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Jeffrey Pfeffer

Jeffrey Pfeffer

Jeffrey Pfeffer is the Thomas D. Dee II Professor of Organizational Behavior at the Graduate School of Business, Stanford University, and author of the Sept. 2010 book, POWER: Why Some People Have it and Others Don’t.

Why Tony Hayward should 'never complain, never explain'

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?

Tony Hayward has done a terrible job for BP's shareholders and employees even as he has seemingly followed the conventional wisdom about dealing with disasters. That wisdom is: admit responsibility, apologize, promise to rectify any damages, and act with contrition. BP has done all that, even as its stock has lost about 40 percent of its value, its public approval ratings are in the 25 percent range, and Hayward's job is on the line. Maybe there was another way.

Legal experts will tell you that admitting blame opens up the liability floodgates. BP was not the only party involved in the spill--there was Transocean, Halliburton, and others. But Hayward decided it would fall to BP to shoulder the blame--and the costs. Research in social psychology shows that acting embarrassed or remorseful conveys less power--and results in less favorable impressions--than acting angry.

That's because people want to associate with the winning side and respect strength, and diffidence does not convey either winning or power. If companies--or people--are willing to be whipping boys, others will, not surprisingly, pile on. Which is precisely what has happened to BP.

And one other thing: BP was drilling for oil, in America's waters. They were doing what John McCain, Sarah Palin, and many others wanted: drill, baby, drill, and in the process, not only feeding our need for oil but doing it in a way that does not increase dependence on foreign governments. But the idea that BP was taking enormous risks and using its knowledge to benefit American consumers and at least part of its political elite found no voice. BP did not set its actions in context.

Contrast BP with Goldman Sachs, where the CEO, Lloyd Blankfein, never apologized for much during his many days of congressional testimony. Rather, he argued that Goldman was helping the financial markets function and that trading against the financial instruments it was selling was just helping to mitigate its risks and establish an orderly market. You can complain about Goldman's response as being insufficiently contrite, but its financial results and stock price have held up better, and it is not (yet, at least) on the hook for massive financial penalties, even though one could argue that it was associated with a lot more economic damage.

The most important issue is whether Tony Hayward, in his position as the leader of BP, is responsible first and foremost to BP's employees, who are embarrassed by their association with the disaster, and its shareholders, who face diminished wealth and possibly also income if BP cuts its dividend this week? Or is he responsible to the American public, its political leaders, and the press? Conventional wisdom about crisis management seems to me to be widely shared and mostly inconsistent with the facts.

Maybe the best leadership under crisis is that exemplified in the quote attributed to the late Henry Ford II, "Never complain, never explain." And at a minimum, put you and your company's actions in the context of what you were trying to do and the difficulties you faced in that effort.

By Jeffrey Pfeffer

 |  June 15, 2010; 3:13 AM ET
Category:  Crisis leadership Save & Share:  Send E-mail   Facebook   Twitter   Digg   Yahoo Buzz   Del.icio.us   StumbleUpon   Technorati  
Previous: Not blame but responsibility | Next: Who's-on-first in the Gulf


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The notion that a CEO's primary responsibility in a case of crisis is to shareholders reeks of what is wrong with corporate America today.

Shareholders are people (or entities) that buy shares in a company because they think the company will make money. If the company does make money and its shares go up in value, then the shareholders make money, too. Yay!

But by investing in a corporation's likelihood of success, you are also investing in the possibility of its future failure. If the value of the shares goes down or bottoms out and you haven't sold your shares, then you lose money. Boo!

There are no do-overs. If you're investing in an oil-drilling operation, by definition you are buying shares in the possibility that a crisis could occur which might severely damage or even void the value of those shares. You are not entitled to the protection of the corporation at the expense of the public good.

Investing is risk-taking. When an oil rig you've invested in blows up, you share in the financial downturn of the company's stock value.

Prof. Pfeffer's suggestion that at least part of BP's response should have been predicated on protecting its shareholders (aka "doing a good job for them") is ethically irresponsible and morally reprehensible.

Posted by: haveaheart | June 16, 2010 2:26 PM
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The author displays a shocking ignorance of both markets and liability. BP's stock price did not crater because the CEO was contrite. It cratered because BP's projected liability for damages and remediation increased substantially with the increased estimates of the oil flow. BP's liability does not increase because of an apology, since it is statutorily responsible for clean-up. It can seek contribution from other responsible parties regardless of whether it apologized or not. If anything, an apology might have some positive impact on a future punitive damages award.

