Mercy! Mercy! That Dang Nabed PERCY!

The Three Stooges

Preparing for the storm as opposed to doing nothing.

Continuing on with the BP example we know what the problem now is.

Problem: BP needs to determine the best way to cap, mitigate and compensate.

The executive they had in charge to begin with was completely overwhelmed…instead of anticipating he would soon be sitting before a congressional committee explaining things he frittered away his preparation time taking a tour on the ground. What he saw were some pelicans covered with oil and people standing around as clueless as what to do as he was. Then he made some comments about how bad he felt about the whole thing and that he would be glad when it was over and he could get his life back.

His time would have been better spent bringing in three experts who could help him explain the facts. Had he identified the problem properly early on, who these experts needed to be would have been fairly obvious. He would need an engineer (Capping/drilling a relief well), A cleanup guy (skimming, barriers etc.) and a comptroller…(Begin working the compensation issue.) Each night the four would have huddled in the hotel and brought the poor CEO up to speed, on what was being learned and the possibilities.

Next they would have gone to work on the facts…What caused the accident etc. Immediately accepting full responsibility and acknowledging it was an equipment or human error seemed premature. How about the possibility of a small team of environmental crazies slipping onto the rig, proceeded to the control room, planted explosives and departed. I know it sounds James Bond however keep in mind it is very rare for this type of accident to happen on its own…it wasn’t like the Exxon Valdez where the Captain was drunk…and everyone was still alive to explain what happened. Second, was there telemetry that routinely gets sent from a rig to an offshore site that monitors the readings of key instrumentation? If yes what was that instrumentation showing…next what did the survivors witness…Did they all perish in the explosion?…did any get out who saw what was going on….?What about that engineer who reported that the Company was “Leaning on the Well,” to maximize profits….what happened to him…?There are many facts surrounding this case that have not been developed and assumptions that have been set aside too quickly.

Without becoming paranoid…it would have been in the CEOs interest to have developed these facts and assumptions and developed some plausible scenarios for what happened. Perhaps the Lawyers got involved and told the CEO to shut up and take the fall…it appears this is what happened because in the history of Congressional Testimony this testimony had to be the most pitiful effort ever recorded. Either the CEO was incredibly stupid or BP was trying to cover up for the litigation that they knew would follow. This is a horrible strategy…first it appears they let the accounts make engineering decisions and now they are letting the lawyers take charge of the damage control.

I mentioned earlier the paper company fiasco in Rhinelander where efficiency experts convinced high management to run the machines faster to increase production and the result was a mountain of paper that would not work in a copy machine…Did the same thing to BP when an accountant recommended turning the spigot wider on the Deep Water Well? In the military this sort of convoluted decision making resulted in Mullah Omar escaping from a drone while they woke up the Lawyer at CENTCOM to make the decision to shoot…. In retrospect the stupidity is obvious and you can bet that if this happened, priority one was to avoid getting the big red rose pinned on some decision maker's chest…. What is happening is that if reason is being used at all ,the process is abbreviated... but more likely people in positions of influence are shooting from the hip…or nature is being allowed to make the decisions for everyone.

If reason had been used in defining the problem for BP that poor executive would have had his three experts sitting behind him…Several of the financial institutions that have had CEO’s testifying in the meltdown had leaders with a little neural activity, who took the time to at least define the problem and went into the hearing with a back-up team that was up to speed on the components of the problem…I know they don’t teach this stuff at Harvard business school but maybe a course on crisis management would be worthwhile.

Tomorrow I will go over the facts and assumptions and discuss how a general plan might have been formulated that would have given BP some semblance of credibility instead of making the company look like it was run by The Three Stooges .