You Can't Make This Stuff Up
"I'd like my life back."
With those five whiny words at the height of one of the planet's worst environmental crises, one of the world's most successful CEOs cracked publicly under the strain of crisis-induced stress. That pathetic plaint forever sealed his reputation as a seemingly unfeeling, gaffe-prone dunderhead whose glamorous, jet-setting lifestyle was inconvenienced by the tragic loss of 11 lives during a massive oil rig explosion, the resulting runaway oil spill in the Gulf of Mexico, and the heartbreaking loss of livelihoods for countless thousands of area families—all caused by his company, his minions, and their combined sins. That one ill-chosen utterance, in full view of the world's media, at once thrust former BP head Tony Hayward into the pantheon of such other insensitive, kindred luminaries as Marie ("Let them eat cake") Antoinette and Emperor ("Hand me my fiddle") Nero. Did Hayward fiddle as the Gulf of Mexico was engulfed in oil and flames? In a manner of speaking: he went sailing on his luxury yacht half a world away, while the ashes of his self-immolated image were blown out to sea.
What kind of crisis communications message was Hayward intending to convey to the world? How does such a successful and accomplished executive crumble so completely on the world stage of a megacrisis? Was it ineptitude, fear, or lack of crisis communications training that allowed him to turn a worldwide crisis into a "What about me?" moment?
But Hayward—a complete novice in the art of crisis communications—was on a roll and was only just getting started. In fact, it was nearly impossible to stop him. He later "guesstimated" publicly that the spill was averaging a mere 5,000 barrels a day ("A guesstimate is a guesstimate," he truculently sniveled in the face of demands for more accurate numbers) when the actual number was closer to 60,000 barrels a day, and he further pooh-poohed the environmental impact of the soon to be millions of barrels of oil awash in the Gulf as "very, very modest." He also predicted that the spill would be "tiny" compared to the size of the ocean, conveniently overlooking the fact that prevailing winds and unrelenting tides were driving the oil toward previously pristine shores, once-rich fishing areas, family-oriented recreational beaches, fragile marine and bird sanctuaries, and delicately balanced ecosystems. When the well was capped for good in August 2010 and the flow was permanently stemmed—more than three full and agonizing months after the drilling rig explosion—official government figures put the total spill at nearly five million barrels, or some 200 million gallons, making it the worst offshore oil disaster in U.S. history and completely dwarfing the previous record holder, the Exxon Valdez, which struck a reef in Prince William Sound, Alaska.
"Very, very modest," indeed.
Meanwhile, testifying on live television before a congressional investigative committee, Hayward responded petulantly to a U.S. representative who wanted to know what happened at the explosion of the deepwater oil-drilling platform, saying, "I don't know; I wasn't there."
In response to direct congressional questions seeking more information and less obfuscation, his testimony included such cover-your-ass gems as, "I'm not a drilling engineer" or "actually qualified" in these matters, "I'm not a cement engineer," and "I'm not an oceanographic scientist." It was becoming all too clear that Hayward was not a lot of things, including a competent crisis communicator. For someone who had served for years as head of oil exploration and production at BP before ultimately becoming CEO, Hayward went out of his way to portray himself as ignorant of any aspect of drilling operations. He even testified before a disbelieving Congress that he had "no prior knowledge of the drilling of this well, none whatsoever."
But an angry Representative Henry Waxman, chairman of the House Energy and Commerce Committee, accused Hayward of blatant "stonewalling" and charged, "You have consistently ducked and evaded our questions."
But even feigned ignorance is no excuse. If you're the CEO, you're paid to know. And in Hayward's case, he was paid plenty.
As a contributory consequence of all of the foregoing missteps, the stock value of BP, then the world's fourth-largest company, soon plummeted into an abyss deeper than its Deepwater Horizon oil-drilling rig. The beleaguered company lost $17 billion just in the second quarter of 2010, on top of the more than $32 billion it was forced to set aside for spill-related costs. At one point, BP's market value declined 40 percent and the company was forced to sell off valuable assets to help pay its mounting costs.
The passage of time hasn't helped the oil giant recover: in the second quarter of 2012, BP reported an additional loss of $1.4 billion. A drop in the oil- slick ocean to a deep-pocket company like BP, maybe, but a disturbing trend indicating perhaps a deeper crisis.
But the silver lining for Mr. Hayward was that his fervent wish ultimately was granted: he got his life back. His board of directors removed him from office ... although he was exiled to Russia.
The only relevant question was: what took them so long?
Even as he was exiting the oil-slick stage, the unrepentant Hayward still didn't know when to shut up, publicly bellyaching in a farewell interview with the Wall Street Journal, "I became a villain for doing the right thing."
Shortly thereafter, upon the completion of the company's own internal investigation, he led an official corporate chorus of finger-pointing at other companies involved in the construction and maintenance of the rig. BP, by now the consummate poster child for failed crisis communications, fared little better in its corporate doublespeak, calling the accident "a complex and interlinked series of mechanical failures, human judgments, engineering design, operational implementation and team interfaces."
But not our fault.
Then, in a sweeping settlement agreement with the U.S. government toward the end of 2012, BP agreed to pay a $4.5 billion fine, pleaded guilty to 11 felony counts related to the deaths of the workers on the oil rig, and pleaded guilty to one additional count of obstruction of Congress.
Let's be clear: effective crisis communications would not have stemmed the flow of oil or cash, but it would have saved the company's image, its stock value, and its CEO and helped it survive this crisis with its reputation intact. Poor crisis management and even worse crisis communications have left the company reviled around the world and facing a mountain of litigation and cleanup costs that will take years and years and billions and billions of dollars to overcome.
Rehabilitating its badly tarnished image will take much longer.
The long, sorrowful travails of BP (formerly British Petroleum) are by now well known throughout the world. What is neither well known nor well understood is how such a successful company could have self-imploded on such a grand and public scale. No, I am not referring to the company's oil-rig disaster; I am talking about its total meltdown in its woeful crisis communications efforts. An army of skilled surgeons would not have been able to cure its epidemic outbreak of nonstop foot-in-mouth disease, led by its feckless leader. It is permissible to ask without sounding snarky: seriously, what was he thinking, and why didn't anyone stop him?
Is this critique an unfair and undeserved "bashing" of a hapless business leader? Not at all. In today's inst(Continues…)
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