The professor seems ignorant of all of this as he prattles on about how a corporation is best served by emulating a sociopath. He really should take a course in business - in addition to a refresher in morality and human decency.

Posted by: sonoki82 | June 16, 2010 12:35 AM
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if he is a scholar, our educational system is in trouble...

Posted by: mckenziep | June 16, 2010 12:11 AM
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I am so sad to see that this writer is a teacher and author giving advice about how to handle a crisis. I am so disappointed to know that Stanford has become an unethical institution that supports this kind of thinking. As a former professor of public relations, I taught my students to follow the Public Relations Society of American credo to do all of the things that this guy thinks you shouldn't do. I agree with all those who have commented about his lack of ethics. I find this perspective too Bush-like...which is how we got into this mess...

Posted by: mckenziep | June 16, 2010 12:09 AM
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Really sad to see that they don't teach ethics at Stanford. Sure, unleash an unprecedented environmental disaster on the Gulf coast but whatever you do, don't apologize. No judgment day. No comeuppance. Just behave like an inhumane, uncaring greedy monster corporation and go on about your risky business on your way to your yacht which, if there is any justice in this world, is but a pitstop before you reach your final destination which is hopefully hotter than Hedes.

Posted by: SarahBB | June 15, 2010 11:57 PM
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If these comments by Pfeffer are what passes as "ethical" behavior at our top business schools today, that explains a lot about what has happened to our economy in the past few years.

Posted by: dhmcgee | June 15, 2010 11:09 PM
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The thought that BP CEO should look up to Goldman & Sack for the leadership skills to weather yet another business caused catastrophe is sad. You equate leadership with cowardice and a lack of an ethical conscience. The issue of leadership should be brought up with respect to the decisions that lead to the accident.

There have been problems with BP's response to the event -- like lying in our faces about the progress of different potential solutions, gallons/day, etc. But I have to agree that I was surprised that the CEO openly acknowledged the degree of the problem and showed a resolution to solve it.

But professor, I don't want to hear anything about shareholders and value of their investment and income therefrom. You shareholders collectively own a company that doesn't follow basic safety standards and hired a CEO that is willing to risk so much of what belongs to others for, in the end, so little of what you would otherwise still earn. It is false to divide up the CEO/company from the shareholders. You are one entity and the responsibility for the catastrophic outcome of *your* decisions is towards the lives of those who got harmed outside of your corporate body.

It is time that we start having a conscience when we invest in company shares.

It was tough to read so many responses against the "professor," because it shows how the author's commentary reinforces the false idea that all of us professors and academics live in worlds apart from what is socially significant. This is not true.

At least I am a professor in the field of philosophy, where we still believe it is worth writing and teaching courses on the good, the just, the truth and the beautiful--ethics and critical thinking are in the curriculum. The irony is that there is a growing systematic attitude in universities and colleges to do away with philosophy and other disciplines in the humanities in favor of profit generating fields, where the private sector has ever more input into the character of what is taught or researched.

Posted by: Olga6 | June 15, 2010 10:55 PM
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This commentary makes it clear why the views of people like this professor, who have had no practical business experience, are totally invalid.

He, Obama, the do-nothing congresspersons and other nay-sayers should move on to other matters and leave the resolution of this tragic incident to experts. And stop bashing BP; they're doing everything they can to get this straightened out.

Posted by: camper3 | June 15, 2010 10:17 PM
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KURTHUNT, why don't you post your email and address then, you fagg0t
Posted by: bendan2000 | June 15, 2010 7:47 PM



Why would I want to do that? I posted Pfeffer's because he wrote this aweful article, and I'd like for people to tell him what a jerk he is. I don't want nut-bags like you emailing me. Why don't you post your email address?

Also, FYI, I'm not gay - not that there's anything wrong with that.

Posted by: kurthunt | June 15, 2010 9:36 PM
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MBAs still have any value? Not with brilliant minds like this.

But then, I wrote off the "Business experts" years ago. Mostly, they are full of s***.

Posted by: jgwlaw | June 15, 2010 9:17 PM
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Never Complain, Never Explain, good motto ... I'll remember to do that the next time the annual performance review comes up.


Posted by: pyee | June 15, 2010 8:41 PM
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Why don't we give Mr. Hayward a medal for competence and integrity while we ask him not to apologize? I mean what more could he and BP possibly do to harm the environment further? I am keenly waiting to see what the congress and the government will do to hold the greedy and incompetent BP responsible. I think Mr. Hayward should have his life back... in jail!

