Wednesday, May 26, 2010

Accidents, Leadership and Oil Slicks

The oil slick in the Gulf of Mexico continues to grow and move and the finger-pointing frenzy continues to build. So, what does the oil slick, and the disaster that cost 11 men their lives on the oil rig, have to do with leadership?

We still don’t know what happened on and under the rig. Certain items of information have surfaced: there was a methane bubble that was not controlled, the Blow Out Preventers (BOP) failed to work properly, certain other safety response plans failed, etc. However, we still don’t know what were the root causes of these and other elements of the incident. Several options come to mind: parts failing to operate at less then ‘spec’ (that is, a part that is rated at being able to handle X pounds per square inch (PSI) fails at less then X, or a circuit which is supposed to respond reliably within certain usage parameters nevertheless fails, etc.); there might have been procedural errors by the people on the rig; there might have been shortcuts taken by certain people on the rig in routine maintenance; there might even have been a criminal act, though for the purposes of this article I will assume there was no criminal act, no attempt to deliberately cripple the oil rig.

Apart from the last possibility – a criminal act – it is fair to say that someone did something wrong: made a device improperly, installed a device improperly, maintained a device improperly, monitored a device improperly, responded to the failure of the device improperly. More accurately, and making it more complex, it is likely that the incident is not the result of the failure of a single device or a single person, but of several devices and monitoring procedures, meaning that the sequence of events is going to be a complex inter-relationship of devices, installations, maintenance plans, monitoring plans, training plans, and response plans.

As the world of aviation has taught us, there is no such thing as an ‘accident.’ Deriving its language and methodology from military aviation crash investigations, such organizations as the National Traffic Safety Board (NTSB) do not use the word accident, they use the word ‘mishap.’ Mishaps don’t just happen, mishaps are the result of mistakes, omissions, and poor decisions. And, and this is the important point, mishaps can be prevented.

Mishaps are prevented when there is a confluence of several things:

- Training – people properly trained in the maintenance and operation of the systems involved, as well as in safety procedures in the event of a mishap. Training must be comprehensive and continual.
- Maintenance – equipment regularly inspected, maintained, repaired and replaced at rates well within the failure margins for each piece of gear and for the entire system. Preventative Maintenance, and corrosion control, must become the cornerstone of long-term, sustained operations.
- Parts Support – Parts support is the obverse of maintenance, making the requisite investment to insure that the right parts are used, and replaced, and refusing to cut corners to save pennies in the near term, when doing so may well cost a fortune in the long term.
- Leadership – Leadership provides the ‘thread’ that ties together training, maintenance and parts support. Sound leadership, with a focus on long-term success, will integrate these three components into the daily fabric of the organization, recognizing that the cost of preventing a mishap is never as large as the mishap.

The fact is that mishap free operations – in any industry – are not the result of ‘good luck’ any more than mishaps are the result of ‘bad luck.’ Leadership that is focused on sustained performance and long-term success will recognize that investing in their people and their equipment is essential to that success. Leadership that focuses on short-term success will often try to ‘squeeze’ both the people and the assets, skimping on such “costly” items as parts, maintenance and training. Eventually, the skimping catches up and they will end up paying more for results of the skimping then they would ever have spent on the maintenance.

Consequence Management, not Risk Management

Central to successful thinking in any type of long-term, mishap free operation is recognizing the difference between Risk Management and Consequence Management. Intellectually, Risk Management focuses on input, on minimizing the probability of given events (parts failure, systems failure, etc.), thereby ostensibly providing safe operations. On the other hand, Consequence Management focuses on the fall-out of such an event and then plans backwards to minimize both the likelihood of such an event occurring as well as constructing plans that will allow minimizing the consequences, the impact, if such an event takes place. Consequence management will also identify those activities that simply are too costly to deal with and should therefore be avoided, replaced with other activities that are more easily managed.

Consequence Management, therefore, if executed properly, allows for addressing a situation so as to maximize long-term benefits while ensuring a plan is in place that will reduce to a manageable level the effects of any mishap.

But Consequence Management, as with the maintenance, training and support programs that constitute the principle elements of any sound mishap prevention effort, requires one overriding element: good leadership. Consequence Management is simply another element of a comprehensive strategic plan, and the right leadership will provide sound Consequence Management because it will develop comprehensive strategic plans.

The oil slick in the Gulf of Mexico is not a failure of the technology of the offshore industry, nor is it a failure in the processes and training available to the workers in the offshore industry, nor is it an indictment of the people on that rig. In the end, the failure of the BOP and the resulting oil slick in the Gulf of Mexico was caused by a failure of leadership; truly fixing the problem will first require fixing that leadership. The lesson that any company can learn from that failure is that long-term growth requires leadership and planning, and every company, every organization needs to renew its commitment to developing that leadership and those plans today.


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