Work Matters

Tag: BP

  • Why BP’s New CEO Is Lucky — and the BP Board Is Shrewd

    Earlier in the week, I was interviewed by Michael Krasny at KQED (our local public radio station) about BP's new CEO Robert Dudley and the more general question of CEO accountability.  You can listen to the interview here if you like.  To get ready for the interview, I took a bit of time to read up on the infamous outgoing CEO Tony Hayward — who even as he was departing, continued to stick his foot deep down his throat.  As The New York Times reports, Hayward admitted that it was time for new leadership at BP, but then emphasized how hard he had worked to improve safety standards at BP, but “sometimes you step off the pavement and get hit by a bus.”  I was surprised that this comment did not get more play, as one of the worst things that a leader can do is to convey that they have no control and no responsibility when things go wrong.   As is well-documented, this is just one of many misguided comments by Mr. Hayward, his most infamous being his comment that he wanted his life back.

    As I was reading such reports, and thinking about research on the romance of leadership, executive succession, and the illusion and reality of CEO influence, I realized three things.

    The first, as my headline says, is that the new CEO Bob Dudley is mighty lucky to follow someone like Mr. Hayward.  Indeed, because of the power of psychological contrast, the more that Mr. Hayward comes across as an insensitive buffoon, the better a scapegoat that Mr. Hayward becomes — and the better that Mr. Dudley looks in contrast.  If I were Bob Dudley, I would be delighted with Mr. Hayward's final gift — the comment about the bus — as it makes it appear that BP's leadership has been repaired by his promotion to the position. The fact that Dudley is from the U.S. (Louisiana in fact), has been focused on managing the fiasco and thus spent a lot of time in the Gulf, and has made no major gaffs so far, all look even better when contrasted with Mr. Hayward's English accent (because confidence in the U.S. market is so important), the relatively little time that he his spent in Gulf and of course his many gaffs.( As an example, look this  attack on Hayward by Harvard's Rosabeth Moss Kanter)

    There is an interesting lesson here, a broader one, for every boss who is offered a new job.  If you are lucky, or perhaps strategic, following damaged goods like Mr. Hayward will make things a lot easier (at least at first) than if you follow a widely admired boss.  This is also a pattern that I commented on in The No Asshole Rule — where quite a few bosses explained to me that it was great to take a job where the last boss was a certified asshole because, in comparison, they seemed to civilized. 

    The second thing I realized was that, although calls for Hayward's resignation have been ringing for months, the BP board was very shrewd to leave Mr. Hayward in the position and to let him take all the slings and arrows on behalf of the company and his colleagues.  He was beat-up by Obama, the U.S. Congress, and many many others until the leak was (apparently) stopped.  By doing so, Mr. Hayward served as an excellent scapegoat.  If Mr. Dudley had stepped in before the leak was stopped, he would have taken heat that would have undermined his honeymoon period and, by association, BP's credibility.   But since Dudley was in charge in Gulf operations, the "symbolic repair" appears credible even if it is left unsaid:  "It was Hayward's fault, so he is gone, and the guy who fixed it is now in charge."  So I have to give the board credit for playing a lousy hand pretty well. (I would also note that if you look at the level of responsibility that the board is still giving Mr. Hayward, it appears they have faith in his technical skill, if not necessarily his ability to deal with press and public — which further suggests that this is necessary scapegoating rather than a complete loss of confidence in his abilities).

    The third thing I realized is that all these theatrics are an interesting sideshow that may distract BP insiders and outsiders from fixing the real problems.  As is well-documented, especially when a company is large, old, and complex, leaders almost always get far more credit and blame than they deserve.  As such, although it appears that BP's board has been wise in terms of handling CEO succession, the real question is if BP can ever change from what is a culture that has had ethical and safety problems for a long time — apparently worse than other major oil companies.   That will be the real test of Bob Dudley's leadership and the board's skill.

    Although should add, as I emphasize in Good Boss, Bad Boss, that if a leader can create the illusion that he or she is charge and has the power to make positive organizational changes, the confidence and effort that it inspires can help bring about such changes. A great example is George Washington — check-out David McCullough's 1776.  In other words, sometimes such theatrics are pure bullshit (like BP's "Beyond Petroleum" campaign), but if a leader is persistent and authentic, a symbolic change can be a powerful step toward real change.  There are lot more oil wells in our oceans, so for everyone's sake, I hope that the symbolic change at BP leads to real changes.

