a wide range of potential programs. The result was an impressive assortment of endeavors that touch core areas of recovery: security; community rebuilding; education; workforce development; and environmental preservation.

The combination of this employee feedback with the company’s business priorities created a multifaceted, strategic campaign to impact the most critical aspects of regional revival. The Shell Coming Home Campaign was an action-oriented program designed to demonstrate Shell’s commitment to the safety and well being of its employees, the city of New Orleans, and its people. It was coordinated out of New Orleans by a team from across the company to ensure cross business execution—assisted by Washington, D.C., public affairs firm Dittus Communications, a unit of FD—enhancing employee engagement, demonstrating respect for people, and environmental responsibility.

The communications objectives of the CHC directly align with Shell’s ultimate objective of efficient business recovery: an immediate effort to provide for employee needs; investment in community recovery; and a long-term commitment to the community’s future to retain and attract the workforce and support workforce development.

The guiding strategy was to do the right thing for the right reason, supported by two approaches: first, employee engagement, leveraging their opinions, knowledge, expertise and capabilities of employees to assist in recovery efforts; and second, public private partnerships to address those projects that did not touch Shell’s core competencies,.

The CHC team utilized a strategic, purpose driven matrix to evaluate project proposals against campaign objectives to ensure maximum efficiency and benefit. CHC communications activities harnessed the power of high-impact actions through community events, internal communications, and earned and paid media to foster employee and community goodwill.

Shell’s boldest action was its first: the decision to return to New Orleans. But employment is only part of employees’ well-being, so Shell executed programs to augment their recovery:

It spent $45 million in hurricane-related employee assistance programs. Employees have taken advantage of more than $28 million in interest-free loans offered by Shell and $17 million in employee housing assistance.

The company also celebrated its return to One Shell Square. For employees, Shell’s return was a step toward closure. Shell staged a Louisiana-style celebration for employees and business, civic, and political leaders. Local businesses supplied signage, t-shirts, giveaways, food, and music, pumping cash directly into struggling small businesses.

But for many, addressing the aftermath of the hurricanes has been intensely personal. To help employees, Shell developed an employee ambassador grant program. The grants allowed employees to support rebuilding in their own neighborhoods, mirroring Shell’s broader community-wide efforts. Grants have been used for activities such as restoring day care centers and preschools, gutting and rebuilding homes, and replacing library books.

The company also helped fund housing for emergency responders. The vast majority (85 percent) of employees surveyed considered public safety a priority, but about 60 percent of the police force was separated from family more than six months after the storm. Shell’s donation to the New Orleans Police & Justice Foundation helped address the need for first responder housing.

Shell also helped to provide permanent volunteer housing in St. Bernard and Plaquemines parishes. On June 1, the start of hurricane season, FEMA began dismantling the camps that had housed and fed 40,000 volunteers, so Shell funded permanent volunteer housing.

Katrina and Rita also caused $1 billion worth of damage to the Louisiana fishing industry. Yet one year after the storms, no federal funds had made it to the fishermen. The Louisiana Seafood Promotion & Marketing Board identified the lack of ice-making capacity as a significant obstacle to revival. Shell donated funds for icehouses to serve Cameron, St. Bernard, Plaquemines, Orleans, and St. Tammany parishes.

In addition, Shell partnered with the Kennedy School of Government to support the revitalization of the Broadmoor neighborhood, which mirrors the demographics of New Orleans. Shell sponsored several Kennedy interns to live and work in Broadmoor, and collaboration with residents produced a comprehensive rebuilding plan that serves as a model for other neighborhood rebuilding programs

Despite its positive economic impact on the city, Jazz Fest 2006 was in jeopardy. The city, surrounding areas, and event venue were heavily damaged, musicians and volunteers had been displaced, and there was uncertainty about whether or not the event could attract sponsors. Shell became the first presenting sponsor. Equally important, 220 Shell employees volunteered, traveling from as far as Houston to fill the gap left by relocated New Orleans residents. Jazz Fest allowed the city to demonstrate that it was open for tourists, who came from across the globe.

To help keep solid jobs in Louisiana, Shell collaborated with LSU to enhance recruiting activities in areas central to Shell’s business model, including research and environmental and coastal studies. The company also contributed to a workforce development project to support the transition from college to work.

An initiative called Café Reconcile was brought to the attention of the CHC team by a Shell employee. It provides at-risk youth with job skills training for the hospitality industry, an important driver of the New Orleans economy. Following Katrina, its mission expanded to include training and job placement in the construction trades critical to rebuilding. Shell funded this expansion and has placed a number of Café Reconcile graduates within Shell.

Finally, Shell supported a four-year science and engineering curriculum at McMain Unified School, one of only two public high schools in operation five months after Katrina. The company installed state-of-the-art computer laboratories at McMain and established an ongoing public-private partnership with New Orleans Public Schools and the National Science Resource Center to review and improve the quality of math and science education.

The employee engagement effort meant that almost 60 percent of local Shell employees accessed nearly $600,000 in ambassador grants; 98 percent of local employees now have a more favorable impression of Shell based on the Coming Home Campaign; and 69 percent of local employees understand Shell’s New Orleans strategy.

As for the community recovery effort, Shell employees logged 22,000 volunteer hours; Plaquemines Parish can now host 1,275 volunteers a week; the Jazz Fest generated between $200 and $300 million in revenue for the city of New Orleans; and 60 tons of ice per day is being produced for the coastal fishing industry, up from less than just one ton in June of 2006.

The campaign also had the desired impact on workforce retention. Almost all (99 percent) local Shell employees surveyed indicated a commitment to stay with Shell. The company exceeded its 2006 LSU recruitment goal by 170 percent, and LSU was the top recruiting university in the nation for Shell, and 36 percent of metro New Orleans residents polled said they were much more likely to apply for a job at Shell

According to a University of New Orleans analysis, between late 2005 and all of 2006, Shell contributions to New Orleans recovery account for more than $1 billion in primary and secondary spending. Local and state revenues rose by more than $13 million, and Shell employees volunteered more than $800,000 worth of time.

The campaign resulted in more than 1,160 media hits and 132 million impressions, with the result that 71 percent of the New Orleans population has a favorable view of Shell, higher than the rating for most of its competitors. New Orleans opinion elites, meanwhile, rate Shell as the most socially responsible oil and energy company in the region.

As for the company’s own recovery efforts, 97 percent of employees were back at work by October 2005, and downstream operations were online within two weeks. Three damaged offshore platforms were at full production within nine weeks. The Mars Platform, responsible for 5 percent of the Gulf’s oil and gas production, was online ahead of schedule. And offshore production was at 75 percent capacity by the end of 2005.


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