News of British Petroleum’s Deepwater Horizon oil spill has reached every corner of the globe. The spill has already far surpassed the Exxon Valdez oil spill of 1989, in which about 11 million gallons of oil was spilled off the coast of Alaska. Official figures suggest that the Horizon well is releasing around 200,000 gallons of oil into the Gulf of Mexico every day, and other figures have that number well over 1 million gallons per day. When all is said and done, the Horizon spill will likely become one of the largest oil spills in history.
This story highlights two very important aspects of executive leadership: 1) crisis management and 2) corporate responsibility.
While relatively few CEOs will have to confront a crisis of this magnitude, teaching crisis leadership is still a necessity. Leadership in a crisis can be learned, and it can be appropriately scaled to match the situation.
During a crisis, leaders must:
1. Act Timely. Leaders cannot afford to sit on their hands while the crisis grows unchecked. The longer the crisis continues without intervention, the harder it will be to resolve, and companies do not want to look apathetic.
2. Scale their Response. The response to the crisis must match its size. All personnel required to resolve the crisis should be informed and mobilized immediately. When in doubt, it is better to over commit than under commit resources.
3. Make Amends. After the crisis is under control, leaders must find a way to make amends with those affected by the crisis. This will help companies retain current customers and prevent alienation from potential customers.
It is not enough for a company to resolve a crisis; they must also take responsibility.
BP executive Tony Hayward has put his face on this crisis and has communicated BP’s full responsibility for the cleanup effort. While many people are critical of oil companies in general, Hayward has tried to save face for BP by stating the company would pay for the cleanup effort and plug the leaking well.
By appropriately responding to a crisis and taking responsibility, executive leaders and their companies will have a better chance of maintaining positive public relations, and while many executive leaders may not have to deal with national or global crises, training and preparation will assure a company will not be caught off guard.
Related book summaries in the BBS library: Leading in Times of Crisis, Corporate Reputation, Beyond Good Company, Just Good Business
Business Book Summaries 