Leasedrive Velo Blog

Roddy Graham, Commercial Director

Deepwater Horizon are two words BP, its employees, shareholders and more importantly still, the people living along the coastline of the Gulf of Mexico, wished they had never heard of. Deepwater is the polite term for what BP currently finds itself in. For the poor people, and the trouble is that most of them are poor, around the Gulf the deep oily mess they find themselves in is worse still. Fishermen find themselves fishing for oil, not fish. Tourism in the region has been devastated. The final environmental impact of the disaster has yet to be properly calculated. Now in its tenth week, the cost to BP so far amounts to $2bn and climbing. And on Barak Obama’s insistence, it has set aside $20bn to meet compensation claims.

Worst still is that ten weeks on oil is still spilling in the Gulf at a rate approaching 40,000 barrels worth a day. The company estimated it collected 23,900 barrels-worth last Sunday but the US administration estimates 60,000 is pumping into the waters each day. A relief well to finally stem the flow will not start operations until early August so the environmental disaster continues. The Exxon disaster pales into insignificance by comparison.

Even worse still for BP are other leaks. Those revolve around the company having allegedly bribed officials and cut safety corners. Like aircraft, oil rigs are designed with back-up systems. If one shear ram fails, as happened on Deepwater Horizon, another should kick in. However, in the BP case, the second one didn’t due to leaking hydraulic fluid, something that had been observed weeks before in one of the control pods and reported to the company. Normally, the rig would have been shut down to repair the fault but BP allegedly just shutdown the faulty unit and in so doing didn’t have a back-up system.

Nor should it be forgotten that 11 workers died on the Deepwater Horizon rig on April 20, when an explosion triggered the current environmental disaster. Something that beleaguered chief executive, Tony Hayward significantly failed to do, writing on Facebook that he wanted his life back! Ouch, PR disaster number one!

Then came his appearance at the US Congressional Committee last week where his performance was shambolic to say the least. Caught in the lion’s den, under the full glare of the media and facing naturally hostile questioning, Hayward was accused of stonewalling the Committee. In seven hours of questioning he admitted not knowing the answer over 60 times and showed little genuine remorse. PR disaster number two.

However, Hayward still had one more PR disaster trump card. The power of the social media came to the fore when somebody Twittered that Tony Hayward was enjoying life on the high seas in a corporate sailing event off the Isle of Wight. America was apoplectic with rage. PR disaster number three.

As a result of his performance, Hayward was relieved of his responsibilities as leader of the response team in the Gulf. The chairman of BP said that Hayward had damaged the reputation of the company. He declared that this has now turned into a reputation matter, financial and political.

So if any organisation has doubts about the importance of corporate social responsibility (CSR), or indeed the power of PR, they need look no further than the fine mess that BP is in. Five letters never to ignore – CSR and PR. Shy away from them at your peril.

Roddy Graham, Commercial Director

What is it about the Brazilian Grand Prix? Over the past few years, we have enjoyed some sensational championship showdown races. Raikkonen versus Hamilton, Massa versus Hamilton, Barrichello and Vettel versus Button. Great racing, nail-biting outcomes, ecstatic winners and, more importantly still, dignified losers.

Who can forget Filipe Massa’s conduct on losing the F1 World Championship for Drivers on the very last corner of the last lap of the last Grand Prix of the season? Never had there been such a close finish to a World Championship season. Massa had done everything he could to wrest the laurels by dominating the race and yet the way he conducted himself when he heard Hamilton had finished fifth not sixth was something that will be remembered for a long-time, especially in the era of modern sport, where sporting values appeared to have long been thrown out of the window.

This Sunday we saw Rubens Barrichello warmly congratulate his teammate and later lend him his private jet to return to the UK. The way the two Brawn teammates battled it out all season long without falling out was equally good to witness. They say they loved each other outside the car but hated each other inside the car. True competitors but ones who valued true friendship.

My most abiding memory of this last weekend, aside from the sensational overtaking and aggression displayed by Jenson Button in becoming the tenth British World Champion, was when Ross Brawn was interviewed immediately after the race.

Displaying more emotion than we have come to expect of the man, he collected himself and immediately recalled all the hard work that had been done over the winter and paid tribute to those unfortunate staff he had to make redundant immediately after the opening race in Australia. He acknowledged their immense contribution and hoped that they could share in the team’s success. Now that’s what I call pure class.

I wrote a blog on April 30 about the lessons to be learned from F1 in good business management. In essence, I drew three conclusions.

Lesson one: you can get by on the minimum essential resources but you must nevertheless invest for the future.

Lesson two: you need top people with a good mix of experience to steer the organisation to success.

Lesson three: you need talent in a team and you need to engender team spirit so that everyone pulls in the same direction.

It seems those three lessons have been very successfully applied at Brawn Grand Prix. With one race to go the team has become the first in F1 history to win the World Championship for Constructors at its first attempt, Jenson Button has become the 2009 World Champion and his team-mate, Rubens Barrichello, currently third could still secure the runners-up spot. For a team, born out of the ashes of the Honda F1 team, that did not know if it had a future and for drivers who looked as if they were unemployed for the season that is quite some achievement. Hats off to everyone at Brawn Grand Prix, including the 270 staff from the original 700-strong workforce, who lost their jobs.

Roddy Graham, Commercial Director

The late Paul Newman came out with some wonderful quotes during his lifetime. One seems quite apposite in these current turbulent times… “From the beginning, our management philosophy was, ‘If we ever have a plan, we’re through’.”

It seems almost a waste of time to read newspaper reports on the current crisis as articles are overtaken by events. If you actually watched the FTSE100, performance on an hourly basis you would swiftly be driven to depressive paranoia so what chance has a five-year business plan got?

I have never ever believed in planning more than one year ahead as events are sure to make a major dent in original assumptions. Today, we can hardly plan three months ahead but plan we nevertheless have to do. But what we have to be mindful of is that nothing is carved in stone. We have to be flexible in an ever faster changing world. Mental as well as physical yoga is the order of the day.

It would appear that Prime Minister Gordon Brown is taking the latest turmoil in the financial markets seriously by appointing a ‘Cobra’ style response team to quickly react to any significant change in events, much as the Government already has in place to deal with acts of terrorism.

Hot foot off the presses comes news of another cabinet reshuffle.

Geoff Hoon, former chief whip, is made transport secretary to replace Ruth Kelly who resigned the day after the Prime Minister’s address to the Labour Conference for “family” reasons. Strange that she claimed that she did not mean to steal his thunder!

Geoff Hoon had the look of a rabbit caught in the headlights during the second Iraq conflict when he was secretary of state for defence between 1999 and 2005. Seen as probably more of a heavyweight transport secretary than those of late, with the probable exception both figuratively and literally of John ‘Two Jags’ Prescott let’s hope he can bring some much needed cohesion to his challenging task for an integrated transport policy.

Meanwhile, Peter Mandelson returns to the Cabinet as business secretary to strengthen the team tasked with the watching brief on the global financial turmoil. With his EU trade commissioner experience, let’s hope it’s third time lucky and there are no more skeletons in the cupboard.

While it’s difficult to plan too far ahead these days, if at all, it seems our PM is determined to give it his best shot and bring his Treasury experience to the fore. Former transport secretary Alistair Darling still has a lot to learn as Chancellor. If not myself, as I’m not a Gordon Brown fan, the markets should appear happier with steadier hands at the helm in these stormy waters.