Saturday, August 26, 2006

BP's Problems: Lemony Snicket tale for the Oil Patch?

My favorite business columnist, Loren Steffy of the Houston Chronicle, is trying to figure out why BP is having so many problems. So he asked Carl Veley at vPSI Group, a management consulting firm that specializes in accident prevention:
Accidents recur, Veley says, because companies tend to focus on what's already happened rather than preventing future problems. If, for example, a factory has a sign that boasts the number of days it's gone without an accident, it's sending the wrong message to workers, Veley argues. It encourages employees to downplay accidents or potential problems. Who wants to be responsible for resetting the number on the sign?

"The more you demand success, the less likely you are to hear about failure," says Veley, whose firm has more than 40 clients in the energy and chemical business, although not BP. "Darkness makes problems grow."
A Series of Unfortunate Incidents?

And then, of course, despite incident after incident, BP continues to claim that it's all a big series of coincidences:
BP argues that problems like the deaths in Texas City and the pipeline corrosion on the North Slope aren't related. It's caught in a series of unfortunate events, a Lemony Snicket tale for the Oil Patch.

Veley is particularly critical of the way companies often respond to accidents. Frequently, they resort to training videos and the like, things that stress worker behavior, but largely ignore management attitude, he says.

"It does nothing to change what people do," he says. "Changing what people do is a management job."
If it's going to effectively address its problems, Veley argues, BP will have to start encouraging workers to report problems, not discourage them.
Veley says companies typically respond to accidents by addressing only the harm that's caused, such as injuries, rather than the source of the accident itself.

If an accident doesn't result in an injury, it often doesn't get reported, he says.

Instead, companies should reward employees for reporting potential problems, he argues. Success, in other words, can be found by embracing shortcomings.
And instead of basking in the Schadenfreude, other companies might want to learn from BP's experience before it's too late.