BP: A Glittering Jewel of Corporate Ineptitude

I’ve been trying to avoid commentary on the BP oil spill, hoping it would go away. But after 60 days, my hand is forced. I didn’t really understand the attacks on George Bush for hurricane Katrina; he didn’t cause the hurricane and the local/state leaders should have been better prepared with a response. Likewise, I don’t blame Obama for the BP oil spill – to a point. So who really is at fault? BP. No question. But not because of making an environmental mess in the Gulf, but rather by destroying the prospects for offshore oil exploration in the US. The mistakes that BP has made would fill a business school text book. As one of my grad school professors put it, “…they not only shoot themselves in the foot, but reload the gun and keep firing”. If they didn’t know beforehand, to not comprehend within the first 48 hours the consequences of inaction for themselves, their shareholders, and their future in oil exploration is the very definition of incompetence. There are still people who cannot say the name Exxon without coupling it with Valdez, referring to what was, before April, the worst oil spill in US history. And that was 21 years ago. You simply can’t be in the oil business and not have a contingency plan for an accident like this. And it is not possible to overspend on a solution to stop the leak and restore environmental integrity.

The BP CEO has the been the icon of corporate incompetence in his public relations. Quotes like ‘it’s a tiny spill relative to the size of the ocean’ and ‘I won’t comment on who is responsible until the investigation is complete” make us wonder if this guy ever had a class in marketing or even knows anyone in public relations. He might as well strangle a baby pelican during his press conference, throw it on the ground and spit on it before flying off in his (black smoke spewing) helicopter. Even if he doesn’t care a lick about the environment, he has to care about his shareholders, who likely won’t see a dividend for the next 12 quarters.

The sad thing is that this could have been an excellent opportunity for BP had they managed it better. Like Rahm Emmanuel says, “a crisis is a terrible thing to waste”. Imagine if BP came out within 24 hours of the accident and capped the leak, cleaned up all the oil in the gulf, and compensated anyone who was displaced by the problem. They would then be ‘the responsible energy company’, who cares about their neighbors and the environment no matter what the cost. Imagine the ad campaign that some overpriced PR firm could launch. “Wouldn’t you want this kind of energy company helping the US break their dependency on foreign oil?” If executed effectively, BP could have even improved their public image because of this. But instead, they have stained themselves with a proven a string of ineptitude that even congressional beneficiaries can’t defend.

So how does Obama fit into this? Some right wingers have succumbed to the temptation to bash Obama’s leadership on the subject. But the same people to sprint to the nearest microphone to condemn government takeover of corporate America shouldn’t be griping that government isn’t taking over the oil industry. One thing government should do is protect the people, and BP’s blithe ignorance of the situation leads us to wonder if they even care about finding a solution to this disaster. If the government can’t enforce some kind of prevention or penalty, what is to prevent any kind of corporate abuse? Imagine the military was dumping nuclear waste into the Gulf of Mexico or one of the Great Lakes. Without a credible threat that the government would take action, who is to stop them? This is another missed opportunity for Obama to show leadership. We don’t expect him to be an expert on capping oil wells, but he hasn’t clearly shown the government’s resolve for protecting the people. And the senate hearings are a joke, as they always are – a grandstanding opportunity for senators with abysmal approval ratings to pretend they are champions of the people.

If I were CEO of Exxon, Shell, Chevron or even Halliburton, I would start spending billions to solve this problem ASAP. The first one to cap the leak and clean up the mess stands to reap some significant PR gains.