Crisis Management: the case of BP

Tony Hayward

Tony Hayward got fired for not knowing how to behave under crisis. (Well, it is not clear that he actually was fired. He is no longer doing the job before the oil spell happened. Rumors said he did it voluntarily to get his life back.)

I am sure he is a competent manager, no one rises up to his level, running a 265-billion dollar company, without some serious skills — crisis management not part of the repertoire.

First, get engaged. Senior management are trained to think long-term, on vision, strategy, long-term, talents, messaging, etc. The best of them delegate effectively and have processes and lieutenants to handle operational level tasks. For crisis, though, the big guy needs to set up a war room, staff it with the highest level personnel whose sole responsibility is to handle the situation, and command directly. This is necessary since the main job is to grant exceptions to rules and processes that himself set up. Otherwise, the system can only follow existing processes and that just won’t work for crisis.

Second, guide with righteousness, not laws or economy. Too many would advise him on the corporate liability or fiduciary responsibilities. The instinct would be to avoid the accountability. But the liability and damages are inevitable and only public perception can possibly be a positive influence. A transcendent stance, at morality level, can turn things around. Losses and law suits will come and can be dealt with. Money will be spent no matter what. How would history remember it?

Get emotional. The only time Tony Hayward showed any emotion was when he wanted his life back. He appeared a cold-blooded corporate man on TV and no one believed when he promised that he will fix it. Crisis require leadership. No one follows when there is no personal connection. Mr. Hayward, by not showing any emotion, proved that he was the wrong person in charge.

President Obama behaved similarly in the beginning and quickly corrected himself. Guess there are better advisors in the White House than BP headquarters.

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