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Erika James
Scholar

Erika James

Erika James is the Bank of America Associate Research Professor of Business Administration at UVA's Darden School and co-author of the 2010 book, Leading Under Pressure.

Think before you react

Q: President Obama finally meets this week with BP chief Tony Hayward on the Gulf oil spill. From a leadership perspective, which man has been the less effective in his handling of the crisis? What should he have done differently?

It really does not matter whether President Obama or BP CEO Tony Hayward have been the least effective in the handling of the Gulf Coast oil spill. What matters is that we need both men to demonstrate excellent leadership during this crisis and unfortunately both have fallen short in that regard. Crises are marked by time constraints, ambiguity, remarkably unusual circumstances, limited or conflicting information, and a need for immediate and decisive action; not to mention anxious stakeholders, naïve observers, and aggressive media who all want information and answers. Given these pressures, the demands of a leader in crisis can be unique and require a different set of abilities than what would typically be expected during times of relative calm. Both President Obama and Hayward have demonstrated capability in non-crisis situations, but it is not yet clear that they have what it takes to lead under the intense pressure and scrutiny that crises pose.

For all the criticism that Obama has received over his lack of emotion over the spill and his inability to stop the flow of oil, let's keep in mind two things: First, it was precisely his ability to remain calm under pressure during the financial crisis that contributed to his election. Remaining calm and levelheaded is precisely the temperament that is needed in a crisis. Second, neither Obama nor his administration has the financial resources or the expertise to stop the spill, so the focus of the criticism in this regard is misplaced. Obama and his administration must work collaboratively to both stop the spill and execute a clean-up effort. Having just returned from a day of meetings with people at the National Incident Command Center for the Deepwater Horizon Oil Spill, I have seen first hand this collaboration in progress.

What concerns me more about Obama's handling of the oil spill is that he is reacting too much to the external pressures of various interest groups without seemingly first have devised a vision for the short and long-term future of oil exploration and alternative energy and a concrete strategy for achieving that vision. To develop that strategy requires that he have frank conversations with oil executives, policy makers, local government, environmental groups and other key stakeholders. The impact of his decisions on deep water drilling will have immeasurable economic impact in this country and around the world and even temporary decisions like the moratorium on deep water drilling in the gulf seemed to have been made without the benefit of adequate perspective taking.

As for Hayward, the PR mistakes he personally has made are legendary and have resulted in the perception of extremely poor leadership. As a result, he no longer has the credibility to speak empathically about the spill despite his admissions of BP's responsibility and accountability. The oil industry is rife with engineers, and communication is generally not their focus nor is it necessarily a core competency. Although Hayward needed to be visible in the aftermath of the crisis it is not always the case that the CEO is the best person to put forward to the media, nor is it always in the best interest of crisis resolution to have the CEO's time absorbed in PR activities. My criticism with Hayward is the apparent lack of leadership in the decision-making that led to the initial oil rig explosion and in the failure to identify and integrate key lessons from previous tragic events BP has experienced (e.g. the 2005 Texas City, TX refinery explosion). How many more catastrophic events will it take before Hayward and BP's leadership team takes seriously the importance of being a learning organization?

By Erika James

 |  June 15, 2010; 12:22 PM ET
Category:  Crisis leadership Save & Share:  Send E-mail   Facebook   Twitter   Digg   Yahoo Buzz   Del.icio.us   StumbleUpon   Technorati  
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