The Bumbler From BP
How CEO Tony Hayward is making the Gulf oil-spill disaster even worse.
Also in Slate, we want to hear your ideas for containing the oil spill.
This hasn't been a good few weeks for Tony Hayward, the chief executive officer of BP. In the weeks since the huge oil spill in the Gulf began, he has struck an occasionally Churchillian tone: "We are going to defend the beaches," he proclaimed. "We will fix this." But the British leader he most calls to mind is Ethelred the Unready.
For CEOs in crisis, the playbook includes a proper appreciation of the gravity of the situation, a sense of calm urgency, and confidence-building rhetoric backed by confidence-building action. So far, Hayward is zero for three. From the outset, there's been a sense that Hayward wasn't quite prepared for this and didn't quite grasp what is at stake. The Wall Street Journal reported that Hayward "admitted that the oil giant had not the technology available to stop the leak. He also said in hindsight, it was 'probably true' that BP should have done more to prepare for such an emergency."
As the spill worsened, Hayward fretted that he and BP were its victims. "What the hell have we done to deserve this?" he reportedly told fellow executives. Of course, Hayward isn't the victim here. The sea life, the sea itself, the employees who died, the fishermen who are losing their livelihoods, the tourism industry, responsible drillers—they're the victims. Hayward should have been asking himself: What the hell did they do to deserve this? And what am I going to do to fix it?
The private grumbling has been matched by public bumbling. Hayward has used unfortunate metaphors. "We will only win this if we can win the hearts and minds of the local community," he said, apparently unaware that "hearts and minds" is a phrase forever identified with the debacle of the Vietnam War. And in a moment of exquisitely bad taste, Hayward said: "Apollo 13 did not stop the space program. The Air France airplane that fell out of the sky off of Brazil did not stop the aviation industry." Among the many crucial differences between Apollo 13 and this oil spill: Apollo 13 turned out to be a feel-good triumph of engineering, since the astronauts came home alive. The BP spill is simply an epic fail.
At other times, Hayward sounds like a Monty Python character, with understatement that would be comic if it weren't so tragic. Here's how he recently explained BP's response: "It was a bit bumpy to get it going. We made a few little mistakes early on." As this Financial Times article noted, Hayward was proud of the containment effort. "Almost nothing has escaped," Hayward said. And here's the best yet, from the Guardian: "The Gulf of Mexico is a very big ocean. The amount of volume of oil and dispersant we are putting into it is tiny in relation to the total water volume." Yes, it's just a flesh wound!
Unfortunately for BP, the irregular flow of data is undermining Hayward's case. The New York Times reported on Saturday: "Scientists are finding enormous oil plumes in the deep waters of the Gulf of Mexico, including one as large as 10 miles long, 3 miles wide, and 300 feet thick in spots. The discovery is fresh evidence that the leak from the broken undersea well could be substantially worse than estimates that the government and BP have given." But, the Times noted, "BP has resisted entreaties from scientists that they be allowed to use sophisticated instruments at the ocean floor that would give a far more accurate picture of how much oil is really gushing from the well." Meanwhile, in an interview with the BBC, Hayward was saying: "it's not possible to measure the flow from the leak."
Hayward's sangfroid is impressive. Asked if he felt insecure in his position, he responded. "I don't at the moment. That of course may change." I wouldn't expect him to be storming up and down the barrier islands like Canute, trying to keep the tides away. But by any measure, this has been a monstrous cock-up. Because of its poor planning, BP is wasting resources belonging to its shareholders and to the earth, it's destroying people's livelihoods, and it's poisoning the atmosphere for the industry. Sure, you would expect any CEO worth his golden parachute to try to downplay the damage of such an incident. But listening to Hayward, you don't have much of a sense that he grips how much damage this incident and the poor response to it have inflicted on all of BP's stakeholders.
For some companies, a crisis can turn out to be an opportunity. If BP had managed to shut down the leak immediately, it would have gone a long way toward limiting its reputational and financial damage. But as it drags on, the spill reinforces the popular notion that BP has a poor safety record in North America. And all the while, its CEO comes off as glib, wistful, self-involved, and foolish.
Daniel Gross is the Moneybox columnist for Slate and the business columnist for Newsweek. You can e-mail him at firstname.lastname@example.org and follow him on Twitter. His latest book, Dumb Money: How Our Greatest Financial Minds Bankrupted the Nation, has just been published in paperback.