The BP Oil Spill Is a Wake-Up Call

Question: Will BP ever recover?
\r\n

\r\nJeffrey Hollender: You know, BP, when you think about it, has had\r\n a series of problems.  You might say it was a gutsy thing for a company\r\n who, you know, 99% of what they sell is petroleum to say, "We're going \r\nto be beyond petroleum."  Now, when they made an announcement, I was \r\nrooting for them to win, but it was a pretty audacious claim to make. \r\nAnd clearly not a claim they were wiling to stick with, because shortly \r\nthereafter they started getting out of the alternative energy business \r\nand wasted hundreds of millions of dollars claiming to be something that\r\n they really were not ready to be.  But then they had a terrible \r\nexplosion in a plant in Texas that killed some of their workers.  Then \r\nof course, they had this tremendous spill in the Gulf of Mexico. 
\r\n
\r\nThere is a series of patterns which goes back to the issue of what kind \r\nof culture do we have.  What kind of culture do we have that we ignore \r\nthe questions that must arise inside the company about the... this \r\nintelligence to do some of the things that we're doing?  That to me is a\r\n sign of a culture where those questions are repressed, those questions \r\naren’t answered and a handful of people are allowed to continue to do \r\nthe wrong thing because they ignore the challenges that are raised \r\ninternally. 
\r\n
\r\nAnd I think that BP, you know, is a metaphor in a lot of ways.  I mean, I\r\n think about this oil spill, which is a very visible representation of \r\nthe way that we're abusing the environment.  But it's really no \r\ndifferent than the way we handle chemicals.  We have an open spigot \r\nthrough which millions of pounds of toxic chemicals are dumped into our \r\nsociety into the air, into the groundwater, through our products—it just\r\n happened to be invisible.  The effects are still there—increased asthma\r\n rates, increased cancer rates in children—but we have many oil spills, \r\nwhether they’re chemicals, whether they’re petroleum.  And this goes \r\nback to the notion that we as a society and particularly we as \r\nbusinesses have all the warning signs of what's ahead.  You know, how \r\nmany more spills do we need?  How many more earthquakes do we need, or \r\nvolcanoes, or hurricanes?  I mean, the earth, in a sense, is telling us,\r\n "You can’t keep doing this."  There is a price that is going to be paid\r\n for your behavior. 
\r\n
\r\nQuestion:
How can companies better create a sense of corporate \r\nresponsibility?
\r\n

\r\nJeffrey Hollender: I don’t know whether Tony Hayward has \r\nchildren, but if he does, I bet he’s getting an earful from his children\r\n about how embarrassing it is to go to school every day as the child of \r\nthe president of BP.  We should not underestimate the pressure that that\r\n brings on CEO and senior management. BP today is not a company you want\r\n to tell people you work for when you show up at a party.  So, there is \r\npart of this social pressure that will come to bear on the company.  But\r\n we also need to hold the government accountable, the government has \r\ntotally, historically, not held these oil companies accountable for \r\ntheir responsibilities as we see with the Mineral Management Agency.  We\r\n need to support NGOs because often it is pressure from groups like \r\nGreenpeace, which I am a board member of, that will help tilt the \r\nscale. 
\r\n
\r\nLook, you know, you won’t catch me buying gas at a BP station probably \r\nfor the rest of my life. And I think that it is this combination of \r\nfactors: it's pressure from the government, pressure from the NGOs, \r\npressure from their internal employees, as well as what we can do as \r\nindividuals.  You know, you may think that in this day and age writing \r\nletters and emails doesn’t make a difference.  It does.  I can tell you \r\nas a business owner and manager, when someone writes a letter I know \r\nthat there's probably a hundred, if not a thousand people that feel the \r\nsame way that that person felt.  And that carries a lot of weight.  It’s\r\n not one letter or one email.  It is a representation of hundreds or \r\nthousands of people who feel the same way. 
\r\n
\r\nQuestion:
How does a CEO ensure that his or her entire organization \r\nis committed to sustainability?
\r\n

\r\nJeffrey Hollender: The challenge of moving the commitment to \r\nsustainability beyond senior management is ultimately a cultural \r\nchallenge. You have to send that message.  You have to incentivize \r\npeople.  If you pay out bonuses based upon increased sales and profits \r\nand not sustainability initiatives, where will people put their \r\nattention?  On profits and sales.  So, you have to embed these ideas and\r\n incentives within your culture.  You have to reward people who are \r\nsustainability leaders, not just the biggest salespeople. 
\r\n
\r\nAnd so it is ultimately a cultural challenge and you need to design your\r\n culture to function and be aligned with your sustainability \r\nobjectives—which also means that ultimately it has to be embedded in \r\ncorporate strategy.  The only way to be really responsible and really \r\nsustainable is if it's part of your strategy as a company.  It can’t \r\nexist in a compartment.  It really doesn’t work to have a \r\nsustainability/corporate responsibility police person who ensures that \r\neverybody else at the company is responsible.  That sense of \r\nresponsibility has to live in everybody that works in the company; in \r\nevery department, in the strategies and goals and objectives of every \r\ndepartment and every person.

Recorded on June 11, 2010
Interviewed by Jessica Liebman

"How many more spills do we need? How many more earthquakes do we need, or volcanoes, or hurricanes? ... The earth, in a sense, is telling us, 'You can’t keep doing this.' There is a price that is going to be paid for your behavior."

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