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Crisis management 101: What can BP CEO Hayward's mistakes teach us?

By Stephanie Chen, CNN
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Some of Hayward's biggest gaffes
STORY HIGHLIGHTS
  • Management experts say BP's Tony Hayward should have shown more empathy on oil spill
  • BP announces Hayward's replacement on Tuesday after months of PR blunders
  • One of Hayward's most serious mistakes: saying "I'd like my life back" on camera
  • Leaders in crises should work on communicating and building trust with the public, experts say

(CNN) -- It's a fundamental rule of crisis management: Think with a little less head and a little more heart.

That's a concept BP's Chief Executive Officer Tony Hayward should have embraced, some business school professors say. Instead, over the last 99 days, since the oil spill began in the Gulf of Mexico, Hayward has been criticized for a growing list of public gaffes in handling one of the worst environmental disasters in history, culminating in his departure as CEO, announced Tuesday.

Now Hayward's mistakes in the wake of a crisis have become a teachable moment -- a shining example of CEO no-nos -- at some of the top business schools across the country. At the Tuck School of Business at Dartmouth, professors are teaching Hayward's exit as a case study. Professors at Duke University's Fuqua School of Business already have students in summer courses writing papers on Hayward's costly mistakes.

Some management experts say Hayward's leadership failure started with his delay during the initial weeks of the spill to address the severity of the problem. Others point to his lackluster appearance in June before the U.S. Congress. Hayward testified, "I wasn't part of the decision-making process in this well."

And while fishermen in the Gulf lamented over the loss of their livelihoods, Hayward was photographed at a yachting race last month.

Many of the professors will likely be discussing Hayward's most famous public relations blunder -- when he uttered the offhand comment that he wanted his life back. He was standing on the Gulf Coast when he made the statement. It's a region that has suffered the deaths of 11 rig workers and an emotional toll unmatched since Hurricane Katrina obliterated communities five years ago.

"He would have done better and come out better if he had just empathized with all the folks in the Gulf region on how sorry he was," says Peter Topping, associate professor of organization and management at Emory University's Goizueta Business School, who also plans on incorporating Hayward's failures into his courses. "That this is a huge problem no one anticipated and we are so sorry for disrupting your life. That would have been so much better than 'I'd like my life back.'"

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The five-word remark sent a detached, insensitive message to the public and inhabitants on the Gulf Coast, Topping says. The words made many families feel that Hayward and BP simply didn't care. Hayward just needed to use a little more empathy in public, Topping said.

Paul Argenti, an expert in corporate communications at the Tuck School of Business at Dartmouth, says Hayward's inability to be transparent from the start of the crisis roiled the public's frustrations. In the early days of the spill, BP failed to present a specific plan on how the problem would be handled.

"They could have told us all the details along the way," Argenti says. "I felt they were holding back, saying it's not as bad as it was, blaming the government and all those things. People actually died in the situation."

For Argenti, one of the basic rules for managing an emergency is constant communication with the public. Without building a relationship with the community, he says, companies like BP face the danger of an information vacuum that becomes filled with assumptions, predictions and rumors, concocted by the public, that may be untrue.

In the world of social media, where news is viral, a statement --whether true or false -- can tarnish a company's credibility, he says.

Argenti also points to the Exxon Valdez oil spill in Alaska in 1989. Even today, the company continues to battle the stains to its reputation from the tanker spill.

Daniel Diermeier, a professor at Northwestern University's Kellogg School of Management, acknowledges cleaning up the oil spill is a difficult and complex task. But despite the difficulties, he says, Hayward should have made establishing trust with the public his first priority.

"It's not possible to find a quick solution, but you want to establish a trust to give you time to look for a solution," he says.

Several management experts following Hayward say they believe he has made a serious commitment to cleaning up the Gulf. And in recent weeks the company has become more apologetic, issuing advertisements to address its mistakes.

The company has also devoted billions of dollars to capping the well and to projects for saving the wildlife and ecosystems crippled by the spill. CNN attempted to contact BP Monday about Hayward's leadership performance and the company's projects to save the Gulf but did not get a response.

Still, in a time of a crisis, positive strides can often be overshadowed by the smallest fumbles, such as taking a posh yacht trip, or the slip of a few badly chosen words on camera, professors say.

"Whatever else might be his merits of leadership, his technical ability, his past accomplishments, one of the things is we expect them to stand up and be credible in times of crises," said Bruce Kogut, professor of leadership and ethics at Columbia Business School. "He obviously failed."

BP announced Hayward will be replaced by American Robert Dudley, effective October 1.

 
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