Update: Final paragraphs on "U.K. Speaks Out in Defense of BP" added, 6/10/10, 4 pm
Some incredibly dumb things have come out of his mouth. The president of the United States says he would have fired him by now. BP's stock has tanked to a 13-year low. And he'll forever be remembered for having presided over the worst environmental disaster in U.S. history.
But is BP's Tony Hayward a bad CEO? Has he handled the gulf oil spill crisis poorly? I don't think so. I may be the only person on the planet with that opinion, aside from Hayward's family, but I really don't think so.
Frankly, I think Hayward has found himself in the mother of all no-win situations.
From an environmental standpoint, the word disaster falls short. It breaks all of our hearts to see those beautiful birds and fish covered in oil. The effects on the gulf coast's business and ecology will be felt for years, if not decades. And I don't need underwater video or a definition of "plume" to know that there's some really messed up stuff going on under the surface.
And while it's indeed BP's mess, there's plenty of blame to go around. The Deepwater Horizon platform was built by Hyundai Heavy Industries, is owned by Transocean, and is leased to BP. And the U.S. Department of the Interior exempted BP's drilling operation from a detailed environmental impact study or a detailed blowout plan. I'm not saying it isn't BP's and Hayward's responsibility. But in BP's Gulf Oil Spill: The Perils of Cutting Corners, I saw this as more of an oil industry problem than BP's alone.
As for Hayward's now famous gaffe: "The Gulf of Mexico is a very big ocean --," I'm sure he'd love a do-over on that one. But when he said, "I would like my life back," he wasn't whining about it, although that's how it sounds out of context. He was implying that he and his entire company have skin in the game. I chalk that one up to politically correct, "sound-bite hungry sharks smelling blood in the water" media coverage.
Talk about no-win situations, how about the gross politicization of the disaster and the effect it's having on BP's stock?
Desperately trying to ensure that Hayward is remembered as the bad guy instead of him, President Barack Obama lambasted BP's Hayward on NBC's Today show, saying, "He wouldn't be working for me after any of those statements." Obama went on to explain why he hadn't bothered meeting with Hayward:
"I have not spoken to him directly. Here's the reason. Because my experience is, when you talk to a guy like a BP CEO, he's gonna say all the right things to me. I'm not interested in words. I'm interested in actions."Washington even criticized BP's spending on an ad campaign. Sure, Hayward's performance in the ad is flat, but what do you expect him to do, let Washington and the media have its way with BP's already decimated brand?
Of course, all that political rhetoric, not to mention pressuring BP to cut its shareholder dividend and a criminal investigation by the Justice Department, has indeed kept Hayward and BP in the limelight by pushing its share price to a 13-year low. We're talking a $100 billion hit to a whole slew of pension funds in the U.K. and the U.S.
And instead of coming to BP's defense, British Prime Minister David Cameron stood squarely behind his U.S. ally, according to Reuters: "This is an environmental catastrophe. BP needs to do everything it can to deal with the situation, and the U.K. government stands ready to help. I completely understand the U.S. government's frustration."
In terms of crisis management, I'd hate to be a Monday morning quarterback on a deal this big and hairy, so I won't. But I will say this: He's been out in front, which is good. He's been optimistic, which I think is good but almost nobody agrees. And he's tried to control the flow of information, which is not so good. Anyway, I've seen worse.
Then there's Hayward himself, a rig geologist who joined BP out of school and spent the next 15 years running various exploration operations all over Europe, Asia, and South America. In 1997, he returned to London and a series of executive positions, finally landing the top job in 2007.
Bottom line: this guy worked his tail off to get where his is, and he's not what I would call a career executive. Oil exploration runs in his blood. And don't forget, CEOs of U.K. companies, even $300 billion oil giants, don't make the megabucks that their U.S. counterparts make. We're talking a few million bucks in annual compensation, that's it.
And now he's got the future of the entire Gulf of Mexico resting on his shoulders and the entire world calling for his head. It's a raw deal, if you ask me. BP's board should give him a vote of confidence, the British PM should get a backbone, and Washington should focus on the environment and transparency, not rhetoric and retribution.
As for Tony Hayward, I think he's a good man and a good CEO in a no-win situation. No more, no less.
Update: From the Wall Street Journal:
U.K. Speaks Out in Defense of BPImage courtesy BP
British officials offer first public signs of support for company in face of heightened criticism from U.S.
The British government took a first and tentative step Thursday to intervene in the row between oil giant BP PLC and President Barack Obama, asking the U.S. to "remember the economic value BP brings to people in Britain and America."