BP and the art of reputation management

There are lessons in the Tony Hayward saga for every person operating at a senior level in business. Like some of the wildlife inhabiting the Gulf of Mexico, the departing chief executive of BP has been enveloped and lost to the Deep Horizon tragedy and the ensuing oil slick-crisis. Announcing his departure, Hayward said that he had been vilified and felt he had no choice but to step down so that the company could move forward and start the recovery process. It may be true that the man who succeeded Lord Brown at the helm of one of Britain’s biggest companies has been on the receiving end of some rough treatment from both the Washington establishment and the media, but the last failing days of his tenure have also been an abject lesson for anyone serving in a leadership position in modern business. CEOs need to accept that sometimes the game changes. When a crisis visits the organisation, the day job – and normal everyday rule of law – goes out of the window. The CEO needs to understand what is required, know how to communicate and demonstrate assured leadership – not just to his own organisation but the wider world. There were three particularly memorable episodes in the sorry Hayward saga. First, there was the “I want my life back” comment, which while we all knew what he meant (sort of), was not a little offensive to those embroiled in the crisis and hopelessly crass to the rest of us. Secondly, there was the painful performance before the senate committee in Washington, when the BP boss failed to show the required humility or demonstrate a complete grasp of the facts. He seemed out of his depth, or worse obstinate and unengaged. This was then followed days later by the painfully powerful image of Hayward enjoying an idyllic day’s sailing on The Solent with friends and family – an obvious contrast to what was happening a few thousand miles away on a different stretch of water. I remember thinking will somebody please save this man from himself? It was clear his position was untenable. Compare his performance to that of Michael Bishop when a British Midland flight crashed on the M1 motorway at Kegworth in 1989. The chairman raced to the scene and made him self available for interviews immediately, displaying the appropriate concern and compassion for victim’s families and the injured. It is an oft-used example of crisis management best practice. It is not just the gravest human situations that require the mindset displayed by Bishop on that day. Things go wrong, operations fail, customers become disenfranchised and brand reputations hang in the balance. A friend of mine recently listened to a senior director at Eurostar reflect on an incident last Christmas when five passenger trains broke down in the icy conditions, leaving hundreds of passengers trapped underneath the English Channel and thousands more stranded. There was no plan – there was no organisational crisis button to push – when the media came calling. It was a PR disaster, with the management coming in for heavy criticism. In this market, there was an interesting incident for Domino’s Pizza in the US late last year when two store workers in Conover, North Carolina, filmed each other doing some fairly nasty things to food. The video they posted on You Tube went viral, watched by more than a million people within two days and picked up by the national press and news channels. Domino’s US president Patrick Doyle made his own video and posted it where the damage was being done, on You Tube. He said the incident was “isolated,” the Conover restaurant had been “shut down” and “sanitised,” as “there is nothing more important to us than our customers’ trust”. The two workers were sacked and later turned themselves in to Conover police. It was an impressive and effective response to what could have been a damaging incident. CEOs and senior management who don’t pay enough attention to learning the craft of crisis management and communication – and instilling the discipline throughout their organisation – run the risk of being exposed, as Tony Hayward has found to his cost. Wagamama...GBK...TGI's All of sudden bid activity is back. TGI Friday’s UK refinances, Capricorn finally makes its move for GBK-operator Clapham House, and Wagamama, one of the most-admired chains in UK casual dining, is put up for sale by Lion Capital. Senior managers in the UK eating and drinking out market will be paying serious attention to the Wagamama situation in particular – it will offer a real benchmark for the sector. Lion expects to fetch up to £260m for a business that will today unveil ebitda up 22% to £20.9m, on sales close to £110m. That sort of multiple will put a spring in everyone’s step.