Last March, I blogged on “Page Turner” about the challenges and opportunities for Tokyo Electric Power Company (TEPCO) as it tried to deal with the early days of its crisis in Japan. We wanted to see how well they did in seizing the opportunities I offered up back then as we launch our new Page Society website. Here is my update:

Overall, TEPCO has not faired well: it announced a loss of $7.4 billion, the company’s bond rating has been cut to junk, and TEPCO has struggled to communicate with some very angry shareholders. Add to this the fatal radiation levels still being found in its plants, and you have what everyone would most certainly consider a major crisis.

But let’s take a closer look at how they did in terms of the opportunities we discussed back in March:

1. Opportunity #1: Seize the moment. Having visited Japan in June and observed what has been happening closely, I think it’s obvious that the Japanese people are willing to do whatever it takes to get their country back on its feet and sacrifice in a variety of ways. But, TEPCO did nothing to capitalize on this moment. Imagine how valuable collaboration with the Japanese public would have been?

2. Opportunity #2: Gain credibility. The opportunity to make lemonade when you get lemons is one of the most obvious things to think about in a crisis. We talked about how TEPCO could have presented itself as a trustworthy company by communicating honestly with the Japanese public through the media. Instead, the company’s communications tended to be overly optimistic to instill confidence rather than getting all of the facts out to a public hungry for any information.

3. Opportunity #3: Tell it all and tell it fast. In mid-April, over a month after the crisis began, TEPCO announced a plan for shutting down the nuclear reactors – and by doing so implicitly admitted that their previous plan was not going to work. Two months after the crisis, the company announced that it believed three reactors melted down in the early days of the crisis. This late acknowledgement of what experts had believed all along was another example of the lack of timely disclosure from TEPCO throughout the crisis. And, according to an article in the New York Times, in one of the most damning admissions, nuclear regulators said in early June that inspectors had found telltale evidence of reactor meltdowns, a day after the tsunami — but did not tell the public for nearly three months.

4. Opportunity #4: To work with government to solve the crisis. The government has also struggled throughout the crisis, with the Prime Minister being forced to resign over guidelines that allow children doses of radiation equal to those of adult nuclear workers. Distrust between the Prime Minister, TEPCO, and nuclear regulators who were perceived to be in collusion with TEPCO led to an inability to respond optimally to the crisis. The Prime Minister’s office felt they were not receiving accurate information from TEPCO and that further they could not trust the officials there.

5. Opportunity #5: To learn from your mistakes. A series of articles exposing previous issues in the regulatory and safety records of TEPCO’s plants has continued to erode confidence in the company and regulators throughout the crisis. Clearly TEPCO had not learned from its mistakes prior to the crisis.

If TEPCO were a student in one of my classes, I would have to give it an F in terms of actual performance and effort. Crises are inevitable, but not seeing one as an opportunity to do the right thing and show what kind of an organization you really are is just a shame.

Professor Paul A. Argenti
Tuck School of Business at Dartmouth