Posted by: bluefrog | June 15, 2010 8:05 PM
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You must be joking, right? The malfeasance of BP is now leaking to the press almost as fast the catastrophic oil spill that is the direct result of their bottom-line driven negligence.

It's people like you that convince people that businesses are conscience-impaired buffoons.

Posted by: st50taw | June 15, 2010 7:53 PM
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KURTHUNT, why don't you post your email and address then, you fagg0t

Posted by: bendan2000 | June 15, 2010 7:47 PM
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Thank God, I didn't listen to my California friends and spend the money on sending that last kid to Sanford. What a horrendous waste of money that would have been. West Coast Ivy League indeed. Next time I consider someone based on their MBA, you can be sure they are disqualified if Jeffrey Pfeffer's name comes up.

Posted by: Reesh | June 15, 2010 7:46 PM
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The question was about leadership, yes leadership- not covering a corporation's bu**. Mr, Pfeffer, I now understand why the business culture in this nation exists in moral vacuum: its managers (notice I didn't use the term leaders) learn from professors such as yourself.

You, sir, need to study servant leadership.

Posted by: PatC1 | June 15, 2010 7:41 PM
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I did a google search on Dr. Pfeffer. I got all his contact info, including his email address and phone number very easily. I posted them on this blog, but they got censored. I sent him a nasty email. Instant Kharma, baby!!

Posted by: kurthunt | June 15, 2010 7:25 PM
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Why not send Dr. Pfeffer a note?

Email: pfeffer_jeffrey@gsb.stanford.edu

Posted by: kurthunt | June 15, 2010 7:17 PM
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I did a little Google search on Mr. Pfeffer:

Thomas D. Dee II Professor of Organizational Behavior
Contact information:
Stanford University Graduate School of Business
518 Memorial Way
Stanford, CA 94305-5015
Phone: 650.723.2915
Fax: 650.725.9932
Email: pfeffer_jeffrey@gsb.stanford.edu

Why not send him an email and tell him what you think about his theories on "leadership"?

Posted by: kurthunt | June 15, 2010 7:11 PM
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I wish there was a "REPORT OFFENSIVE COMMENT" button at the bottom of this shameful article.

Stanford, fire this jerk. He's dragged your name throught the mud.

Posted by: kurthunt | June 15, 2010 7:02 PM
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Henry Ford never fouled the entire Gulf so the quote is not appropriate.

Your article indicates you don't have a clue but that is no excuse for getting published here. Who do you think you are, Fred Hiatt?

Posted by: BobSanderson | June 15, 2010 6:56 PM
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Who wrote this garbage?

Posted by: revbookburn | June 15, 2010 6:55 PM
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Well, this would certainly help to explain why so many graduates of our illustrious business schools seem to graduate with no moral compass whatsoever. They have professors like this guy.

Posted by: jayelle5 | June 15, 2010 6:22 PM
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Who says we can't achieve a large part of our energy from off-shore.

Libs and enviro-wackos like to complain how big this spill is - 100,000 barrels a day.

That's a LOT of oil and energy from one well. In spite of the accident, seems like offshore drilling CAN give us a lot of oil.

Posted by: pgr88 | June 15, 2010 5:51 PM
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Mr. Pfeffer,

That's an insightful view from your armchair.

"A desk is a dangerous place from which to view the world." - John Le Carre

Posted by: bpai_99 | June 15, 2010 5:51 PM
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No matter how finely pedigreed the professor, sometimes it is better to remain silent and thought a fool than to open your mouth and remove all doubt.

Posted by: citizen625 | June 15, 2010 5:41 PM
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So Henry Ford said "Never complain, never explain." He was also a big admirer of Hitler.

Now there are two men who understood "POWER: Why Some People Have it and Others Don’t," (The title of professor Pfeffer's new book.)

Ford and all the worshipers of raw power who emerged 90 years ago and prepared the way for Hitler, Mussolini and Stalin were on the wrong side of history. Eventually they were put down, but not before most of Europe and good chunks of Asia and Africa were in ruins.

If the same thing happens in our lifetime, the devastation will be much worse.

Understand what this world view implies, and oppose it whenever you run into it. Your grandchildren's lives may depend on it.

Posted by: msh41 | June 15, 2010 5:22 PM
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"Never explain"---???? In 2010? You're kidding, right?

Posted by: ihave4ducks | June 15, 2010 5:20 PM
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Wow does this guy have NERVE! BP's oil is destroying our East coast and killed 11 workers and they should take no responsability? What district is he running in? I'll start campaigning for him right away.

