Nell Minow
Corporate Governance expert, 'Movie Mom'

Nell Minow

Editor of The Corporate Library, and 'Movie Mom' for and radio stations across the country.


A shameful response

Q: As oil surges into Gulf of Mexico for the fourth week, BP's leader steadfastly refuses to take the blame for the collapse of a well. CEO Tony Hayward blames one of its suppliers, and says he's "absolutely confident that we can bounce back." It's not only a PR battle, but one for the ecology and economy of an entire region. What are Hayward's mistakes, and if you were in his shoes, what would you do differently? How do you forge success from disaster?

Like the oil spill itself, Tony Hayward's behavior is out of control and utterly toxic.

If you ask business school professors specializing in leadership, branding, and ethics which case study they rely on most consistently, all of them would say that it is the behavior of Johnson & Johnson CEO James Burke following the tampering of Tylenol capsules in 1982, considered the gold standard of public relations and crisis management. His prompt, candid, highly visible, and highly credible response was reassuring and trustworthy and when Tylenol came back on the market, consumers were ready to try it again.

Hayward is on his way to becoming the counter-example for the next generation of business students. Every statement and action BP has taken has proven the company to be a part of the problem, not a part of the solution, and their brand will suffer for it long after the spill is cleaned up.

It is surprising because BP has worked hard to portray itself as one of the good guys over the past decade. It has used the tagline "beyond petroleum" since 1997 to portray itself as committed to sustainable energy. It has gone beyond the required disclosures in revealing its environmental impact, including oil spill and emission information, employee satisfaction, days lost through injury at work, and community investment. When Lord Browne was CEO, the company was ranked in the Corporate Knights global "good guy" list in 2005 and 2006, though it has not been on the list since he left.

The company's reputation has all but been destroyed, not by the spill itself but by the way they have handled it. Hayward had a chance to establish himself and his company as credible and capable. All he had to do was accept responsibility, be clear and candid about the steps they are taking to protect the employees and the inhabitants and wildlife who are affected by the spill, and explain how they will prevent future disasters.

Instead, he told the press that it was not BP's fault, blaming their contractors. Shockingly, he tried to minimize the impact of what will be the worst oil contamination in American history, claiming that the spill is "relatively tiny" compared with the "very big ocean."

Hayward was right about one thing. He admitted, "I will be judged by the nature of the response." The judgment on his response so far is that he has utterly failed to earn our trust by acknowledging the seriousness of the problem or demonstrating the company's capacity to address it. Now it is the job of the company's board to clean up both the damage they have created in the Gulf of Mexico and the damage Hayward has created to the company's reputation.

By Nell Minow  |  May 20, 2010; 12:00 AM ET  | Category:  Comeback attempts Save & Share:  Send E-mail   Facebook   Twitter   Digg   Yahoo Buzz   StumbleUpon   Technorati  
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