Tuesday, November 9, 2010

BP Comes Through for Us Again

BP’s former CEO Tony Hayward has given us another teachable moment!

In an interview with the BBC, Hayward has conceded his company was not prepared for the disastrous oil rig explosion that left eleven workers dead and an oil spill that seemed to go on and spread forever.

He also confessed, the media frenzy that followed was bad enough, but the giant oil company faced financial ruin for a while because no one would loan them money to help cover the millions of dollars in daily losses BP was facing.

Hayward admitted the company’s contingency plans were nowhere near adequate and he told the British reporter “we were making it up day to day.”

And Hayward’s successor Bob Dudley confirmed to the BBC, ‘With a company the size of BP, its reputation, what it does – you almost can’t quite believe how close you are” to financial disaster.

The lesson is simple and stark: Imagine the worst thing that could ever go wrong with your organization and then imagine something a little worse. Then plan how you would manage that.

Plan for the operational part of the crisis. Plan for dealing with the communication challenges with employees, vendors, customers/clients, investors and regulators. Then develop a plan to help you recover from whatever can go wrong and return to near normal operations as quickly as possible.

Don’t get caught with your proverbial “pants down” like BP did.

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