Posted by: libertyanne | June 15, 2010 5:17 PM
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The professor is right. BP gets hammered regardless of whether it apologizes or not. Hayward should shut up and let BP's press office handle releases. All they have got so far is a stream of venom from the White House and the political establishment, and a rash of sell orders on the stock exchange, where the value of BP has been cut in half. What BP was doing was approved by the U.S. government, which recognized the dangers of deep water drilling but gave BP a license to go ahead. I find few who don't think America needs the oil, and domestic sources are better than imported oil. Windmills are all well and good, but they don't begin to fill in the needs filled by oil. We need also to recognize this accident is regretable, but not totally avoidable. Everyone involved in the process recognized the dangers involved with deep water drilling, and as I said they got the license. Once the explosion happened and oil was released into the Gulf, BP did all that it could to stop the leak. Look at all the equipment they have deployed down there. Could they do more? Sure. But what they have done has been adequate and has diverted some of the spill. BP has a defensible position, but not in this climate. No one wants to hear about BP's environmental record or other feel-good messages. The company should withdraw these ads, tell the executives to shut up, and wait in silence until the engineers come up with a clever solution. Too many people are out there baying for BP's blood at this point.
Finally, would this sort of outrage against a public company have erupted if it were an American company, rather than a British company? I think not, and remember that Union Carbide got off comparatively lightly for Bophal, and Exxon didn't get these sort of attacks on its finances because of the Exxon Valdez spill.

Posted by: edwardallen54 | June 15, 2010 5:14 PM
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Go back to the top of the comments and read the entry by 3620....the poster is either a shrink with lots of time on their hands or 50 something new age parent. Give me a brea...

Posted by: boise91801 | June 15, 2010 5:08 PM
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Boy o boy, is this guy an a$$ kisser's a$$ kisser.

Step right this way folks and see what ignorant, shallow cretins teach American business people all about the world.

A person would learn more about leadership from his cub scout master than this insipid clown.

Posted by: kuvasz | June 15, 2010 4:58 PM
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Posing is more important than reality? Yeah, thats business 101 in 2010...too bad they can't match their testosterone with action or intellect.

Posted by: blackmask | June 15, 2010 4:57 PM
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Hmm... googled a bit on the author, seems ok otherwise, but this one is surely bad.

Posted by: a_swank_veteran | June 15, 2010 4:35 PM
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This article could go down as one of the most vacuous justifications for moral relativism ever written. It is like reading the devil's logic for Faust's contract. It is difficult to grasp how such Ayn Rand nonsense still has a place in serious public discussions.

"Research in social psychology shows that acting embarrassed or remorseful conveys less power--and results in less favorable impressions--than acting angry." What research offers such garbage? I'm fairly certain no such "research" exists, or you would have cited it. I feel especially sorry for your family with whom, I guess, you get angry when you make a mistake, rather than taking responsibility. "Watch out. Dad screwed up again, and you know what that means! He doesn't want to appear less powerful, so he's going to be pissed!"

How does a man get to your age and manage to be so completely clueless about what matters in life -- integrity, honesty, being of service to others? And to be so public with your lack of maturity. Sad. really sad.

Posted by: 3620 | June 15, 2010 4:32 PM
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I see.. your perspective is that BP'S shareholders come before the people, business, cultures and wildlife that BP's drilling blowout has caused.. You belong in academia since you clearly have absolutely ZERO knowledge of what happens in a real life business scenario..

Hayward should have been fired WEEKS ago and BP should have been nationalized before that!!

Posted by: rbaldwin2 | June 15, 2010 4:29 PM
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The context is, BP took shortcuts and now the planet is suffering collateral damage, not to forget the multitudes of people whose lives are being devastated by BP's debacle.

BP can say anything they wish, including that they are just trying to make more energy available to the greedy public. But we all know benefiting the public is NEVER the reason for any corporation's ventures. It's always about enriching their bottom line and the top management's salaries.

So try as you will to portray BP in a different light. They're still like all the the multinational corporations. Just a bunch of greed driven crooks.

Posted by: veerle1 | June 15, 2010 4:24 PM
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My God!! This man is a teacher. Of what how to squeeze a dime out of a nickel at the cost of 11 lives and untold billions in damage. BP turned down every recommendation to make the well safer and kicked off the well cement engineers 12 hours before it blew up and your advice is never explain and never complain. Men died for a few extra bucks did you get that if not I'll say it again men died so BP could save money and this is your response. I'm appalled that any decent institute of higher learning would have you on staff as anything other than a janitor.
If you represent the majority of thinking in your field then we are all doomed. Alaska now the gulf what next. This isn't business. It's the systematic destruction of lives for the almighty dollar. BP could have made a tidy profit on that well they just wanted to squeeze that nickel. There is nothing wrong with making money but killing people while doing it is not business 101 until now.

