Recently, there have been two very good examples of the perceived importance of CEOs: Steve Jobs' dealing of the iPhone 4's antenna issues (not to mention the way he has turned around Apple since he re-joined them over 10 years ago) and Tony Hayward's imminent departure from BP are two examples that seem to suggest that a CEOs actions can make or break a company. While the example of Jobs is clearly that of a CEO having a positive influence and Hayward's is an example of the negative influence of a CEO, they both suggest that a single person, at the top of a company, can have a disproportionate impact. The question that then arises is - is this true or not? Is Apple's success due to Steve Jobs? Is BP's failure Hayward's fault?
The truth is that it is impossible to say how much of a company's situation (positive or negative) can be attributed to factors associated with its CEO. Is a company's success attributable to its CEO or merely a result of circumstances? While, for obvious reasons, it should be impossible to conclude how much of a company's situation is directly the result of a CEO's actions, it seems that everybody has concluded that the role of a CEO is of paramount importance - the public, which has been demanding Hayward's head ever since the spill begun; the boards that decide to pay CEOs vast amounts of money; and shareholders who often make investment decisions based on management teams.
The importance of a good CEO and management team is undeniable but what is often ignored is that successes (or failures) that are sometimes attributed to the company's leader may simply be a result of context rather than personality. Will BP be better able to clean up the Gulf and its image now that Hayworth is no longer there? Are people willing to buy the iPhone 4 in spite of its call-reception problems solely because Jobs says that it is not that big of an issue? I, for one, am not so sure...
Showing posts with label BP. Show all posts
Showing posts with label BP. Show all posts
Wednesday, July 28, 2010
Wednesday, June 16, 2010
Do Silver Linings Exist?
After several weeks and millions of barrels of oil spilt, Barack Obama addressed the American public last night from the oval office about his administration's response to the BP oil spill in the Gulf of Mexico. While it may still be too early to fully assess the damage caused by the uncertain amount of oil that has leaked out of BP's Deepwater Horizon well and it may even be too early to determine who is ultimately responsible for what is sure to be the biggest environmental disaster in American history, it is not too early to begin to hope that the appropriate lessons are learned.
Much like the silver lining of the worst financial crisis in a generation was the fact that it would hopefully spur on much needed financial regulation and much in the same way that the current European fiscal crisis will hopefully bring with it increased financial awareness in what have been free-spending governments, the seemingly never-ending oil spill will hopefully usher in an era of increased environmental awareness. However, it is far from certain that any of the above-mentioned crises will result in anything more than band-aid solutions and political blame games. It is often remarked that a crisis should never be wasted - implying that along with tough times, opportunities often roll along. It is unfortunate that it is a characteristic of human nature that we are often only called into action after things take a turn for the worst but what is even more unfortunate is that problems are often never fixed, even after a disaster presents a perfect opportunity to do so.
In the specific case of the BP oil spill, what would constitute a reasonable outcome would be something along the lines of realizing the perils of relying so extensively on polluting fossil fuels and consequently taking steps towards moving away from such a dependence into cleaner, renewable and eventually cheaper sources of energy. However, what is more likely to happen is that BP will end up spending a lot of money cleaning up the oil spill, then cleaning up its image while the American government moves to ensure that its regulatory framework is better placed to ensure the safety and reliance of deep sea oil wells. Barack Obama's speech (in terms of content and tone) made a clear argument towards aligning the United State's energy policy in the direction of decreased oil dependence and increased renewable energy sources; however, only time will reveal which path was chosen.
Much like the silver lining of the worst financial crisis in a generation was the fact that it would hopefully spur on much needed financial regulation and much in the same way that the current European fiscal crisis will hopefully bring with it increased financial awareness in what have been free-spending governments, the seemingly never-ending oil spill will hopefully usher in an era of increased environmental awareness. However, it is far from certain that any of the above-mentioned crises will result in anything more than band-aid solutions and political blame games. It is often remarked that a crisis should never be wasted - implying that along with tough times, opportunities often roll along. It is unfortunate that it is a characteristic of human nature that we are often only called into action after things take a turn for the worst but what is even more unfortunate is that problems are often never fixed, even after a disaster presents a perfect opportunity to do so.
In the specific case of the BP oil spill, what would constitute a reasonable outcome would be something along the lines of realizing the perils of relying so extensively on polluting fossil fuels and consequently taking steps towards moving away from such a dependence into cleaner, renewable and eventually cheaper sources of energy. However, what is more likely to happen is that BP will end up spending a lot of money cleaning up the oil spill, then cleaning up its image while the American government moves to ensure that its regulatory framework is better placed to ensure the safety and reliance of deep sea oil wells. Barack Obama's speech (in terms of content and tone) made a clear argument towards aligning the United State's energy policy in the direction of decreased oil dependence and increased renewable energy sources; however, only time will reveal which path was chosen.
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