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Obama and oil spill: Lessons from corporate world

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Associated Press
July 25, 2010
— As chief executive officer of America Inc., Barack Obama has walked the factory floor when it comes to managing the federal response to the Gulf oil spill, going directly to front-line workers.

He's used wiles respected in the boardroom in wringing a $20 billion commitment from BP.


But what was that talk about kicking butt? That's so assembly line Ford Motor Co., circa 1930.


And why on Earth did it take him so long to talk to BP's chief? A real CEO would have had Tony Hayward on the phone in a New York minute.


The president is not, of course, the head of a company. He's accountable to the public in ways a chief executive is not to shareholders. Governance and politics differ from effective corporate management while sharing certain qualities.


But everyone wants to see the get-it-done ethic of the business world play out in the Gulf of Mexico and in the often confused lines of federal authority.


The Gulf calamity, like the presidency itself, is a crash course in executive management for a man who came to office with no such experience to speak of. How's he doing?


A mix of real-world CEOs and business theorists interviewed by The Associated Press sketched out qualities of a corporate executive and judged Obama by them:


CONSULT, DON'T INSULT


Obama's tough words about BP while refusing for weeks to talk to Hayward. The dispatching of the attorney general to the Gulf in a prelude to legal action. The keister-kicking threat. It all might make for good politics or it might not.


To Drew Greenblatt, president of Marlin Steel Wire Products LLC of Baltimore, it was a failure of executive leadership. CEOs talk first and sue only if necessary, he says.


"Those are inflammatory strategies," he says. "We don't want people rushing to their lawyers at this moment. We want people to cap the oil well rather than the idea well.


"American factories don't think this way. We try to come up with clever ideas of how to get out of this pickle. The first thing we should be focused on is solving problems, not placing blame."


Greenblatt found it "stunning" that Obama let so much time lapse before meeting the BP chief after the spill. "I would have had Hayward in my office that afternoon."


Dyke Messenger, CEO of Power Curbers, a manufacturer and exporter of concrete paving machines in Salisbury, N.C., said earlier meetings with BP leaders would have helped both sides push common goals for the response. Obama and the BP brass "are the ones who make decisions for those organizations, and if you've got common thought at the senior level then it flows down from there," he said.


That common purpose would discourage Obama from publicly flogging BP a tempting move given public anger toward the company. Messenger said both sides would have been more focused, earlier, on plugging the hole.


"He can't make a deal with BP at the CEO level then turn around and hammer them," Messenger said.


The company and government have achieved their first major success a new cap stopped the flow, at least temporarily. But disagreements have broken out over what to do next.


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GETTING WITH THE PEOPLE


Although Obama is big on "transparency," the Oval Office lacks the glass walls favored by many in business as a way for bosses to stay connected with workers.


That's why it's been important for him to visit the Gulf and talk to response workers and citizens his way of walking the factory floor, Messenger says.


"Sometimes they hit you between the eyes with a comment you just hadn't thought of," he says about the employees he encounters this way. "For Obama, that's where being on the ground and talking to citizens makes a difference."


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ART OF NEGOTIATION


Entrepreneur Siamak Taghaddos, co-founder and CEO of Grasshopper Group LLC of Needham, Mass., says the knocks on Obama for being slow or late to respond are off base. "I see it as a negotiating tactic" worthy of the boardroom, he said.


Taghaddos said it was not clear right away that securing compensation would become a top priority. By keeping some distance until that issue clarified, Obama might have strengthened his hand in obtaining the compensation fund from the oil company.


If Obama had pushed harder and for more, Taghaddos said, BP might have seen the demand as no better than a bankruptcy filing. "His being able to go in and get a $20 billion guarantee, minimum, and in that way, shows great negotiating skills."


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KEEPING BALANCE


The U.S. government, an enterprise with an assortment of interests unmatched in the business world, can't become fixated on the spill, however horrific, at the expense of other big things, says Joseph Schocken, president of the Broadmark Capital investment bank in Seattle.


"For a real CEO, the most important thing to keep in mind is your overall responsibilities," he says. "Obama is not CEO of the spill. He's the CEO of the United States."


Obama has kept that balance, Schocken said, and realized that crises are always opportunities of some sort.


"You saw that when the president in the Oval Office used the oil spill as a lead-in for a discussion about alternative energy," he said. "In the same way, it is a metaphor or a teaching tool for the correct role of government."


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CHAIN OF COMMAND


For much of the time, the crisis has lacked a clear sense of who is really in charge. That's a source of frustration, if not outrage, especially among Gulf leaders and residents.


Obama "created a sense of far greater control than the government actually has at this point," said George G. Daly, dean of the McDonough School of Business at Georgetown University.


He questioned whether the flashes of temper from the president, as seen when he said he'd fire Hayward if he could, are useful and authentic.


"He has a cool, articulate, analytical style," Daly said. "He traded it for this angry rhetoric that may not have suited him well in this particular interest."


J. Robert Brown, who teaches corporate governance at the University of Denver Sturm College of Law, said Obama "has to show sufficient umbrage and concern, but not alienate BP so much that he alienates the very company that has to fix the problem." In his view, Obama has walked that line.


Permanently stopping the oil flow and spread is the prime mission of government and business together, and it remains to be seen whether the president or any CEO has met that bottom line.


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AP writer Cal Woodward contributed to this report.



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