Posted by: ease99 | June 15, 2010 4:18 PM
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Haha... laughably bad article. The underlying analogy is all wrong.

Goldman Sachs (GS) has a reputation/perception of being the best managed firm on Wall Street in spite of its woes. Therefore, if I were an investor interested in banking sector, I would still pick GS thinking that "if this is the condition in GS, it must be worse in other places." That explains its stock price, that is why clients stick to GS.

In the case of BP, it is the specific failure of management processes in that company and not of the industry as a whole.
So it makes sense in beating down that stock.

(Having said that, I personally believe that there are many malaises in Wall St. and the fact that GS did them doesn't make it right. Hope they too get their comeuppance.)

Posted by: a_swank_veteran | June 15, 2010 3:48 PM
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As someone getting his MBA, let me chime in and say that I find the column to be disgraceful.

First off, if you honestly believe BP would have fared better by saying "We're just trying to supply the world with energy and these are the risks that come with it" then you're absolutely nuts.

They are, to a large degree, responsible for this. Trying to act differently would have backfired.

Second, whatever the PR response from BP, it does not change the fact that THE ROOT PROBLEM ISN'T FIXED.

Acting confidently or acting remorseful doesn't mean anything WHEN THERE IS STILL OIL GUSHING INTO THE GULF.

Long story short, the business world needs fewer people like the person who wrote this article -- people who are only concerned with PR responses -- and more people who are competent and worry about solving the problem.

You are, my friend, what I refer to as being "fake and full of ****"

Thank you though, for tainting my MBA. I appreciate it a lot :)

Posted by: CF11555 | June 15, 2010 3:18 PM
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BP needs to stop taking crisis advice from the folks they have hired. Address the problem, offer your solution, then go to work.

Obama has set BP up for a fall. Sure they screwed up and were possibly grossly negligent, but without BP, nothing gets fixed.

Perhaps the MMSA should have followed their own regs, just like the SEC,DOJ,FDIC,CFTC, yadayadayada.

The government and BP are both to blame.
Clean house at MMSA, then when the well is plugged, BP should fire the appropriate chain of command.

We have all become wimps and whiners. The facebook touchy feely world. God help us all.

Posted by: wesatch | June 15, 2010 3:09 PM
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Don't fret, Professor Pfeffer. Before this is all over, BP will be putting the screws to everyone just as you would have it.

Once again, we'll socialize the losses and privatize the gains, and no one will be accountable, in accordance with your grad vision of corporate control of every facet of American life.

If this is what passes for leadership in today's America, it's no wonder we're in the state we're in.

"But the idea that BP was taking enormous risks ... found no voice."

Perhaps you haven't been paying attention. BP took the risks all right, and we are bearing the consequences.

Apologies are not sufficient and will not substitute for action. The so-called "leadership" of BP should be stripped of all their US assets until the people of the Gulf are made whole. If they so much as twitch in complaint, throw them in prison without bail, and they can put on their tough-guy act there until you squeal like a pig with delight at their intransigence.

Now THAT would show some leadership.

I won't hold my breath for an article on that from you, Professor.

Posted by: trippin | June 15, 2010 3:07 PM
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"Never complain, never explain." Who is not accountable? Dividends may seem like a great idea WHEN you have the $$ to do so. If, after they pay for the clean up, pay for the environmental issues, pay for reduced tourism, pay for incomes lost to the fishermen, they still have $$ for dividents,more power to them. Until then, they have a greater responsability to others than profit seeking share holders. Why? Becasue to shirt responsability and then say "we are profitable" is egregious.

Posted by: cadam72 | June 15, 2010 2:50 PM
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The Professor is really pathetic, to say that profit trumps "collateral damage". Sad part is that this guy works for Stanford - what a shame.

Posted by: booger1 | June 15, 2010 2:49 PM
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The BP Exec's compared to Goldman Sachs obviously have a conscience. That's more than I can say for Goldman and all of the other Wall Street criminals.

Personally, I have more respect for people and companies that have a conscience, then for those that don't.

For that... I can at least give BP and Tony Hayward credit for taking ownership for the havoc that they have caused the country, as opposed to running away like a bunch of rogue criminals.

And by the way, Hayward did explain it, while he whined about it; and now he needs to FIX it.

