While BP’s management had signs of demonstrating quality leadership, it also lacked key aspects of leadership. When Tony Hayward became CEO, he demonstrated leadership by pledging to “focus like a laser on safety issues, put the breaks on growth, and slash production targets” (Locke 2011). It was a great way to verbally communicate deep care for them. Manning (2014) emphasized having a deep care for followers is demonstration of leadership. However, in order to increase profit, he ended up sacrificing some of his people. He improved corporate performance by reducing the workforce from 97,000 to 80,300. Doing so did not demonstrate the quality of a leader that would sacrifice his own gain for the sake of all his people (Sinek 2014). His successor Robert Horton continued the policy of cost-cutting, especially in staffing, and the subsequent CEO David Simon did the same. The general attitude of not valuing the company’s staff translated into the tragic incident. While, the company publicly prided itself on its commitment to safety, the management did not prioritize it (Locke 2011). For instance, after the initial explosion at BP’s Texas City Refinery in 2005, James Baker, a former U.S. secretary of state and oil industry lawyer, highlighted, while BP had emphasized personal safety, the company “has mistakenly interpreted improving personal injury rates as an indication of acceptable process safety, creating a false sense of confidence” (Locke 2011). A series of refinery-level interviews, the process safety culture survey, and some BP documents suggested that significant portions of the U.S. refinery workforce did not believe that process safety was a core value at BP (Locke 2011).
In 2009, the Deepwater Horizon incident showed that BP’s management lacked in demonstrating leadership because it appeared to, instead of actually, value its people’s safety above all else. In an effort to close up the Macondo well, the management made several key decisions, each involving multiple stakeholders and trade-offs of time, money, safety, and risk mitigation (Locke 2011). As a result, while the company had safety precautions set in place, amongst other priorities, they were not sufficient enough to actually fulfill the purpose of keeping the crew safe. For example, the management installed emergency alarms to detect high gas levels. However, they disabled them in order to prevent false alarms. Additionally, for example, although Mike Williams, the chief electronics technician for Transocean, already knew the standard procedure for jumping from a 33,000 ton oil rig, he was still injured during the explosion. It indicates a lacking in the management’s competency, a leadership characteristic, as the safety training program’s content was insufficient considering that it did not keep Williams and other workers safe.
I would recommend specific strategies to avoid such issues in the future. A major problem was a flawed design for the cement used to seal the bottom of the well (BBC News 2011). Firstly, I would recommend BP’s management reconsider the game they are actually in. It’s the leaders that organize their resources and decision making around the infinite contest that frustrate and outlast their competition (Sinek 2016). By doing so, the management is going to focus on how to make itself better (Sinek 2016). Therefore, my suggestion is to focus on proactively enhancing equipment quality in order to set the company up for long term success. It would involve investing now in the most cutting-edge equipment to ensure there is little room for risk going forward.
Further, a test of the seal identified problems but was incorrectly judged a success (BBC News 2011). There is nothing to suggest that BP’s engineering team conducted a formal, disciplined analysis of the combined impact of risk factors on the prospects for a successful cement job (BBC News 2011). Since BP’s management was so focused on saving time and money, the company did not have the inspectors and technical analysts in place to sufficiently oversee activities and decisions (BBC News 2011). Devoting human resources to verifying accuracy in safety protocol is worth it. That said, secondly, I would suggest BP hires extra staff members to be responsible for conducting proper risk analysis and overseeing equipment quality.
Thirdly, BP’s management did not adequately prepare in terms of how to handle material coming up from the well, and that resulted in unfortunate decisions that led to the explosion (BBC News 2011). A demonstration of leadership would have been to prepare a response to a wide array of potential problems similar to how a leader would prepare how to respond to potential distractors in a difficult conversation. My final recommendation is to keep a document on the premises that outlines how staff members should handle potential equipment malfunctions. With each poor response to a risk event that transpired, the probabilities of future risks occurring increased, showing the importance of continually revisiting and reassessing the project risks (Greene-Blose 2015). After each risk event, all future risk events should be re-evaluated for probability and impact, and an appropriate response should be taken (Greene-Blose 2015).
BBC News 2011. “US oil spill: Bad Management Led to BP Disaster”. https://www.bbc.com/news/world-us-canada-12124830
Greene-Blose, J. M. 2015. “Deepwater horizon: lessons in probabilities”. Project Management Institute. https://www.pmi.org/learning/library/comparison-risk-events-with-risk-management-9919
Locke, Richard M. 2011. “BP and the Deepwater Horizon Disaster of 2010.” MIT Management Sloan School. Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 Unported
License. 2011. https://mitsloan.mit.edu/LearningEdge/Leadership/BP-Deepwater-Horizon-Disaster/Pages/BP-and-the-Deepwater-Horizon-Disaster-of-2010.aspx
Manning, George. 2014. The Art of Leadership. New York: McGraw-Hill
Sinek, Simon. 2014. “Why Good Leaders Make You Feel Safe.” TED. YouTube. May 19th, 2014. Video, 11:59. https://www.youtube.com/watch?v=lmyZMtPVodo
Sinek, Simon. 2016. “Most Leaders Don’t Even Know the Game They’re In.” Live2Lead 2016. YouTube. Nov. 2, 2016. Video, 35:08. https://www.youtube.com/watch?v=RyTQ5-SQYTo
Comment by Alex Johnsen:
Excellent post! One particular area I wanted to focus on a bit more was how you pointed out that the cement used to seal the bottom of the well had a design flaw. I really like how you tied this into Sinek’s discussion about game theory. While this was just one factor that contributed to the disaster, if BP had been a bit more scrupulous with the equipment and materials they were using, perhaps the impact of the disaster could have been lessened or avoided altogether. It is well documented that BP was more concerned about the bottom line rather than outperforming their competition by providing a product and work environment that was industry-leading. Great job!