So, BP is rumoured to have turned to Goldman Sachs and the private equity firm Blackstone Corp for advice. I’ve had no personal experience, but I’d wager my mortgage that the services of the likes of Goldmans and Blackstone don’t come cheap. So rather than squander its increasingly scarce shareholder funds, I’ve got some tips for BP’s boss on crisis management, gleaned from some of the America’s top chief executives and PR gurus, which are offered freely in a spirit of public service:
1) Don’t get a life. Tony Hayward, BP’s chief exec, has probably figured this out for himself judging by the universal hostility to his comment that “I’d like my life back”. When you are responsible for the firm that has caused America’s worst environmental disaster, your life is no longer your own, and wishing it were otherwise will only antagonise the public further. So what if the comment was an attempt to empathise with others whose lives have been disrupted by the oil spill; when you are the most hated man in America, no one wants your empathy.
2) Don’t joke. Here’s some advice Goldman Sachs could give you, but probably wouldn’t. When Lloyd Blankfein, the investment bank’s chief executive, said he was “doing God’s work”, it was said tongue-in-cheek, not, as it would have been easy to conclude from the press reports, as a serious theological observation. In a crisis, chances are that CEO humour will get lost on the way to the front page. But the bottom line, Mr Hayward: whatever else you do, resist the urge to quip “oil’s well that ends well.
3) Fly commercial; better still, walk…no, crawl. When the bosses of the small carmakers formerly known as the Big Three went to Congress to ask for taxpayer dollars to bail out their failing firms, they each flew in their private corporate jets, thereby confirming the public’s worst suspicions about their incompetence and lack of comprehension of the austerity being suffered by their customers. In a similar spirit, when Mr Hayward goes to testify before Congress on June 17th he should ideally arrive on foot—or failing that, in an energy-efficient Prius rather than a gas-guzzling SUV.
4) Don’t make big profits—or if you do, give them away rather than pay large bonuses to yourself and your staff. It was the profits that Goldman Sachs announced in early 2009, and the huge bonuses it paid out, that helped earn the investment bank the nickname “vampire squid” and made Mr Blankfein a hate figure. If only Goldman Sachs had made losses instead of profits, Mr Blankfein would have been pitied and then ignored, like Citigroup’s boss, Vikram Pandit. If Goldman had at least given away most of the profits, he might have been forgiven his joke. At the very least, he could have forsworn his bonus. If he had done so, he might have got lucky like Howard Schultz, the boss of Starbucks, who waived his bonus—only for his board to insist on paying him one anyway.
5) Become Warren Buffett. Only the Sage of Omaha could be cheered for calling derivatives “financial weapons of mass destruction” despite issuing some of the most exotic derivatives ever created and then campaigning to exempt them from the new regulatory regime being introduced by Congress. Only Mr Buffett could get away with defending Moody’s against congressional accusations over the rating agencies’ complicity in the financial crisis, when he had been a big shareholder in Moody’s at the time, and retain his reputation as a straight-shooter. No doubt BP will have to change its name as part of its post-spill damage-limitation rebranding, but maybe Mr Hayward should change his name too.
6) Quit while you are ahead. We have no reason to think that Tesco will soon be plunged into a crisis, but if it is, the plaudits heaped on Terry Leahy, its chief executive, on June 8th, when he announced his impending retirement, will provide further evidence of the wisdom of getting out before disaster strikes. Imagine how much better Mr Blankfein’s public image would be if he had retired at the end of 2008. How Mr Hayward must wish that he had retired on March 17th, one month before the oil spill, rather than merely selling one-third of his BP shares - worth around $1.2m then, but about half as much now.
7) Pray that a worse disaster strikes someone else.“Every day, Lloyd Blankfein must get down on his knees and thank God for the BP oil spill,” says one noted PR expert privately. (Maybe the spill is proof that Mr Blankfein is doing God’s work after all, then?) Being America’s most-hated boss seems to be a temporary position, the crown passing to a new troubled head each time a fresh disaster strikes. As Fake Lucas Van Praag tweeted the other day, “Even though Goldman maybe had non-consensual relations with the economy, it's not as bad as despoiling an entire coastline, right?” If it suddenly turns out that iPads are rotting their users’ brains, we will know whose prayers have been answered.