The Gulf Disaster, BP, and the Aftermath

Joseph Lee

I got an e-mail from the White House the other day (click here to read). I must have been on one of their mailing lists. It had listed all the key words we expect in the aftermath of a man-made catastrophe—”accountability” and “disaster.”

I’ve read press reports of the incident, and I’m not sure I really “get” it. A government commission will soon be formed to find out what went wrong.  Perhaps there were flaws in the equipment. Maybe it was a crummy piece of construction.  Or then again, maybe it was the concrete—that’s it, it was the concrete’s fault! (No pun intended.)  And I’m sure a bunch of consultants will tell us that this was caused by “human error,” a combination of failure in imagination, due diligence, oversight, and execution.

I still don’t get it. I’m sure we’ll find oil rigs with poorer safety records where all hell didn’t break loose. There are sure to be those where everything was done right, and the unexpected happened. Our whole approach to risk management seems to be to throw more money and dirt at the problem and hope that we’ll never see it again.

As long as planes fly in defiance of gravity, they will come down. As long as cars travel faster than the human body can on its own, traffic accidents will kill us. And as long as we drill oil, there will be accidents.

Perhaps there are lessons in crisis management, media strategy, public relations, engineering, and political correctness.  BP’s CEO was in a no-win situation. He would be like Rudy Giuliani if one plane a day hit NYC after 9-11 for a month, with no one able to stop them. His hands were tied, since this was worse than any worst-case scenarios he had planned for. BP’s stock has taken a terrible beating in the stock market in spite of assurances that the company’s vast resources are more than adequate to cover the Gulf losses. How often does an oil giant brag about how much money it has?

What was the lesson here?

And herein lies the problem: I’m struggling to find one. I don’t know what Exxon learned from the Exxon-Valdez except to avoid shallow waters. I don’t know if airlines learned anything from 9-11 except to remove passengers’ shoes and to treat customers more suspiciously and to make people’s lives more inconvenient when flying. I’m not sure if BP CEO Hayward could have done anything differently that would have made any difference in the public perception.  In other words, he was doomed.

The New York Times reported on June 10 that both government and BP have tried to restrict media access to the events (read article here).   I’m reminded of a quote from Jeff Immelt of GE when he first took over for Jack Welch and was hit with a major accounting problem. He told a group of partners from our firm, “We must communicate internally as we do externally.” He said that GE employees should be held to the same standard that Warren Buffet loves to preach—that whatever you’re doing, you’ll be proud if it gets printed on The Wall Street Journal the next day (actually, Warren Buffet said “neighborhood paper to be read by your friends and family”).

Still shot from webcame of BP oil spill
From the BP live webcam

Interestingly, the Internet with its web-cams, live coverage, and 24-hour news cycle forces corporations into behaving like bad politicians.  We learn to manage the news, rather than fixing the problem. We focus on talking points and perception, rather than finding out the core issues. We gather more information to use as excuses, rather than rely on the small pieces of important relevant information that tell us we simply screwed up.

Corporate Social Responsibility (CSR) is treated like a nice slogan, rather than a central value. Perhaps for a company that makes widgets, that’s true, but not for an oil company whose responsibility to society depends on a fragile balance between tapping into the earth and ruining the environment.  There should be and must be a higher level of accountability. That’s why society lets them make so much money—so they can pay for these events.

Maybe that was the lesson of BP.

Joseph Lee is an adjunct professor at the Graziadio School of Business and Management and Peter Drucker & Masatoshi Ito Graduate School of Management, where he teaches a course on management consulting. Read his blog at joe-lee.com/blog.html

Author of the article
Joseph Lee, Adjunct Professor
Joseph Lee, Adjunct Professor
More from The GBR Blog
A Blog on Blogging!

A Blog on Blogging!

Best Blog Practices Timely: The more relevant your topic to current events, the more hits you will receive. Valuable: Entries should promote knowledge, add insight, and provide valuable links to your readers. Concise: Every blog entry doesn’t need to be a 600-word essay. You can post photos, videos, links, PDFs, or anything that you think … Continued