Interactive Session: Media & CEO Effectiveness

Kevin Tay and Marret Arfsten,  second-year students at the Tuck School of Business at Dartmouth, led an interactive session using the 2010 BP oil spill crisis as a case study for how the  media impacts CEO effectiveness .  By holding an interactive session,  current and future business leaders could learn from each other’s perspectives.

Kevin kicked off the session by walking through the timeline of the BP oil spill crisis, focusing on CEO Tony Hayward and the statements and actions he made as the crisis evolved.  One notable moment came when Hayward made his infamously unfeeling comments, six weeks after the spill:

“There is no one who wants this thing over more than I do; I’d like my life back.”

Hayward subsequently apologized on Facebook for his comments, saying he was “appalled” when he heard them on TV, and apologized to the families of the 11 men who lost their lives as a result of the accident.  At this point, however, it was too late for Hayward to unwind the negative impact of his comments on the public’s perception of his leadership.

The rise of social media was also an interesting factor during the crisis.  BP had its own Twitter account, @BP_America, but a parody account, @BPGlobalPR, that was set up in the wake of the controversy ended up having more than 10x the followers than BP’s official twitter handle (125K vs. 10K).

To dig deeper into how the relationship between CEOs and the media has evolved over time, Kevin challenged the group to discuss how the CEO’s reaction differed between the BP crisis in 2010 and the Exxon Valdez oil spill in 1989.   The panel audience broke into small groups for 20 minutes to discuss their perspectives.

When the group reconvened, some of the ideas brought up included:

  • BP CEO Hayward and his team needed a crisis management plan in place, include a crisis communication strategy.  Kevin showed a video of Hayward admitting after the crisis that BP was more or less improvising their response strategy from day-to-day as the crisis worsened, instead of relying on a pre-existing crisis management plan.
  • CEO Hayward did a good job of immediately going to the site of the accident, unlike Exxon’s CEO Rawl, who did not visit the site until three weeks after the disaster.  However, Hayward could have done a much better job of expressing his  dismay that the crisis happened, while still conveying that he was calm and in charge.  Hayward appeared too stoic  when filmed on camera, which the public translated as him being unfeeling.
  • Unlike the case of Exxon Mobil, in which the tanker that crashed was owned by Exxon, the damaged oil rig was leased by BP from Transocean.  Despite the fact that Transocean was responsible for the explosion, the situation will go down in history as the “BP Oil Crisis”.

Building on those comments, Marret discussed how empirical research on social psychology and management applies to the BP and Exxon Mobil cases in terms of:

1.  Impression Management: Efforts focused on symbolic actions

Example: Exxon Mobil takes out full-page ads in 165 newspapers to present how much work Exxon has done to repair the damage of the crisis.

2.  Self-Justification: Impaired judgment, buck passing, procrastination

Examples: Exxon CEO Rawl blames the Coast Guard for the slow pace of the clean-up, Hayward blames Transcocean.

3.  Cognitive Download–Defensive and entrenched view of the world

Example: Hayward’s “I’d like my life back” speech

The general conclusion was that in 2010, CEO Hayward faced increased media scrutiny compared to CEO Rawl in 1989, especially from social media outlets.  At least partially due to  this intense media attention, Hayward was pushed out of his CEO role within five months of the crisis, while Rawl stayed in his position for four years.

BP CEO Hayward and his team needed a crisis management plan in place, include a crisis communication strategy.  Kevin showed a video of Hayward admitting after the crisis that BP was more or less improvising their response strategy from day-to-day as the crisis worsened, instead of relying on a pre-existing crisis management plan.

CEO Hayward did a good job of immediately going to the site of the accident, unlike Exxon’s CEO Rawl, who did not visit the site until three weeks after the disaster.  However, Hayward could have done a much better job of expressing his  dismay that the crisis happened, while still conveying that he was calm and in charge.  Hayward appeared too stoic  when filmed on camera, which the public translated as him being unfeeling.

#CouncilBusinessandSociety

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