Leadership at BP During the Oil Spill Crisis

BP Oil Spill Disaster

Introduction

As Garcia (2011) notes, the seeds of the Deepwater Horizon catastrophe were planted well before the BP oil spill disaster actually occurred. They were planted by leadership that failed to be engaged, failed to conduct appropriate oversight, and failed to create a culture of accountability. There was no risk management. There was no situational awareness. There was no clarity regarding roles and processes. There was no quick action once the disaster erupted and mistakes were compounded. This paper will provide the background information on what management did before, during and after the spill, and how the role of leadership and teams, leadership practices and leadership principles can help to improve outcomes for organizations.

Background

Management before the Spill

Prior to the disaster, management had engaged in cost-cutting exercises without conducting adequate risk management of the Deepwater Horizon site. The build-out of the well used cheap cement, which systemically weakened the operation (Bureau of Ocean Energy Management, Regulation and Enforcement, 2011). The focus was on doing things as low-cost as possible instead of on doing things efficiently. Management was in a rush and promoted a culture of irresponsibility that was later seen in the attitudes and culture of BP’s clean-up crew: the marine operations team of BP, when asked by the US Geological Survey director Marcia McNutt for a design review, answered:  “You want a design review? Can\\\\\\\'t we just put this together with tie wraps and duct tape and say done? We want to get it done [and] get back to the dock and have Miller time” (Chandler, 2011). There was nonchalance in the management culture that perfectly explained why the Deepwater Horizon explosion occurred.

Management during the Disaster

During the disaster, BP led poorly. CEO Tony Hayward acted the part of the victim in a tragedy that killed 11 (and an additional 2 during the clean-up phase) and injured more (Loftus, 2016). BP lied about the size and scope of the disaster, hoping no one would notice. Chairman Svansberg referred to the people of the Gulf Coast, whose lives and businesses were severely upset by the largest oil spill in industry history as “small people” who clearly were not worth the trouble of acting as though the disaster were as significant as it was (Loftus, 2016). There was an overall attitude of insincerity in Hayward’s apologies to the public and an overall lack of authentic leadership at a time when BP should have stepped forward and assumed accountability. Instead, it acted slowly and allowed errors to compound and a bad situation to become even worse. As Corkindale (2010) notes, BP tried to “spin its way” out of the crisis instead of addressing it directly and with candor. As a result, the company took a lot of flak in the public relations department, and its reputation suffered greatly.

Management after the Disaster

After the disaster, leaders tried to deflect blame away from themselves (Corkindale, 2010). Instead of acting as stewards of the organization, they sought out scapegoats for the disaster. Instead of acting as servants of the organization, the stakeholders and the communities affected by the disaster, they acted aloof and as though the regulations that had been in place to prevent such disasters were just now coming to their attention for the first time (Corkindale, 2010). They essentially denied all blame for the crisis and attempted to wash their hands of the guilt. While locals all along the Gulf Coast banded together to help clean up the spill, BP’s management distanced themselves as far as they possibly could from the whole ordeal.

The Role of Leadership and Teams

The leadership practices of the BP organization were deficient at best. They were not involved in any oversight and held elevated cost-cutting outcomes over safety and regulatory priorities. They failed in effective risk management, failed to hold themselves accountable to the public, and failed to create a culture of responsibility.

The practices that leaders use to create collaborative and successful teams include honest and effective communication, role clarification, role expectation, risk management, critical thinking, and servant leadership. Collaboration is about working together to achieve a common goal—but the goal of BP at the outset with Deepwater Horizon was to do things cheaply and get the operation up and running. Leaders showed scorn for regulation, deemed as petty and intrusive. They showed their own ignorance and inability to engage in critical thinking and critical decision-making by dismissing regulatory protocol. They showed no situational awareness, which meant they were not active in collecting information on the operation, nor were they hands-on with monitoring it before or after.

Teams cannot be maintained if there is no interaction, and goals cannot be reached if oversight and communication are not implemented. A team that does no reporting to a higher-up and a team leader that does not pay attention to what his team members are doing are inviting disaster. The risk of failure is too great in any given situation for team members or leaders to take anything for granted. Risk has to be managed and that means identifying possible and potential dangers, addressing them wherever possible based on a prioritized ranking, and monitoring the situation for changes constantly.

Leaders should at the bare minimum demonstrate the spirit of servant leadership, which means serving the vision and mission of the organization. The vision and mission of BP was to successfully drill well, pump oil and bring the product to market. To serve that vision and mission, certain steps should have been taken that were not taken; and when the vision and mission were compromised by the oil spill, leaders should have taken responsibility the way Eisenhower did when one of his operations failed to come off as planned during WW2 (Loftus, 2016). By accepting responsibility, one can learn from a mistake. It is far more dangerous and damaging to try to turn a blind eye to a crisis or to try to scapegoat others because it indicates that even still one’s leaders are not serving the mission or vision of the organization but rather only their own self-interest—or so they believe.

Leadership Practices of BP

BP’s leaders failed to effect successful working relations resulting in negative conditions in the lead-up to, during and after the crisis. One of the big reasons for this failure was culture: they did not cultivate an organizational culture of accountability and responsibility. From the top down it was a culture of ambivalence, status quo type thinking, aloofness, and self-assurance. Everyone was sure that nothing could go wrong because the company was BP. This type of vanity and misplaced pride was severely checked when oil spill threatened to drive BP right out of business.

Leadership has to do more than simply act presumptuous, arrogant, and aloof. Leaders have to realize what they are stewarding. They have to know the grave responsibility that is theirs. They have to know what it means to weigh the pros and cons of a decision, what it means to prioritize, what it means to see value in an activity that costs more upfront but may save a lot more in the long run. Short-sightedness is not a virtue among leaders. Service to the vision and mission is. That is what was lacking among BP’s leaders throughout the entire episode.

Remedial Principles and Practices that an Organization Can Adopt for Better Outcomes

The remedial principles and practices that an organization can adopt for better outcomes are, first and foremost, to identify the vision and mission of the organization and to keep this front and center of the collective consciousness at all times. If people in the organization are not conscious of what they are doing and why they are doing it, the work they engage in will reflect the lack of attention, the lack of engagement, and the lack of personal accountability. Leaders set the tone at the top. They are the ones who establish the culture through their own energy, engagement and activity. If they are aloof, they run the risk of establishing a culture of aloofness on down to the very lowest role player in the organization.

The second most important principle and practice is communication. The vision and mission may be known, but it is also important that everyone monitor their work and demonstrate situational awareness so that they can determine whether their actions are in line with the objectives and goals of the organization. Assuming that what one’s team is doing is going to work is akin to committing groupthink, which is disastrous. Leaders have to be mindful of the possible risks that may crop up and if they are not constantly assessing both the horizon and the day to day affairs of the operation, they share a disconnect between vision/mission awareness and practical application of the performance methods. Such disconnect should not exist. Total integration is the key to success.