Thursday, August 5, 2010

Lesson from BP and Transocean

BP and Transocean Drilling Company continue to be among the all-time greatest examples of what the Institute for Crisis Management has been teaching and preaching for nearly 25 years.

Most crises are predictable and preventable.

In the just published New York Times article “Gulf Oil Rig’s Owner Had Safety Issue at 3 Other Wells” Transocean’s own review of safety issues and practices revealed there had been an earlier problem with the Deepwater Horizon’s ballast system in
2008, and more than 70 workers were evacuated when the ballast system flooded and the rig began to list to its side.

There were apparently other warnings and signs of potential disaster, including reports that concluded there were “. . . critical equipment items that may lead to loss of life, serious injury or environmental damage as a result of inadequate use and/or failure of equipment.”

All of those things happened as a result of an explosion on the Deepwater Horizon April 20.

At least two-thirds of all business and organizational crises are what we call “smoldering” crises. They start out small and are almost always the kinds of problems that someone should spot and fix or report to someone who can fix it.

In the case of BP and Transocean, there is growing evidence that company employees “spotted” problems and told someone who could take action. But, so far, there is no evidence the reported deficiencies were fixed.

The cost to both companies is mounting into the billions of dollars, and the lawsuits and criminal and civil cases are still months from getting to a courtroom and the cost of defending those will certainly be astronomical.

Please, please, learn from other’s mistakes. Pay attention to the little things in your organization. If someone alerts you to a possible problem, deal with it immediately. You can save your company or organization hundreds, thousands, millions or possibly billions of dollars and its reputation.

If you’re big, like BP or Exxon, maybe you can afford that kind of loss. If you’re a small company or organization you may not be able to survive even a loss of hundreds or thousands of dollars. You don’t have to if you are constantly looking for the little problems and dealing with them as they pop up.

No comments:

Post a Comment