And if he can't fix it, then the time now is for him and his company to get out of the way and let someone else with the skills and know how fix it and fix it right.

Posted by: lcarter0311 | June 15, 2010 2:48 PM
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REAL leadership would have been having the proper procedures to do your job safely. This totally unnecessary accident was caused by a failure of leadership. This is just a discussion of the best CYA technique.

Posted by: AlibiFarmer | June 15, 2010 2:44 PM
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Actually, I've tried to keep up with all the news about BP, but I haven't heard this man explain anything other than complain that "he wanted his life back." The oil rig was registered in the Marshall Islands, which probably doesn't have much of an inspection department, so I doubt they ever verified if the oil rig was sea-worthy. MMS, which oversees the oil and gas companies were more interested in partying with oil and gas executives rather than inspecting these platforms and oil rigs.

Tony Hayward hasn't done a very good job of mandating that the company be more transparent in giving information to the press and the public. By the time this whole episode is done, it should appear as a study piece in HBR.

Posted by: missgrundy | June 15, 2010 2:40 PM
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"POWER: Why Some People Have it and Others Don’t." Because some people are sociopaths.

It's easy to grab what you don't have the intellectual capacity to handle when you are incapable of considering consequences and have total disregard for how your actions affect othres.

Posted by: multiplepov | June 15, 2010 2:18 PM
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If this is the best you can do, then I can't wait for capitalism to end.

God said take dominance over the earth -- not destroy with greed.

I bet BP sure wishes they spend whatever amount of money on more safeguards for this rig. Their stock has dropped enough to perhaps teach other oil companies the same?

I wouldn't bet any money on it, since it's more important to be alpha than be right.

Posted by: tony_in_Durham_NC | June 15, 2010 2:12 PM
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"If Palin had her way, we'd be drilling on land or in shallow water where this well would have been capped immediately. It's insane environmental regulations that forced drilling in deep water."

...One of the few people who actually gets it.

Advocates for expanded drilling want to avoid exploration at the ends of the earth. As we restrict where to explore and recover petroleum we displace exploration - either to foreign countries, many of which are bad actors, or to exotic locations with extraordinarily risky technologies. It is irrefutable that political blame reaches across the aisle on this one.

Posted by: Jeff_in_DC | June 15, 2010 2:12 PM
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I had to respond to dumbreddown's comment that tries to take away from Haliburton.

Haliburton is as guilty as BP. Here are four points to consider:

1. If Haliburton was sure 21 "centralizers" were required, why were they willing to build a system they knew was so deficient? They could have turned down the contract. I guess the money. They sure didn't talk to anyone in the Bush/Cheney administration. Cheney was closely related to Haliburton.

2. Not one oil company had a solution or real backup plan for such a disaster, no matter who was to blame. Every rig out there is a time bomb waiting to go off.

3. Haliburton, by itself and via Cheney, have been able to blatantly dilute the EPA control mechanisms for oil drilling, natural gas, etc. This is just a natural extension of the Bush/Cheney (read: Haliburton, Exxon, Shell, Etc.) energy policy.

4. BP and Haliburton are simply driven by the bottom line and greed. We as a nation and a people have constantly let things like this happen.

And just as a bonus, remember the current, very conservative, Bush/Cheney, supreme court has already, via the Alaska/EXXON decision set a potential limit on the country's ability to recover anything near the real costs of the spill from BP.

Pogo, a long time ago, "We have met the enemy and it is us."

Posted by: JedG | June 15, 2010 2:07 PM
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Thank you, Professor Pfeffer.

I think it's important that from time to time we are reminded how divorced from reality you business school ivory tower-types are.

You're insulated in two ways, actually -- by academics and by geography. If you lived closer to the Gulf of Mexico I suspect your arguments would follow a different route.

Posted by: brickerd | June 15, 2010 2:04 PM
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So, do I understand this? BP should never have admitted responsibility and never agreed to clean up the mess?

No offense, but that is one of the most offensive and destructive ideas to come out of this catastrophe. Both for the victims on the Gulf Coast, and the victims whose retirement checks will take a hit.

There are some things, and this is one of them, that are SO bad that they defy conventional and unconventional wisdom. This isn't just some minor little crisis that will be over in a week or two with limited outcomes. This is FUNDAMENTALLY different than Goldman Sachs.

At least I have a particle of respect for BP for manning up and admitting their failures, rather than putting a cold face on the death and destruction following in their wake.

