Sunday, June 20, 2010

BP: Lessons in Leadership

On 19th June, CBS news reported that with oil still gushing into the Gulf of Mexico, 61 days since the Deepwater Horizon explosion and the death of 11 workers; Tony Hayward, the (current) CEO of BP was seen relaxing, sailing his yacht in a race around the Isle of Wight (off the south coast of England).

This is just a few days since Mr Hayward sat in front of a US congressional committee, on 17th June, where he was questioned for over five hours. Now assuming that Mr Hayward had been advised by his legal team to give one of two obligatory answers, firstly “we await the results of the investigations before rendering conclusions” and secondly, “I was not involved in the decision making process” - one has to wonder why he bothered turning up to an event that was going to make him and BP look lacklustre at best and incompetent and uncaring at worst? What was even more questionable was when asked when the investigation would be completed, Mr Hayward didn’t have an answer.

Congresswoman Betty Sutton from Ohio probably stated it best when she told Mr Hayward that his lack of answers showed a real detachment and disconnect with the situation – which Mr Hayward denied (and then went sailing two days later).

Now, there are a lot of opinions as to what is really going on and who’s to blame; and this is to be expected when one doesn’t have all the facts – but what is clear and undeniable is that this is both a human tragedy and an environmental disaster.

So where is the leadership? Can you imagine Mr Hayward’s reaction if, at a time of crisis, a director or manager of his, flippantly, told him; ‘oh, sorry boss I don’t know, I wasn’t involved in the decision making process’ or ‘I’ll render conclusions when I get results from an investigation I’m running with no dates or deadlines’. This would be tantamount to incompetence, with serious personal ramifications.

The press talk about PR disasters and BP ‘bashing’, but Mr Hayward is the CEO of a global organisation and shouldn’t have to be advised what is and isn’t good PR for himself and the organisation – if that is the case, BP should seriously look at their recruitment and succession planning policies for executive appointments. In any organisation, and especially at a time of crisis, the CEO must be seen to be leading from the front - that, surely, is what they get paid million dollar packages to do?

These issues revolve around the core principles of corporate governance (including social responsibility and business ethics), risk assessment and leadership. During his grilling in front of the congressional committee Mr Hayward stated that since he became CEO, ‘he had made safe and reliable operations his first priority – making significant changes to procedures.’ Which begs the question, what was BP’s top priority before Hayward became CEO? The true test of any organisations leadership and corporate culture is how they handle a crisis and BP, in this instance, are falling well short of setting the right example, since the image that Mr Hayward and BP are creating is that they are either oblivious to public opinion or don’t really care.

It’s been two months since the Deepwater Horizon tragedy, on 20th April, and what we need to see is visible and effective leadership. When it comes to organisations that impact the environment we are all, in some way, investors and shareholders in their future, (since their actions can significantly impact our future on this planet) – hence, the world has a right to demand answers and to see effective leadership 60 days after the event.

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