Monday, June 21, 2010

BP: Management and measurement

Not for nothing did BP CEO Tony Hayward take a break to go watch a yachting race off the coast of England over the weekend. Hayward has been vacationed in another sense, gone from his position as feckless BP pointman for matters related to the Gulf of Mexico oil spill.

Bob Dudley, BP’s managing director, takes over in front of the microphones, hopefully with more sensitivity than Hayward ever had. Hayward can’t even take a vacation in a way that doesn’t reflect poorly on BP’s image. “Hard to do any worse than the last guy,” commented Flybynite at The Huffington Post.

Dudley starts with at least two advantages right from the start: First, he’s an American citizen, something that matters given the whiffs of anti-British sentiment starting to rise in the wake of the spill. For all BP’s avowed concerns, it just looks good for a company as big as BP to have someone out front on this crisis with the skin-in-the-game of citizenship.

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And then there’s the regional factor: Dudley hails from Hattiesburg, Miss., where he lived as a child, The AP reported on Sunday. That connection may be from long ago, but considering Hayward’s dismal lackluster performances with a British accent, giving BP the voice of a son of the South might calm the waters. At least a little. For a minute.

Until people look again at the damage that’s still going on, minute by minute, in the Gulf of Mexico. Among the most recent U.S. government estimates is one that puts the current spill rate at between 35,000 and 60,000 barrels — roughly, from 1.47 million to 2.52 million gallons of oil — every day. The BP estimate, of course, has been much (and laughably) lower in recent weeks.

At least the one for public consumption. A recently discovered internal document had BP privately estimating the spill rate at 100,000 barrels a day.

What’s known more or less for sure is that BP has been able to only capture about 18,000 barrels a day, thanks to its latest containment efforts.

The Washington Post reported on June 15 that BP has ramped up “a new plan that will put enough vessels on site by the end of June to handle 53,000 barrels a day … the company said it will ramp that up to 80,000 barrels by the middle of July.”

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We’ll see. We’ve been stung by BP’s fumbles and missteps before. The enormity of this catastrophe and Hayward’s reaction to it has reflected a company as much at a loss for numbers as it’s been at a loss for words.

Clearly, BP can’t calibrate the damage done by Hayward’s woeful PR performance on his company’s behalf. And as we know, they don’t even have a handle on the amount of crude oil currently suffocating the Gulf of Mexico and its once-teeming indigenous life.

As the White House has ratcheted up the pressure, as the financial costs skyrocket — and the hurricanes haven’t even hit yet — BP is living and dying by a fact as true for an oil spill as it is for modern business: You can’t manage what you can’t measure.

Image credits: Dudley: Via The Huffington Post. Oily hand: Associated Press. BP logo: BP plc.

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