The 'Scale of Harmful Events'
A disaster is not a crisis, an issue is not an incident - these distinctions matter, because they call for different types of response. Failure to understand this was one of the main reasons the Deepwater Horizon oil spill was handled so badly by BP executives at the time. This is worth examining in detail.
Deepwater Horizon - a disaster for the Gulf, a crisis for BP
We can see an example of how a crisis differs from a disaster with the case of Deepwater Horizon, which involved both. As oil poured out into the Gulf of Mexico, BP’s CEO Tony Hayward came under extensive criticism for his poor media performance. This, however, was nothing to do with an inability to communicate on his part, the solution in other words, was not a course in media training. The problems ran far deeper.
The first issue was a failure to distinguish between communications appropriate for a disaster response, and those for a crisis. In his media appearances, Hayward was repeatedly questioned as to why the event had happened, how the company was caught so ill-prepared, and why its initial efforts at cleaning up the spill were so ineffective. This was the crisis component of the situation, as it reflected the widespread condemnation of BP in the eyes of its stakeholders, above all the population of the Gulf coast.
Hayward’s replies, however, emphasized the scale of BP’s response to the ongoing disaster, the resources mobilized, the funds set aside for compensation. These were valid enough points to make, from a disaster management perspective, but they failed completely to address the crisis that was in full swing. On the points of greatest concern to stakeholders, Hayward came across as evasive, by trying to highlight the disaster response, or as seeking to deflect the blame by emphasizing that the rig in question was owned by Transocean and the cement job that failed had been undertaken by Halliburton.
Underlying this lay the uncomfortable reality that in fact, Tony Hayward was himself ultimately to blame for the catastrophe. It was Hayward’s leadership that set the conditions for the chain of events that led to the blow out. There is simply no escaping this judgment, no matter how harsh it might seem. It is why his replacement as CEO was inevitable, and justified.
It was Hayward who initiated a revision of BP’s safety management system to ‘cut out the red tape’, in other words to remove key safety controls within the company’s decision making processes. He also reinforced a conception of risk that understood this purely in commercial terms, and not safety, a culture that rewarded short cuts if they got ‘results’, and a ‘short termism’ that postponed the timely maintenance and replacement of key equipment such as the Blow Out Preventer, to prevent their failure at critical moments.
In the light of this, it was never realistic to expect Hayward to manage the crisis effectively, this was not a communication failure, but a crisis management one whose nature we will explore in further articles. This state of affairs, however, is not an unusual one, it follows from the very nature of a crisis, this being by definition the product of a management failure.
If we track the Deepwater Horizon spill using the Scale of Harmful Events, we get a useful insight into the incident, how it happened, and what caused it to escalate into a full blown crisis for BP.
Here the key elements were decisions taken in relation to the Safety Management system, and the understanding of risk in purely commercial terms. These were in place months and even years before the blow out, which meant plenty of opportunity existed to remedy the situation before any real harm was done. Once the explosion happened, however, it escalated immediately into a disaster for the Gulf and a crisis for BP.
This article forms part of Avoiding Catastrophe's training program in crisis management. For further discussion of the issues raised here, or about our training, or for full sized versions of the material shown, contact us at email@example.com