Leadership's Role In Crises - Crisis Management

[Editor's Note: This article was submitted to me at the end of July and events related to the disastrous Gulf spill have evolved somewhat. That doesn't change the lessons Carlos shares with us in this valuable commentary.]

After three months and, finally, a currently successful operation to close off the oil spill, we have been seeing

Carlos Victor Costa

recently the outcome of the critical phase of BP's crisis in the Gulf of Mexico. This phase is called "post mortem", where investigations take place, and someone has to be held accountable.

The departure of Tony Hayward as BP´s CEO - for some just a scapegoat, for others the only solution left - was a consequence of the terrible mistakes he made as the person ultimately responsible for the crisis management, and Bob Dudley, the new CEO, will have some interesting challenges to tackle:

Overcoming the "disaster of communication" (term used by a company employee interviewed by The Financial Times) that constituted the public relations activities of BP during this crisis. What could be positioned as a genuine effort to repair the damage in a very adverse operational environment, comparable to conducting brain surgery in the dark, ended as an assault to the company´s reputation, a reason for scorn and dark humor directed at BP. After the Deepwater Horizon crisis, the newly appointed BP CEO will have to give a new face to a company with its brand image tarnished by the incompetence and lack of credibility fostered by his predecessor.

Introducing himself as a leader 24 hours a day and, like Caesar's wife, a leader that acts honestly but also seems honest. In this case, a leader who works to manage the crisis, but did not say the crisis is a hindrance in your life (the infamous "I want my life back"), or want to unwind by playing on his yacht at sea, a sea the company polluted.
Recovering the morale of the company. Employees, previously proud to belong to a century-old company that is part of the history of oil, a company that has some of the brightest engineers and scientists in the world, who must now be financially suffering due to the collapse of BP shares, emotionally suffering due to BP's loss of prestige. BP is now a very vulnerable company in every aspect, and a leader will have to be able to motivate people to overcome obstacles. But the exaggerated optimism of Hayward (he said in the midst of the crisis in a town hall meeting with the employees that he was "very excited" about the future of the company) will not be the best rhetoric to achieve that. I think the "blood, sweat and tears" of Churchill would be more appropriate.

Rebuilding the reputation of the company. It is going to be almost an impossible mission, but it is essential to rebuild the reputation of BP in order to have the confidence of investors, consumers, communities, media, governments and NGOs. Above all, BP will have to work hard to attract the future employees it will need to lift the company. I doubt that BP is now among the first choices of a brilliant college student about to start his/her career.

During the Exxon Valdez crisis, the CEO of the company tried to minimize the damage, but he was criticized for taking three weeks to go to Alaska. Back them, much was discussed about the role of leader in a crisis, and the mainstream thinking was that the leader should always step up and show up at the scene of the crisis. But that is not so simple, and must be handled with care. Take the case of the Union Carbide crisis in Bhopal, during which Warren Anderson immediately flew to India, to be arrested as soon as he set foot in the airport. Yes, the CEO is the "visible face" of a company, but he is also usually the "last line of defence", therefore his entry into this complex battlefield that is a crisis (with all the subtles of reputation and issues management) should be carefully organized to build trust, not the contrary.

I believe that the problem with BP's CEO was that its communication department relied too much on Tony Hayward and the "visible face" strategy, super-exposing him to the press and to public scrutiny - while overseeing his obvious lack of skills. In this sense, I see the role of a leader, for the purposes of crisis communication, to be like the king in chess. He does not win the game, but he can spoil everything.

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