Claim your free 2010 double sided wall chart
He said that management was too directive and too fond of making a virtue out of doing more for less. “(BP) has lived too long in the world of making do and patching up this quarter for the next quarter,” he said.
It was a pep talk for staff bruised and battered by bad news from the deadly explosions at Texas City to the oil pipeline corrosion in Alaska, all blamed on cost-cutting. It was also, no doubt, an effort by Mr Hayward to project himself as a potential architect of change, a necessary image for a man who would like to be BP’s next leader.
BP needs a cultural shift because whoever wins the race for the top job will be leading a company built in Lord Browne of Madingley’s image — a highly centralised organisation with a presidential style of office that keeps its senior management on a tight leash and projects its public image from the chief executive’s podium.
BP has suffered greatly in its year of crisis because no one can speak but Lord Browne. Internally, his lieutenants bridle at the tight control kept over public communication. The people who lead BP’s core businesses are in charge of companies of FTSE 100 scale but, if they are not gagged, they are shepherded and actively discouraged from speaking to the media, even on a non-attributable basis.
It raises the question of who will be trusted to speak when Lord Browne finally gives up his job in 2008. More importantly, it asks: how will his successor learn to speak convincingly? Mr Hayward’s passionate plea for management to listen and reject the penny-pinching approach to resources would sound more persuasive if he had not been an arch exponent of the BP cost mantra in previous years.
Those lieutenants — Mr Hayward, John Manzoni and Iain Conn — have been put in an invidious position, forced to toe the line in an absurdly public but mysteriously silent race for the top job.
Lord Browne, more than anyone, ought to be keenly aware of the dangers of not listening. Fourteen years ago, the oil company was in a different management crisis, groaning under excessive debt and its staff in near-open rebellion over redundancies and an abrasive style of management. In June 1992, the board ganged up and asked Bob “Hatchet” Horton to go.
The key issue was his refusal to cut the dividend but his style of top-down leadership did not help. In the end, his successor, David Simon, completed and extended the redundancy programme initiated by Mr Horton.
The hatchet was passed to John Browne, who quickly set about abolishing fiefdoms like those that did so much damage at Shell. In the early years, he was fascinated by Enron and he admired Exxon’s discipline. He benchmarked BP against it, setting cost-reduction targets like skittles to knock down.
When BP expanded in mergers with Amoco and Arco, it formalised the central command in the so-called Green Book, a manual that described BP’s management framework, for the avoidance of any doubt.
Lord Browne’s presidential office is a streamlined way of running a business but it leaves the organisation a bit helpless when errors multiply.
It is the antithesis of the former Shell. While the Anglo-Dutch company was run as a collection of independent and sometimes warring businesses, BP was transformed into a very tall pyramid with Lord Browne sitting alone at its apex.
In an interview with The Times in 1996, the BP chief suggested the group was like a living creature. He said: “It’s a society as well as a company and it corrects itself when it becomes uncivilised.”
Articles from our sister site WSJ.com:
You may be asked to subscribe to read certain articles
Industry sectors news at a glance. Interactive heatmap, video and podcast
Everything the Business Traveller needs to know to make a better trip
Get ready for the winter sports season, with our resort guides and snow reports
We are backing British business, what is the confidence of the nation and what businesses are succeeding?
Growing demand for energy, oil that is harder to reach and the rise of carbon dioxide emissions. We examine the energy challenge
With rail travel in Europe on the rise, we review the benefits of travelling by train
In this special section we explore new food trends to help improve your dinner party and impress guests
Enjoy further reading from Travel to Fashion, Business to Sport, discover more
1998
£47,955
2004
£56,950
Essex
Check your free Experian credit report before applying
Car Insurance
£100,000
Barnardos
UK
£123,460 pa
The Law Commission
London
Southwark County Council
Competitive + bonus + benefits
Manchester United
Central London
Moments from Battersea Park.
For sale with Winkworth
Find out about shared ownership.
See your free Experian credit report beforehand
Includes flights, accommodation with room upgrades, transfers city tours in Hong Kong and Bangkok.
PremierHolidays.co.uk
For your ultimate tailor-made ski holiday, click here
Get covered on your travels with a superb range of policies at great prices. Visit InsureandGo.com
Choose from the beautiful landscape and tranquil beaches of Oahu, Kauai, Maui & Big Island.
Contact our advertising team for advertising and sponsorship in Times Online, The Times and The Sunday Times, or place your advertisement.
Times Online Services: Dating | Jobs | Property Search | Used Cars | Holidays | Births, Marriages, Deaths | Subscriptions | E-paper
News International associated websites: Globrix Property Search | Milkround
Copyright 2009 Times Newspapers Ltd.
This service is provided on Times Newspapers' standard Terms and Conditions. Please read our Privacy Policy.To inquire about a licence to reproduce material from Times Online, The Times or The Sunday Times, click here.This website is published by a member of the News International Group. News International Limited, 1 Virginia St, London E98 1XY, is the holding company for the News International group and is registered in England No 81701. VAT number GB 243 8054 69.