Are some things just ‘unspinnable’?

The resignation, or removal, of Tony Hayward from the top job at BP prompts me to ask the question, are some things just unspinnable?

This is a difficult one for a PR man to answer. Those of us in PR tend to think that communication is the answer to everything, just as lawyers think that the legal system provides all the answers and accountants think that close perusal of the balance sheet, P&L and cash statement will tell you all you need to know.

In Hayward’s case there were PR gaffes which undoubtedly made the situation worse. Sailing in the Isle of Wight Round Island Race during the early days of the Deepwater Horizon Disaster and declaring that “I want my life back” were pretty crass things to do and say.

However, if you look at the circumstances that he was being forced to communicate in, I am not sure that anybody, regardless of nationality, demeanor or ability to deliver a sound-bite could have dealt with the media crisis that engulfed him.

Hayward was faced with an almost perfect storm. On top of an appalling environmental disaster, he was faced with communicating the facts of BP’s shocking safety record (if anyone deserves opprobrium heaped upon him it is Hayward’s predecessor Lord Browne, King of Cost Cutting to deliver shareholder value); a US President desperate to avoid comparisons with the Bush Administration’s response to Hurricane Katrina; mid-term elections due in November which offered Senate investigating committees the opportunity to grandstand in front of the cameras, whilst all the time real-time TV footage showed oil spewing out of the well at an alarming rate.

Are any of us in PR saying we could have done any more than apply a slightly more effective sticking plaster to this gaping wound?

PS: One other point. I’m struggling to agree with those who are criticising BP for not “getting out in front of the story” when it came to announcing Hayward's departure. Rules is rules. Publicly quoted companies cannot just bring forward ‘announcements’ that Chief Executives are leaving because the media has got a sniff of something. The very earliest this announcement could have been made was 0700 Monday morning. Leaving it for another 24 hours might look a bit lackadaisical but let’s face it, as corporate reputation goes, there is not much further down to go for BP.

Obama puts BP in Deepwater

My first reaction to President Obama’s slating of BP was that those in glasshouses should not throw stones. I certainly would have liked to bring American business practices in this country to the President’s attention, particularly in relation to Kraft’s takeover of Cadbury and the leveraged buy-outs of our two most successful football clubs which leaves both now cumulatively £1.5 billion in debt.

However, while it is clear that the President is justifiably seething with BP, cold political calculation is also playing a part here. The President faces a difficult set of mid-term elections in November in which Louisiana, and in particular Florida, are likely to play key roles. He will be desperate to avoid the sort of backlash that hit the Clinton Administration in 1994 that ushered in Newt Gingrich and his ‘Contract with America’, which all but stopped the previous Democratic Administration in its tracks.

I also suspect that Obama sees opportunity in this crisis. One of the major stumbling blocks to reform in the US is the Senate, which remains precariously balanced with 57 Democrats, 42 Republicans and two independents, leaving the Democrats only a handful of seats short of avoiding a filibuster, by which a Senator can literally talk a bill to death without it ever coming to vote. Obama may be calculating that precious climate change and clean energy legislation can be rammed through the Senate with support of Gulf State Senators who dare not vote against such a bill at this moment in time.

Almost as big a question now is what happens to BP? Again, Obama has put them on the rack by demanding a $20 billion escrow account to compensate all those affected by the Deepwater disaster. The problem is that the money would most likely come from the shareholder’s multi-billion pound quarterly dividend which institutional investors are expecting in the coming weeks. The Board is therefore stuck between a seething President of the United States and very nervous, and potentially very angry, shareholders.

The smart money at the moment is that BP will muddle through in the short term before being taken out by a competitor once the furor has died down. This is infinitely preferable to bankruptcy, but whatever happens you have to suspect that this Board and the company is all but finished.