    As a final comment, although I have vented plenty of anger at BP, at the same time, I have some sympathy for BP's board, Mr. Dudley, and most people who work for BP, as they are in a very difficult spot because of both the the stigma and the difficulty of what they are trying to accomplish.  I would not want to be in their position right now, and finding a way out of this mess isn't going to be easy.

    P.S.  Tom Davenport — a brilliant knowledge management  guy — just put a great post over at HBR called "If Only BP Knew Now What BP Knew Then."  Tom makes a compelling case that BP's narrow focus on speed and profit helped destroy an emerging safety culture.  I was especially intrigued by this link to a Financial Times post on BP's narrow focus, which ends by reporting BP's motto ion recent years "every dollar counts, every seat counts."  A seat is an employee at BP.  Surely, that is true in every company, but if you are just hyper-focused on every penny, it turns attention away from other things, like safety.

  • BP Improves Their Rhetoric

    I wrote a post last week taking BP to task for the heartless CYA language in the giant ads they were taking out in The New York Times, Wall Street Journal, and elsewhere.  I lamented that there wasn't even a hint of human compassion, that they were taking responsibility in the most mealy mouth way possible, and that the dull march through the facts conveyed that will they were taking steps to stop the leak and clean-up the mess, their cold corporate heart wasn't in it.  I made a comment that it seemed to be written by lawyers, not caring people. On second thought, that is unfair to lawyers as many have far for common-sense and humanity than the narrowly focused and emotionally tone deaf people who wrote those ads.

    I was taken to task on this blog and at Psychology Today where I reposted my BP comments for,among other things, being naive to expect anything else.  One reader chastised me here:

    "Of course
    BP's language is legalistic, with every public word chosen carefully.
    There will be lawsuits, and lawyers will scrutinize their every
    utterance over the last century for ammo. Would you really expect any
    public admission of culpability from them as the vultures are gathering?"

    Comments like above one are, in my view, correct in that we would expect them to be careful about what they say because of all the lawsuits.  But to me — and this is a difference between a good lawyer and a bad one, by the way –a  good lawyer and the leaders they advise balance litigation concerns with other business issues, such as the hits in the press and stock market the firm is taking and (to be crass) what will enable the current management survive the firestorm of blame.  As I said in my last post, there are plenty of examples of leaders and firms that have effectively struck this balance and I reject the argument that purely legalistic language or even the absolute best language to protect the company during future litigation is always the business decision.  Indeed, I believe that BP's numerous indications of arrogance and coldness have attracted and motivated more vultures and the legalistic language, finger-pointing, and dull language have made things worse. 

    While I will refrain from commenting on the reality of what they are doing (it is hard to know, and frankly, I remain unimpressed based on the disputed and twisted facts I do encounter about BP).  But I do give them credit for finally getting the compassion thing right and other elements required to come across as actual caring human beings in their big ad today in The New York Times. 

    The new headline is "We Will Make This Right"   Compare it to the old headline in the ad last week, which sounded like a dull corporate memo from a cold-hearted creep: "Gulf of Mexico Oil Spill Response" — it did not even say whose response.  In the new ad, while I bet their more narrow-minded lawyers are squirming at the language, there are statements that suggest compassion, accepting responsibility for fixing things in less mealy-mouthed language, and a commitment to pay for it (well, they may sue others to get the others, but saying that taxpayers won't pay for the clean-up is smart if it is true).  Examples include "Stopping the leak will be a major step, but only start.  We know our responsibility goes much further."   And although they stop short of quite admitting blame, we finally see some compassion here;  "The spill and hardship endured by Gulf families and businesses should never have happened."   And they end well:  "You expect us to make this right. We will." 

    Note that I am being very careful to withhold judgment about the reality here, and the fact that it has taken BP many weeks to use language that suggests a hint of humanity suggests to me that this is not their first instinct.  But better late than never, at least from a PR standpoint.