Has it occurred to you that BP DESERVES to lose half its value? That that's the price that is paid when you take risks without reasonable backup plans? When you ignore good advice because you're too freaking worried about your bottom line? Risk and benefit go hand in hand -- BP seems to have forgottent that, so if their market value craters -- GOOD. That's what is SUPPOSED to happen.

IMO, BP showed far greater strength in taking the tack that they did, and although they have consistently let me down with their consistent failures to stanch the flow, had they taken the 'don't explain, don't apologize' route, I would have seen them as much weaker with something to hide, and been burning their leadership in effigy.

Posted by: lanehatcher | June 15, 2010 2:03 PM
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So enjoy your blood money and profits, jerkwad.

Posted by: Byrd3 | June 15, 2010 1:47 PM


Too often meaningful commentary includes the 'Nazi' and omits the 'Jerkwad'.

Posted by: gannon_dick | June 15, 2010 2:00 PM
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This shamefull article reveals a lot about the author, Stanford Business School, and our nation's business grads....treacherous cretins, all.

Posted by: kurthunt | June 15, 2010 1:54 PM
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This Author is the "Smartest Guy in the Room" ?

The problem, for Henry Ford and for BP is that the Art of Changing the Subject has an inordinate number of shallow hacks for practitioners nowadays because the con men practitioners are at greater risk for jail and other risks impossible to Socialize.

Business Schools are Museums dedicated to this and other 'Arts'. They almost never have empty rooms[*], they have new innovations which by Expert Magic(tm) rise to the level of Art.

[*] The Emperor's New Clothes is a Permanent Collection.

Posted by: gannon_dick | June 15, 2010 1:51 PM
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This sounds almost exactly like the defense that Goering gave at Nuremberg and I find it appalling that apologists like the author have apparently learned absolutely nothing. It's becoming increasingly apparent in this Gulf Holocaust that the species called homo sapiens might well be composed of two completely different evolutions - ones with a soul and conscience, and the others without. The author obviously falls within the latter category. So enjoy your blood money and profits, jerkwad.

Posted by: Byrd3 | June 15, 2010 1:47 PM
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Oh for crying out loud. The problem isn't that Hayward acted too remorseful, it's that BP has put on its sadface while lying about the extent of the spill and making it difficult for local, state, and federal government groups (not to mention nonprofits and news organizations) to do their jobs.

Posted by: dkp01 | June 15, 2010 1:33 PM
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Regrettably, within the amoral sphere of the corporatocracy, Professor Pfeffer is "right on the money." Which is why he should be cleaning toilets somewhere instead of being allowed anywhere near a professorship-- in anything-- at one of the country's most prestigious universities. When academia has abandoned teaching anything even approaching a sense of moral responsibility to society, can the dissolution of our way of life be far behind? Like other commenters, I kept looking for the punch line in this screed, but this pathetic man is apparently stone cold serious. To realize that this is the kind of person moulding the corporate leaders of the future leaves me feeling almost physically ill.

Posted by: howardhankins1 | June 15, 2010 1:31 PM
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How does this compare to more new-school business concepts, for instance, corporate social responsibility? In situations like BP's, not admitting fault amounts to shirking responsibility. While it might yield a short-term psychological benefit in the way the public initially reacts, would it have ultimately placed BP in a more favorable light down the road?

Posted by: mwalker1 | June 15, 2010 1:19 PM
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This reveals the core of the business "ethics" at our pretigious business schools?

I say, give me an apology and take full credit and then clean up the mess. Far better for all concerned.

Posted by: viewpoint3 | June 15, 2010 1:09 PM
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This is EXACTLY what is wrong with the business community. Their highest priority is increasing the wealth of the shareholders no matter what the effect on the country is. And that is EXACTLY why I oppose the right wing's desire to privatize everything. In the public sector, we can vote people out of office if they have the professor's attitude. In the private sector, we are at their mercy and he is telling us in the article that they will ignore us. No wonder they call every attempt to reign them in "socialism." They want to be able to act without any rules but upping their profits.

Meanwhile, I fear how students will turn out if they attend Stanford and have this nonsense aught to them in class.

Posted by: TomfromNJ1 | June 15, 2010 1:08 PM
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Dear Mr. Pfeffer,
Thank you for your thoughts and opening the window on your vacuous soul. Your love of money is a beautiful thing to see. Who would have thought an old white haired bald man snuggling up to a pile of 100 dollar bills could be so heart warming.

I think you would agree with me that if BP could raise their stock price by 1/4 of a percent by murdering a baby, that would be a wise and prudent thing to do.

