Gulf of Mexico Crude Oil Debacle: A Business Execution Failure

Are you as angry as I am about what is happening in Gulf of Mexico as a result of a major business execution failure?

This morning, I read that the Gulf of Mexico is being contaminated by 210,000 gallons of crude oil spewing forth each and every day creating an environmental and economic disaster that will be felt for years to come.

Everyone is pointing the finger at some other entity to try to deflect liability and blame for this disaster. Here’s what I believe:

1. Anyone involved in off-shore drilling should be exercising the highest level of care and using the best protocols to ensure something like this can’t happen. News reports suggest that this isn’t happening here in the U.S. Now, we see what can happen.

2. BP has said that what happened wasn’t foreseeable. I beg to differ (a much kinder way of expressing what I really wanted to say). While the industry has a very good record, those involved in managing programs have to look at potential risks and risk mitigations. BP has clearly been caught flat-footed as it tries to invent approaches to stop the spillage.

3. The U.S. government (who is charged with oversight) was asleep at the wheel, perhaps due to lobbying efforts and too close a relationship with the parties involved. We see this over and over.

4. There is a $10 billion liability cap established by Congress. That won’t begin to cover the cost of the clean-up nor will it cover the economic losses that will be suffered by the hotel and restaurant industries or those involved in fishing the waters. Did BP knowingly look at this risk as merely “a cost of doing business?” Why should the taxpayers pick up the difference?

5. Our legal system will ensure that this process is drawn out for as many years as possible creating hardship and suffering for thousands and thousands of people negatively impacted by this.

6. Wildlife will suffer horrible deaths due to this contamination.

7. Hurricane season is approaching and has the potential to spread crude oil contamination over the major portions of the U.S., not just along our shores.

This “accident” didn’t have to happen. It happened because of short-cuts taken. No regulatory agency signed off on the short-cuts—they were implemented on the spot with no oversight.

We expect our government regulators and those who operate under their purview to apply the highest standard of care. We aren’t getting what we need or deserve.

I want to know:

  • What is going to happen now to look at best practices across the globe for drilling operations to ensure they meet or exceed the best standards and protocols known today?

  • What aggressive priorities will be set to put technologies and approaches in place that mitigate potential environmental and economic risk based on a risk profile for different types of off-shore drilling?

  • What penalties will be put in place for non-compliance? Financial penalties? Shut-down operations until fixes are installed and fully operational?

  • When is Congress going to fix the $10 billion liability cap? May 14, 2010, would be fine with me.

What do you think? What ideas do you have?

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Dave Gardner is a management consultant, speaker and blogger who resides in Silicon Valley. His firm helps clients eliminate business execution issues that threaten profitable and sustainable growth. He can be reached through his website at www.gardnerandassoc.com

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2 Comments

  • Adrian Ott

    Dave, A thought-provoking article. I find it amazing that the U.S. taxpayers are (yet again) left holding the financial bag for this failure in business execution.