Will shuffling the deck deal BP a better hand?

Along with cleaning up the catastrophic oil spill, BP has to clean up its toxic corporate culture.

Just over a month ago, on 20 June, I predicted that BP would have to remove Tony Hayward, its hapless CEO, if it was to have any chance of rebuilding its reputation after the deadly accident on its Deepwater Horizon platform and the consequent catastrophic oil spill in the Gulf of Mexico. Despite BP’s share price rebounding by five percent on news the other day that he was being moved from the top job, I’m now wondering if even the departure of Terrible Tony, as British tabloids dubbed him, will be enough to save the world’s fourth largest company from bankruptcy.

To be sure, many companies have managed to rebound from the brink, even after major environmental disasters. For example the Exxon Valdez oil spill in Alaska more than 20 years ago did not sink the parent company – indeed it has become one of the largest and most successful energy companies in the world.* But commitment and hard work are necessary to repair organizational reputations. Companies that have been through disaster, particularly ones for which they have been culpable – not just responsible, need to demonstrate by their actions that they have changed, that they have put in place strategies and operational procedures to ensure history does not repeat itself – or, at least, is much less likely to recur.

That’s what the public will be looking for from BP. A shuffling of its management team may not be sufficient to satisfy an American public whose patience has been shredded by an uncaring corporate giant. They rightly expect a fair and ethical response from BP.

What is the corporate culture?

The real question for that public – particularly those from the Gulf States directly affected by the oil spill and who have lost their very livelihoods - is how much of the cynical response was the fault of BP’s bumbling CEO and how much flowed from a corporate culture that has been corrupted to its core. And, if the latter, the question is: can it be fixed?

Irrespective of the technical aspects of managing an oil leak 1,500 metres under the sea, most commentators agree that BP managed the communications of the Deepwater Horizon crisis very poorly indeed. The company has been accused of arrogance, stonewalling and flat-out obfuscation. BP’s communications with all stakeholders across the board -- with the US government and regulators, with the media, and most importantly with the American public -- were off the mark from the very beginning.

Sure, Tony Hayward made a fair hash of it. This CEO was undoubtedly a communications department’s worst nightmare. He seemed to suffer from terminal foot-in-mouth disease, breaking every principle of crisis communications. He blamed his business partners for the accident. He called the worst oil spill in American history “relatively tiny”. And then there was his heartless comment that “There’s no one who wants this over more than I do. I want my life back”, when 11 lives had been lost in the initial accident and countless people of the Gulf States were losing their livelihoods.

Hayward seemed to be doing more harm for British-US relations than anyone since the American Revolution, as the US media started referring to BP as British Petroleum – a name it had not used for more than a decade.

It was interesting to read Jeremy Warner’s commentary in The Telegraph after Hayward’s departure had been announced. He asked whether Hayward had been a good CEO even before this accident. Hayward, after all, had long been held in high regard by business analysts and other members of the CEO club in the UK for turning BP around by getting it to focus on health and safety, operational efficiency, and profitability since he took the top job in 2007. Warner pointed out that Hayward “was not as highly rated and lauded internally at BP as is generally made out”.

I thought some bright PR spark had come up with the idea to “leak” this in order to deflect criticism from the company. Hayward – who was undoubtedly an appalling communicator – is now a convenient scapegoat.

But it seems the real problems with the poor handling of the BP crisis lay at the core of the company’s culture, despite rumoursabout Hayward’s leadership now that he is gone.

Keep in mind that when Hayward took over in 2007 BP was already reeling from two deadly accidents at its Texas City, Texas, refinery. Yet since then BP was cited by the US’s Occupational Safety and Health Administration (OSHA) as responsible for more than 97 percent of safety violations in the country’s oil refineries. A deputy assistant secretary of OSHA, Jordan Barab, concluded that "BP has a serious, systemic safety problem in their company."

Toxic Tony's toxic subordinates

Others, including MercatorNet’s Carolyn Moynihan, have reported extensively on the safety breaches and disregard for proper procedure on the Deepwater Horizon. Suffice it to say, OSHA had grounds for concern about the cavalier attitude of BP. If Hayward was concerned with safety, his focus had failed to permeate the organization.

Likewise, the company’s callous responses to the crisis cannot all be laid at Toxic Tony’s feet. Whose idea was it to handout US$5,000 compensation to the people of the Gulf provided they signed a legal waiver against further claims? Who obfuscated the numbers on the amount of oil leaking into the Gulf? Who was the bright spark who came up with a $50 million TV advertising campaign to say BP would “make it right” even while good people of the Gulf were losing their businesses, and even while BP still planned to pay quarterly dividends of $10.5 billion to shareholders?

I wonder if it was the same bright spark who decided to purchase the term “oil spill” from key search engines so that the top result would be a link to BP’s home page. Now that’s what I call an anti-social media strategy.

BP’s PR strategy seemed to be going from bad to worse. It tried to shut down a parody Twitter account (BPGlobalPR), which resulted in the account’s followers jumping to 188,000 over night.

Next BP issued a statement saying the company was “not aware of any reason” which caused its share price to collapse.

Then it emerged that BP (and other oil companies) had elaborate plans in their Gulf of Mexico emergency response procedures to protect the walrus – an animal that has not been sighted in the Gulf since the last Ice Age.

And then, as recently as 22 July, BP admitted it had been photoshopping images of the spill so it would appear less severe.

As one who has worked on the teams managing many a crisis, I know the work is often done in smoke-filled back rooms. In this crisis I had to wonder what BP’s PR department might have been smoking to be making basic -- even bizarre -- mistakes like these.

Joking aside, these mistakes highlight a dangerous corporate culture at the heart of BP. It’s ironic that the company’s logo – that green and yellow flower you see on their products and service stations – is called the “Helios”, which for the Ancient Greeks personified the sun. It’s meant to demonstrate BP’s green credentials. However, it might henceforth bring to mind the image of Icarus whose pride carried him too close to the sun.

Similarly, hubris has brought BP to earth.

The company has clearly lost touch with reality. The safety of its own employees appears to be a long buried concern. Compassion for the people of the Gulf has been wanting throughout the crisis. BP’s response to the very crisis has epitomized its concern with profit over people and planet.

Can BP survive? Can it repair its reputation?

Possibly. But it’s going to take some doing. The company needs to get back in touch with reality. It will need to demonstrate that its concern for people and planet are more than just fine words. BP will need to commit to its espoused principles. The change at the top might help, so long as the new boy has not been imbued with same tonic as Toxic Tony.

Alistair Nicholas is a reputation management consultant based in Beijing, China. His company, AC Capital Strategic Consulting, has provided crisis management advice and services to numerous companies operating in China. Alistair blogs on reputation management at Off The Record.

* Note: Alistair Nicholas is a consultant to ExxonMobil in China.

This article is published by Alistair Nicholas and MercatorNet.com under a Creative Commons licence. You may republish it or translate it free of charge with attribution for non-commercial purposes following these guidelines. If you teach at a university we ask that your department make a donation. Commercial media must contact us for permission and fees. Some articles on this site are published under different terms.