You would think that a smart executive would know how to call a spade a spade and establish the right message in order to protect their brand from potential disintegration.Â Take for example the four ring circus between BP Oil, Transocean, Halliburton, and now the US Minerals Management Service. While the folks in Washington are essentially looking for the quick fix in terms of one person to blame, what has come out of the conversations to date is that the problem, as is fairly typical, is both complex and apparently systemic.
What the BP Executive Lamar McKay should have done was establish the framework which would lead towards greater accountability in the field (no pun intended) for the future. That being that each of these organizations, and more, each potentially has some measure of responsibility in what was probably a preventable accident.
The problem is one where there is no direct line of accountability within complex systems. Very large projects require that a large number of autonomous activities each perform at peak efficiency. Essentially the assumption is that failures in one system will not cascade across other systems for which there is no proper oversight and management. Add to this the Bush Administrations to push for energy independence at a rate which likely has exceeded the ability of government oversight groups to effectively monitor and control, and companies which are trying to both recoup from financial losses due to the financial marketâ€™s meltdown and increase profitability on their balance sheets.
A single point of failure in a project which is suppose to have multiple levels of oversight essentially means a cascade failure among all the parties involved that share responsibility to various degrees. Halliburton for example cannot renege on their responsibilities for capping the well if they are supposed to be experts in this field. If the removal of the mud prior to insertion of a cement plug is not something they do on a regular basis then someone from Halliburton should have been aware of the safety concerns and halted the procedure when a non-standard technique was about to be employed.
Iâ€™m not suggesting that this was or was not the direct cause of the explosion and sinking of the oil rig. Rather what I am suggesting is that this type of behaviour where unsafe practices are not identified and corrected because â€œthat is not my jobâ€ or â€œthat is someone elseâ€™s responsibilityâ€ is representative of the type of systemic issues that plague large projects.
Problems like this are often far too easy to recognize but are stopped mid-stream in the escalation process because eventually the communication of these issues hit the â€˜pay-grade ceilingâ€ â€“ that is, the attitude that nothing can be done because the decision to take corrective action is â€œabove my pay-gradeâ€. Similarly, when there is a lack of communication across multiple organizations each having responsibility for a specific aspect of a project, communication can also be stopped because â€œthat is not our area of responsibilityâ€. There is an expectation that an individualâ€™s span-of-control goes only so far and when safety or other concerns branch beyond that perceived span-of-control then they are forced through peer pressure to not make waves and let people do their jobs.
Unfortunately, for a number of projects that type of attitude isnâ€™t good enough. In part because no one wants to be the outcast for saying that the â€œsky is fallingâ€. In part because those people whose job it is will in general take exception to other people poking their noses into their job.Â We can look to a number of instances such as the multiple NASA space flight failures, Chernobyl, Seveso, and Bhopal. Time and time again what we find is that even though it may be the actions of a few which have cause the actual catastrophe, it is the social culture which surrounds those individuals which leads to the pattern of behaviours that make such catastrophes inevitable.
So what should the Chairman and President of BP America said to the congressional hearing?
Every day around the world BP is engaged in hundreds of thousands of decisions related to the quality and safety of their global operations. Influencing those decisions are hundreds of thousands of other voices including local, federal, and regional government agencies, global business partners, environmental groups, and non-governmental organizations. And underlying all of those voices are thousands of risks and circumstances which cannot be anticipated, predicted, or mitigated.
The exploration for oil is one of the riskiest ventures that humans can for reach and accomplish. Companies like BP are expected to take every conceivable precaution but the bottom line is that no industry can uniquely provide a 100% iron clad guarantee that ever possible situation will be controlled to the point where failure is impossible. It just doesnâ€™t happen as much as we would like it to.
So long as our culture has a thirst for petroleum, humans will continue to do stupid things like stick a hair thin straw into that 8000 mile wide orange we call the Earth and hope to heck nothing goes wrong.
What needs to happen is the culture from Government to BP and its partners need to be looked at to identify why the culture allowed safe practices to be compromised. Then engage in changes to the system which both support the culture through education, technology, and policy. And then it needs to be made into best practice around the globe with all organizations engaged in similar activities.
You canâ€™t do that however in an environment in which is focused on assigning blame to the few organizations that are in the best position to be leaders of that change. Are they at fault â€“ sure â€“ but now that weâ€™ve just invested $30 Billion dollars or more in their education why would we deliberately put them out of business and in so doing create a culture in which the rest of the players in this industry drive their bad practices further underground.
We need these practices out in the open in order to fix them and we need solid leadership to drive that point home to all the other competitors in the field that the status quo isnâ€™t good enough anymore. Itâ€™s not going to be a quick fix. But if handled correctly by all parties it could prove the stimulus for substantive change in the industry towards better accountability and safety while the need for petroleum is still a major factor in the economies of the world.