Crisis Management: 3 Lessons from the Gulf Oil Disaster
| by Steve Flick | ||||
The “Deepwater Horizon” disaster, unfolding in the Gulf of Mexico over the last three weeks, should serve as an object lesson in how NOT to manage a crisis. Here are just a few of the ways in which British Petroleum (BP) and its contractors made a bad situation infinitely worse:
1. You have to have a contingency plan. Whether through willful disregard or naked ignorance, it’s apparent that BP and its subcontractors, as well as the federal government, weren’t ready from the outset to handle the oil rig disaster. Compared with the final tally, which we won’t know until decades from now, the cost to prepare for a worst-case scenario would’ve been microscopic. Good risk management would’ve helped, too.
2. Someone has to take responsibility. It’s one thing to say something went wrong but you won’t know what for sure until all the results are in. It’s another thing altogether to immediately start pointing the finger of blame at everyone else, as oil executives did before the US Senate in recent weeks. Who made the final decision to undertake the project? Who made the decisions to “do this” and “don’t do that”? ISO 9001, as well as sound ethics and common sense, dictates that someone at the top must be responsible.
3. Quality is not an inconvenience. The Minerals Management Service (MMS) was not conducting monthly safety testing on the Deepwater Horizon in accordance with federal law. Furthermore, the MMS has reportedly granted drilling permits there and elsewhere without adequate environmental safety reviews.
The most important piece of safety equipment, the blowout preventer, was said to have been damaged weeks before the fateful explosion but not repaired or replaced. Countless other shortcuts were allegedly taken for the sake of time and money.
The sad part is that the parties involved – especially BP – could have easily afforded to take their time and do things right. (The oil business has been hugely profitable over the last five years, right? Well, what have they done with the record profits they earned?)
We all see the price to be paid for haste and carelessness. We can’t afford it.
* * * * * * *
Further Reading:
- Blowout: the Deepwater Horizon Disaster, CBS News, May 16, 2010 – http://www.cbsnews.com/stories/2010/05/16/60minutes/main6490197.shtml
- Rig Explosion: the Blame Game Begins at Senate Hearing, Associated Press, May 11, 2010 – http://www.chron.com/disp/story.mpl/business/deepwaterhorizon/6999804.html
Categories:
Policy • Process Management
Tags:
contingency • management responsibility • quality • quality management • risk management
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Originally published in 2010 by Bizmanualz, Inc. under the title Crisis Management: 3 Lessons from the Gulf Oil Disaster. All rights reserved. Reproduction permitted with attribution only. www.bizmanualz.com
2 Responses to “Crisis Management: 3 Lessons from the Gulf Oil Disaster”
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May 18th, 2010 at 5:46 pm
It appears that the long term goal was sacrificed for short term results. If businesses want to avoid being hamstrung by goverment regulation, they have to prove they are capable of doing the ‘right thing’, especially when no one is watching. And MMS needs to prove their value, as does all of government, through effective regulation, not intrusive regulation done solely for posturing but taking real ownership for a systemic failure.
May 20th, 2010 at 9:06 am
Rich, thanks for your comment. It seems to me that BP may be emblematic of many corporations in that they lack long-term goals, let alone meaningful ones. Nobody has patience any more.
Look at what’s going on in the stock markets around the world. Everybody’s in for the quick kill – make money now! Never mind five or ten years down the road…we can’t think that far ahead. Investors don’t want to wait.
Companies pander to that. You know the commercials where people scream at the heavens (a la the movie “Network”), “It’s MY money and I need it NOW!”, right? That’s the way the business world works today.
RIP, long term goals.