Five Leadership Lessons from the Oil Spill
Posted on Harvard Business Review: June 28, 2010 12:55 PM
It will be months, if not years, before the full impact of the Deepwater Horizon oil rig spill will be fully understood — environmentally, commercially, and politically. In this respect, and the fact that the disaster will have a deep effect on the Unites States psyche, President Obama was correct to draw comparisons with the situation in the Gulf of Mexico and the terrorist attacks of 9/11. That said, it is hard to draw any more meaningful comparisons between the two disasters — unless we consider the glaring differences in the quality of leadership displayed during the last two months. What have we learned?
Let's look at 9/11 first. In the immediate aftermath of the attacks, leaders in the United States and around the world united to offer an inspiring, reflective, and constructive response to the disaster. Recognition of the enormity of the tragedy was followed by restraint, as leaders paused and reflected before taking action. New York Mayor Giuliani in particular understood the importance of leading in a manner that improved, rather than exacerbated, an extremely difficult and tense situation. Ordinary people responded in extraordinary ways, while offers of help and support were accepted with good grace. When the work of restoration began, it was done collectively, without blame or recriminations. There were many examples of good leadership during and after 9/11.
What a different picture we have seen during the crisis in the Gulf of Mexico. The behaviours and attitudes of leaders have been disappointing at best and irresponsible at worst. In this crisis, even some basic elements of leadership have been flouted or misunderstood by the key players.
Most obviously culpable and reprehensible are the leaders of BP, who are ultimately responsible for this environmental disaster. It appears that CEO Tony Hayward presided over an organisational culture that sanctioned extreme risk-taking, ignored expert advice, overlooked warnings about safety issues and hid facts. Their failure to respond to the disaster with sufficient speed and attention was a direct consequence of this flawed culture. Lesson 1: Crises expose dysfunctional organisational cultures.
With its army of media advisers and PR professionals, BP made the mistake of trying to spin its way out of this crisis rather than tackling it head on. Tony Hayward should have realised — or been advised — that there are some crises that cannot be spun. Instead, he has done untold damage to BP's reputation with his gaffes and apparent inability to understand public reaction to his comments. He appears weak, petty, defensive and lacking a grip on the situation. Not surprisingly, he has been moved aside to make way for Chairman Carl-Henric Svanberg, whose gravitas is unquestionable, but who appears equally clueless in the spotlight. Lesson 2: Leaders must recognise when a crisis can't be spun.
While Hayward is rightly being held to account, what can be said about the other leaders' roles in the crisis? In my view, Barack Obama has not lived up to his early promise as a reflective and thoughtful leader who can mediate effectively in times of crisis. The President might have intervened earlier (it was 50 days before he met BP's leaders), highlighting the bigger issue of environmental damage and emphasising the necessity of all sides working together to stem the damage. Instead, he reacted politically, responding to criticisms of his own slow response by deflecting blame unequivocally on BP and unleashing the nation's rage on the company, which at times was extremely ill-judged. As for the other key players, we have heard little from the leaders of TransOcean, a company that was clearly no minor player in the disaster since it leased the rig to BP and was responsible for its safety. And while Bobby Jindal, Louisiana's governor, has in some respects shown stronger leadership than President Obama, he has not been blind to the political opportunities presented by the crisis. Lesson 3: Leaders need to work together rather than scoring points or deflecting blame.
In some ways, a clearer comparison can be drawn between the Gulf of Mexico oil spillage and the banking crisis than with 9/11. In both the oil and banking industries, risk management came a poor second to innovation, profitability and market demand. The duty of leaders, politicians and investors to adhere to regulations was pushed aside in the drive to build successful businesses, create jobs, and deliver shareholder profits. They forgot (or refused to remember) that true leaders are stewards of their organisations and must lead for the longer term. If BP goes out of business as a result of the Deepwater Horizon crisis, then its leaders have failed on a monumental scale. Similarly, if U.S. politicians are shown to have put party or national concerns before matters of global importance such as the environment, they will ultimately be failing their nation and people. Lesson 4: Leaders are there to serve their companies, people and communities.
While leadership has been visibly lacking at BP and among political leaders during this crisis, there has been no shortage of leadership among community members and volunteers in the region who have mobilised themselves in an effort to mitigate the effects of the spill. As with 9/11, ordinary people have shown remarkable leadership capabilities, volunteering to clean up the oil and help the stricken wildlife, without thought or care for their own health and safety. Unlike the elected leaders, they see the bigger picture and recognise that the environment and the livelihoods of local people are more important than corporate profitability or political manoeuvrings. If the leaders in this crisis had followed their example, they might have made more progress in dealing with the crisis. The pictures of local people working to clear up the spill should be put before Hayward, Obama, and Jindal every day to remind them that leadership is not vested solely in those at the top of organisations or political parties, and that they should remember they can learn from everyone around them, whatever their position or role. Lesson 5: True leadership exists beyond title and office — elected leaders should remember this.
These are just a few thoughts about the situation unfolding in the Gulf of Mexico and some of the parallels that can be drawn for leaders. What are your thoughts? Do you have any constructive suggestions? And if you could send one message to the leaders in this crisis, what would it be? As ever, I look forward to, and appreciate, your views.
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