David Gritz talks about what the BP disaster can teach us about management.

1. CAI
COMPUTER A ID , I NC .
Project Failures
What the BP Disaster Can Teach Us About Management
David Gritz
September 2011

2. At a Glance
Disasters mark a spot in time upon which those directly
affected and the greater society can reflect. The BP oil spill is
an event of that magnitude. From the rising action and
terminus of the event, there are lessons to be learned about
management
The BP Deep Horizon Story
The oil spill in the Gulf created more than $40 billion in direct
damages. It was a culmination of a lack of leadership and
repeated failures that can be linked back to organizational
culture.
People Cause Failure, Plain and Simple
It is only logical to link culpability to the people in charge of a
situation. Project managers should participate in training and
mentorship as they gain experience. Project failure can be
averted by focusing on people first.
Leadership is Vital to Project Success
Beyond people, leadership is essential to ensure success.
Integrity, honest communication, focus on strength, and
effective planning are elements of the leadership solution. By
building a leadership culture, disaster can be mitigated or
eliminated.

3. Major disasters and cataclysmic events on Earth have a
profound effect on society.
People feel the influence of events occurring thousands of miles away;
and the world opens up with compassion. In these brief moments, time
slows down as the world marks and reflects on these events. Almost
everyone can remember where they were and what they were doing on
the day Kennedy was shot or on the morning of 9/11. These historic
pauses open a new existential recourse for society to heal its wounds.
However, opportunities to evaluate and learn from disaster should not be
limited to a finite period around the event. Instead leaders should
continually reflect on situations to learn where they stand and where they
are going. This whitepaper seeks to discover what the BP oil spill can
teach us about project management.
The BP Deep Horizon Story
Few environmental disasters reach the sheer impact of the BP Deep
Horizon oil spill. The catastrophe has amounted to a direct cost of over
$40 billion and an indirect cost that amounts to an economic crater in
thousands of livelihoods. Out of the ruins, there exists the opportunity to
study and learn the lessons of people and leadership.
Studying the postmortems of senior managers, rig operators, and
surrounding culture, it is clear that there was a lack of integrity. A Harvard
Business Review analysis found that “CEO Tony Hayward presided over
an organisational culture that sanctioned extreme risk-taking, ignored
expert advice, overlooked warnings about safety issues and hid facts.”
Further, a 17-month study released by Bureau of Ocean Energy
Management found that BP was the sole actor responsible for 21 of 35
contributing causes to the well blow-out. This series of fatal decisions
combined with collective human frailty led to the initial explosion, the PR
disaster, and numerous failed attempts at early containment and cleanup.
Stepping back from this disaster and back into the shoes of a program or
project manager, it is easy to say “this will not happen to me” or “we have
a better culture than that.” However, it is important to dissect the abstract
causes of failure, people, and leadership in order to understand how your
organization can avert project failure.
People Cause Failure, Plain and Simple
When it comes to organizational failure, it does not make sense to blame
computers or the environment. People run organizations, and therefore
people cause failure. The two major reasons people fail is that they are
inexperienced or inadequately trained. The risk of a spill could be greatly
reduced if rig operators, like project managers in your organization, were
required to go engage in thorough training.. Historic oil spills such as the
Exxon Valdez and Ixtoc I spills form a body of knowledge from which
operators can educate themselves.
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4. This same body of knowledge exists for project managers and is known
as the Project Management Body of Knowledge (PMBOK). Yet, just
because the captains on the Athos I, which spilled on the Delaware River
in 2004 , may have learned about the three previous spills in the 30 years
prior, it is not enough. Experience is essential to project managers’
success. Experienced managers should act as mentors to younger
managers to educate them on the specifics of the organization and
contextual knowledge, such as dealing with organizational politics.
Leadership is Vital to Project Success
Likewise, leadership is an essential element to success. The BP spill was
a breakdown of leadership on a number of levels. The dealings in the
disaster highlight four core areas to stress: personal integrity, honest
communication, leading from strength, and effective planning.
Looking at the fallout of the disaster, it is easy to recognize Tony
Hayward’s void of integrity. Decomposing an early PR blunder, Hayward’s
statement “There’s no one who wants this thing over more than I do, I’d
like my life back,” shows the need for your organization to be willing to
stand by its decisions. As Peter Drucker says, “For the organization to
perform to a high standard, its members must believe that what is it doing
is, in the last analysis, the one contribution to community and society on
which all others depend.” It is therefore necessary to ask, ‘Are we
maintaining integrity in our project?’ Building on integrity is the need for
honest communication. It is not a good indicator of future success if you
are communicating(e.g. “There aren’t any plumes”) to the press and the
opposite to your engineers and lawyers. Team members should be aware
of their personal performance and direction of the project. Being aware of
your strengths and weaknesses is the first step toward improvement.
The biggest strength that BP failed to capitalize on was the willingness of
American citizens to alleviate the situation. Fishermen, boaters, and
ecologists were more than willing to help with the clean-up, yet BP did not
capitalize on that willingness. By focusing on your strengths, you can
achieve much more. The strengths of the project team are the talents that
can be most leveraged to successfully lead and complete a project.
Former president Eisenhower said, “You do not lead by hitting people
over the head – that’s assault, not leadership.”
Standing on strength starts with effective planning. The plan must include
understanding of requirements, the lifecycle, the methods, the schedule,
the risks, and other relevant elements. It is not enough to have a “shut-off
valve” that has never been tested. Further there should be a quick way to
adjust for plan deviations to get back on another critical path. The reason
BP had so many failed attempts to seal the well is because they did not
have enough free capacity to quickly address the problem.
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5. And, they did not know where there next critical path was. For Hayward,
there was no critical path to remain CEO.
Prevent your Next Disaster
Taking these lessons to heart, it is important to draw actionable lessons
from the BP Disaster. Considering the effects of incremental lack of
leadership and trained people, it is important the combat those problems.
Many organizations have established project management and leadership
training programs to accelerate their employees’ growth. However, other
software alternatives exist that have the capability to recognize missing
elements in project leadership or experience. These software tools allow
organizations to make mid-course corrections and add additional
experienced resources if a problem is predicted. Using predictive
analytics and software, companies can maximize their existing
capabilities in the short-term and develop a track from long-term success.
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6. About the Author
David Gritz is a research specialist in the Allentown, PA, office of For Further
Computer Aid, Inc. You may contact him at david_gritz@compaid.com. Contact
If you would like
Article Resources to discuss this
Winters, Frank. "The Top 10 Reasons Projects Fail." Gantthead.com, report, please
2004. contact Peter
Lechner at
Corkindale, Gill. "Five Leadership Lessons from the BP Oil Spill." Harvard peter_lechner@c
Business Review, 28 June 2010. ompaid.com.
Matta, Nadim F. "Why Good Projects Fail Anyways." Harvard Business
Review. Sept. 2003.
“History's Worst Oil Spills,” The History Channel website, 2011.
Staff. "Tony Hayward Quotes: BP CEO Gaffes Or Remarks That Wents
Wrong." NowPublic.com | The News Is NowPublic. A&E Television
Network, June 2010.
USA. Bureau of Ocean Energy Management. Regulations and
Enforcement. Macondo Well Blowout. By Michael Bromwich. Sept. 2011.