    Also, there is another message beyond the humanity that comes through in this ad that is quite consistent with research on effective leadership when the shit hits the fan: They are talking about things they have done and will do to take control of the situation — one of the topics I discuss in chapter 2 of Good Boss, Bad Boss, which is on how the best bosses persuade others they are in charge. If you are in a leadership position, a big part of your job is convincing people that you are wrestling to get control over even difficult events and are making progress — that there is a link between what you and your people are doing and good things that are happening and that will happen.  BP started-out pointing so many fingers at others that they didn't seem to quite grasp this point, but seem to be slowly getting it as well. Of course, if they never stop the leak, their credibility will evaporate, but it does seem like their sustained period of failure to do so may have finally taught them to express some compassion and wisdom — or to be more cynical, perhaps they are so desperate that they are pretending to be caring and compassionate as a last resort!

    There is a lesson here for every leader who ever gets into a PR mess.  If your lawyers are only thinking of future litigation and don't grasp its importance relative to other business risks, beware of their advice. Specialists of any stripe can be dangerous when they see events only from the perspective of their narrow expertise, be they engineers, HR people, PR people, or lawyers.  But I believe lawyers are especially prone to causing such problems because they are often especially adept at arguing their point of view and trashing others.  This can be a great quality, but only when used with proper precautions and in the context of the larger business decision.

    If you are convinced by your persuasive lawyers to use legalistic and vague language, and talk like heartless people who don't care about anyone but yourselves and who are bent on pointing fingers at everyone else, it may help with the litigation down the road.  But in the intervening years, you may be fired, your organization may decline or die, and in fact, by the time those lawsuits are contested, you or your company may have ran out of money to pay your lawyers — and pay the claims against your company.   Again, a great lawyer is crucial under such conditions, but the great ones see beyond their narrow area of expertise.

  • BP: Why can’t they say they are sorry and trying to make sure it will never happen again?

    As I read The new York Times and Wall Street Journal every day, I ended-up reading BP's huge "Gulf of Mexico Oil Spill Response" ad twice today.  I suspect it was written by their legal department, as there are things it does not contain that really bug me and will bug others and — by the way, are bad crisis management, if you believe the best studies on what leaders can do to protect the reputation and long-term financial performance of their firms when the shit hits the fan (I talk about some of this research here and in links within it).

    1. There is not a hint of human compassion, it is cold, carefully crafted language. It simply lists facts, it offers no sympathy to the people who died, none to those whose livelihoods will be affected, and none about the animals who are dying.  The language is utterly without a hint of warmth or empathy for anyone.  This gives me the creeps and I believe reinforces the perception they are a cold heartless company with executives who care about no one but themselves.

    2. There is not a hint of an apology or admission of mistake.  The language is very indirect and legalistic. They say: "BP has taken full responsibility for dealing with the spill.  We are determined to do everything we can to minimize impact.  We will honor all legitimate claims."  Perhaps they can't apologize or admit error, but look at research on executives and firms that weather crises more effectively (a great example is Maple Leaf Foods, see the CEOs apology). Researchers who study errors or setbacks have shown that the problem with this strategy of pointing fingers at others and not accepting blame is that when you talk as if you are a hapless victim of a problem caused by others or by forces that no one can control (as BP seems to be doing), you also are seen as lacking the power to fix it…. it amplifies the perception that you are out of control and don't know what you are doing.

    3. Finally, and this is also consistent with research on how to deal with a crisis or failure, I see not even a hint in this statement that BP is doing everything (or anything) within its power to learn from this horrible spill so that it is unlikely to ever happen again, and if it does, so they will be able to respond more quickly and effectively next time. This kind of language and attitude is crucial for both perceptual and objective reasons.   From a perceptual standpoint, it conveys more compassion and also that all those people and animals will not have suffered in vain.   From an objective standpoint, clearly, there are many lessons from this fiasco, and any competently ran company learns from mistakes — indeed, I think all of us wonder what they might already be doing differently in their many other drilling platforms.  I think that talking about that would help them.

    There is plenty of blame to go around here, and I am sure that BP does not deserve all of it.  But I think they could handle both the optics and objective elements of this crisis far more effectively (And I wonder if in the end the lawyers' advice will cost them more money, as so many politicians and prosecutors will be motivated by their heartless response to go after them with special vehemence).

    No doubt, there are many facts I don't know about what is really happening.  But these omissions disturb me and, if you are a leader, you might want to use this as an opportunity to think about how you would handle such a PR nightmare if it hit your organization.  It is a lot cheaper and easier to learn from BP's errors than it your own.