6 objectives for BP’s incoming CEO

How would you like to be the new boss of BP America? You wouldn’t want to be in Robert Dudley’s shoes? The new boss faces two huge messes: Deepwater Horizon and the corporate culture Tony Hayward left behind.

BP has finally announced that Tony Hayward is headed to Siberia. It’s fitting that Hayward would be sent to Russia, where he will help manage BP’s joint venture there.

In his place is the first American to ever run BP—Robert Dudley—a steady-spoken Southerner who’s quietly become the BP face in the gulf since he took over that role from Hayward in June. Ironically, Dudley, who grew up in Mississippi, is best-known for being CEO of the Russian business TNK-BP, the very same unit where Hayward is being exiled. There, Dudley performed well until he fled the country in a visa dispute that is said to have been a Kremlin-inspired campaign to destabilize BP there and bring it under more Russian control.

So what does Dudley need to do to salvage BP’s position in the U.S., which happens to be home to 40 percent of both BP’s assets and its shareholders? His prospects aren’t promising. As Rep. Ed Markey (D-Mass.) said, the Gulf of Mexico will spend years recovering from Hayward’s failed leadership. “The new leaders of BP will have an uphill climb to correct the legacy left by Hayward, indelibly inked by the disaster in the gulf.” John Hofmeister, former president of Shell Oil, said Dudley’s job is so onerous, “I’m not sure if one person can do it all.”

Regardless, here are the things he must try to accomplish:

1. Rally the troops. The new chief must persuade thousands of employees to embrace a culture of safety that Hayward apparently failed to instill. BP has one of the worst safety records in the offshore oil industry. The U.S. business has suffered three calamities in the space of five years—a fatal blast at a Texas refinery in 2005, an oil spill in Alaska in 2006 and now the Deepwater Horizon disaster. The UK’s Times Online ran a November 2009 story reporting, “Ruthless cuts by [Hayward] have produced results in higher than expected profits… More than 6,500 jobs have been eliminated and overheads have fallen by a third….Having already cut $3 billion from costs, he predicted that another $1 billion will be eliminated by the year end.” Perhaps it is time to invest in people, in safety and in rebuilding employee confidence in BP.

2. Show up, be human, be credible. The first item Dudley has already done by running the gulf operation since June. Dudley, an engineer by trade but a businessman by profession, recently served in a position some at BP refer to as the foreign ambassador. “Bob Dudley is the only senior executive who is totally untainted by any of the problems that have hit BP for the past five years,” says Fadel Gheit, an energy analyst with Oppenheimer & Co. Untainted though he may be, he’ll need all that diplomatic training and some on-the-ground, face-to-face visibility from Louisiana up to Capitol Hill to mend fences among BP’s partners in the gulf and to convince the U.S. government and public that they can trust it to safely do business here.

3. Provide assurance and stability. It is crucial that a change in leadership does not signal any wavering in BP’s commitment to take care of its own mess. If anything, it should signal a more fervent commitment to see this thing through for years to come. People in the gulf, business partners, and local, state and U.S. government need to know BP will stand by its commitments, no matter how large they may be.

4. Clean house. Several top U.S. executives have been tainted or have soured their relationships with the public and government. Dudley will need to clean house and replace his team with leaders and managers who can cultivate trust with critical stakeholder groups inside and outside BP.

5. Be forthright, compassionate and honest. Dudley needs to be the anti-Hayward. When he makes a comment or a commitment, he had better under-promise and over-deliver. He needs to connect with the public as though they’re his neighbors. He needs to be humble and homespun, not smug, flip and hubristic.

6. Be businesslike and pragmatic. The gulf community wants to get back to work. The oil industry wants to get back to work. And BP shareholders want the company to get back to work. BP shares have dropped $77 billion in value since the April 20 rig explosion that set off the spill, even with a recent rally. The stock market will be watching carefully for any sign of financial trouble — or to see if BP won’t resume its dividend — and sudden flight from the stock could erode Dudley’s internal support.

A tall task for one man to take on, but as PR and change management practitioners, it could be one of the most challenging and rewarding gigs of the decade. Hell, if it doesn’t kill you, it will make you stronger. Oh, and buh-bye, Tony.

Mike Mulvill is president of CRT/tanaka and blogs at The Buzz Bin.


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