Posted by: cwhicks2 | June 15, 2010 1:00 PM
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We live in a different world from when Ford said "never complain, never explain". In part it is Ford's fault for the mess we are in today. I don't think we would be looking for hay and oats in the middle of the Gulf. Thank God we have a free press that insists, or at least tries to keep transparency among thieves.
My question is, who profits from the oil that is sucked out of the Gulf waters? The people who profit from this disaster should not complain about the anger and distrust that has come down on them since this disaster. The people who profit are the ones who should pay the price of this disaster. The people who profit are the ones who have permitted and perhaps encouraged short cuts and omissions that led to this mess.
Never explain can cover all kinds of sins, and has for some time.
There is a whole lot of explaining to do. And BP needs to start doing it.

Posted by: wendystevens | June 15, 2010 12:58 PM
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"They were doing what John McCain, Sarah Palin, and many others wanted: drill, baby, drill, and in the process, not only feeding our need for oil but doing it in a way that does not increase dependence on foreign governments"

This is very stupid. If Palin had her way, we'd be drilling on land or in shallow water where this well would have been capped immediately. It's insane environmental regulations that forced drilling in deep water.

Posted by: Swat02 | June 15, 2010 12:48 PM
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Congratulations to Professor Pfeffer for his enthusiastic endorsement of the commission of multiple acts of intentional negligence for the pursuit of profit.

I assume that he also endorses the intentional poisoning of foodstuffs sent to Americans like himself and any grandchildren he may have by Chinese entrepreneurs.

I'm glad that he at least acknowledges that Goldman Sachs did a masterful job of helping to trash the world's economies and making money out of it both going and coming.

Perhaps someone has a Ford Pinto Professor Pfeffer's wife can drive.

Posted by: edallan | June 15, 2010 12:48 PM
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Wow. If the writer here is serious--and I found myself waiting for the punch line throughout--then the damage caused by the spill promises to pale in comparison with the potential damage to the business community at large and capitalism in general. When the interests of stockholders are seen as a legitimate counterweight to the interests of the public in a case that has killed 11 people outright and caused untold harm to an entire region, if not the entire ecosystem, then something is either badly awry with our system, or, as seems to be the case, with the proponents of such a flimsy, one-dimensional argument.

Posted by: dave_inglehart | June 15, 2010 12:43 PM
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If BP had not made it clear that they planned to pay without question, they risked having their company seized by the US Government. This is too big to spin, the truth will not set BP free, but it is absolutely vital to the future of BP and the oil industry for BP to look both sorry and that they are doing their absolute best to make it right.

BTW it looks to me like BP forced Halliburton and Transocean into risky behavior, and as the prime its all their responsibility anyway. Why take the hit for weasling words when they know they are going to lose.

Posted by: Muddy_Buddy_2000 | June 15, 2010 12:38 PM
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Saying and doing are 2 different things. There are not enough booms, there are not enough safety systems. They could have paid for that a long time ago. This company has had more U.S. employees die in accidents over the last 5 years than the other oil companies combined. That is truly appalling behavior and behaviour.

Yes BP's big problem is that they stepped up to the plate and said we'll pay for it. What appalling behaviour.

Posted by: ryanNdc | June 15, 2010 12:34 PM
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No, the problem is not with BP apologizing and taking responsability. The problem is that the apology and responsibility were falsly given. It's clear BP is only saying and doing things based on perceived liability and not aggressivly working to fix the problem.

And another thing, it is insane to suggest that BP does not have a duty to suspend it's dividend to it's shareholders to pay for all the damage it has caused first.

They should be thankful they havn't been nationalized yet instead.

Posted by: AnotherContrarian | June 15, 2010 12:30 PM
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What a warped editorial. BP's first responsibility is to the hundreds of thousands of people who's lives and livelhoods they have destroyed by their ineptness and dishonesty.

Posted by: Richard18 | June 15, 2010 12:26 PM
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Tony Hayward should provide his shareholders with a dictionary so they can look up "risk".

Posted by: oiu123 | June 15, 2010 12:22 PM
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Interesting comments. I agree BP adding context would have been helpful.

Posted by: bruce18 | June 15, 2010 11:33 AM
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Important news from AP today:

"BP REJECTED Halliburton's RECOMMENDATION to use 21 "centralizers" to make sure the casing ran down the center of the well bore. Instead, BP used six centralizers."


Posted by: dumbreddown | June 15, 2010 9:20 AM
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Yes BP's big problem is that they stepped up to the plate and said we'll pay for it. What appalling behaviour.

Posted by: 11OAKHAM | June 15, 2010 8:48 AM
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