BP: Lessons for Business
Stephen Carver
Steve Macaulay
The BP oil spill crisis has provoked plenty of controversy; and also
there are plenty of lessons to be learnt from this. To examine this
issue is Steve Carver.
Now Steve, you have got plenty of oil industry experience, project
management experience and you have seen a lot of crises over the
years and how they are handled. What are your reflections on this
BP oil spills crisis?
Stephen Carver
OK, I would like to answer your question on two levels.
The first one is almost the simple one; it is the thing that is in the
newspapers at the moment: Did it go right? No it was a complete
disaster, they did everything wrong according to the book; his [Tony
Hayward’s] appalling quotes – a small spill, the little people, that
came from the Chairman and of course, I want my life back. And
then to compound it by getting onto a yacht over the weekend. You
thought is this guy crazy? And the other thing that occurred to me
was what the hell were his PR people doing to allow him to get that
far down the line? And certainly BP have done it all wrong and it
has cost them half their company’s capitalisation.
So, that is the easy side in many ways. They should have done some
basic crisis management and I am astounded that a Chairman could
have got to that position in the company without sufficient training.
Steve Macaulay
Now, if I look at the other side of the coin, about managing a major
project, what went wrong there? Was it serious errors? Was it just
not making an assessment of risk properly? Just what was it?
Stephen Carver
I think they are in frontier land with the Gulf of Mexico and the deep
water that they are in. And it is quite interesting because this is
when you start to go to a slightly deeper level – forgive the pun – but
actually start to say well, why were they drilling at that depth at the
frontiers of technology without a relief well? The Canadians
wouldn’t allow it, most sensible companies wouldn’t allow it.
Why were BP doing it? Were they reckless? Well actually no, they
were doing it to the American standards. And so the question that
we now need to ask is what on earth were the Americans doing
allowing any oil company to drill that deep, with that technology,
without a relief well? Because if the first well goes and the BOP
doesn’t work you are going to end up exactly with the disaster that
they had.
Steve Macaulay
So let’s get a bit deeper, a bit broader and reflect on this.
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Stephen Carver
Stephen Carver
Yes, and let’s almost park the crisis management; there was a basic
failing, it should be put right and I am sure BP will learn and others,
of course, will learn.
I think the thing that started making me think in a different way was
when I watched poor Mr Haywood going in front of Congress. And,
OK, it was a 90 minute humiliation ritual and they all queued up to
kick him and I think that played well internally, but to the rest of the
world, I think we all thought well what is this about? And the
picture that went into my mind, it was like a teenager going through
pangs of adolescence saying that the world wasn’t fair. It was like
the American angst about oil and the fact they had got so little of it,
and they are forced to drill in these appalling conditions to get it in
their own waters because they are falling out with everybody else
means that hey, the Americans are beginning to feel that the era of
cheap oil is over and they will be at the mercy perhaps of people that
they don’t like. And their frustration and anger basically was
vented, in this case, on British Petroleum.
I was appalled when Obama came up with that because it hasn’t
been referred to as British Petroleum – and he knows it – for 15
years. It wasn’t a slip of the tongue; it was deliberate agitation.
Now, when one goes one step lower than that, one says well, why
did Obama do it? Now, I am in two minds on this one at the
moment which is either (a) he was very foolish and was playing very
short term stakes for a xenophobic audience, which means that
basically he is going from statesman to rather unpleasant politician
in a single step and that just strikes me as so un-Obama like.
The other one is that he is playing a longer game. And when you
look at what he said, he did actually start to slip in this thing about
the era of cheap oil is perhaps over. So perhaps he is using the
whole thing as a pivot point to actually move the American psyche
from cheap oil to a realisation that they have got to play a different
game.
Steve Macaulay
So is the message that businesses have got to play in the political arena
and they have jolly well got to wise up on that?
Stephen Carver
Well again, I see this as a sea change in the way that we are going to
deal with crises like this. We saw it with the Toyota one; the
Americans went crazy over Toyotas and they demanded the CEO
come over from Japan and they did the same ritual kicking.
But people, I think, especially after the BP one, are saying hang on a
minute – is this really the way to go forward? If a large company
makes a mistake, what we are going to do is wheel in the CEO and
turn it into a circus of small people just kicking them around and
then demand resignations. Because where does that lead us in the
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Stephen Carver
long term? Well, if you had sense at all you would look at that job
and think I don’t want to do that; I don’t want to ever be put in that
position. What I am now finding – and I work in a lot of industries –
is a lot of very good people who should be going for CEO level are
looking at the job and thinking I don’t want to be a Tony Hayward; I
won’t actually go there. And of course the only people who are now
saying hey, I really want that job, perhaps we have got to look at
their mental state, because if we are not careful you end up with
psychopaths at the top which is not a good outcome. We need to
learn to deal with these crises in better way. Yes, the technical side
not making gaffes; but perhaps looking at the broader context.
Steve Macaulay
So, big business in particular and CEOs; you have got to think deeper,
you have got to think harder?
Stephen Carver
Yes – and broader. And I think that not only applies to business, I think
it is the population as well.
Steve Macaulay
Stephen, thank you
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