Tag Archives: BP oil spill

The Parable of the Great Fire of London

This is from the book Aftershock:  Protect Yourself and Profit in the Next Global Financial Meltdown by David Wiedemer, Robert Wiedemer, and Cindy Spitzer.

It was fairly obvious, even in the seventeenth century, how major urban fires could be prevented and how a city should be built to be more fireproof and less vulnerable to extremely large fires.  However, the political reforms that would have been required to make London safer from large fires were so great that the changes needed to prevent a fire were never implemented before the Great Fire.

But, as is often the case, ignoring a potential problem was not enough to prevent it from happening.

Eventually, a serious fire broke out and destroyed all of London.  Once London was destroyed, people became far less resistant to making the big political reforms needed to keep it from recurring.  Previously resisted reforms were rapidly implemented and London never had a fire of that magnitude again.

Detail of painting from 1666 of the Great Fire of London by an unknown painter, depicting the fire as it would have appeared on the evening of Tuesday, 4 September from a boat in the vicinity of Tower Wharf. The Tower of London is on the right and London Bridge on the left, with St. Paul's Cathedral in the distance, surrounded by the tallest flames.

How bad was this fire?  From Wikipedia:

The Great Fire of London was a major conflagration that swept through the central parts of the English city of London, from Sunday, 2 September to Wednesday, 5 September 1666.  The fire gutted the medieval City of London inside the old Roman City Wall…  It consumed 13,200 houses, 87 parish churches, St. Paul’s Cathedral, and most of the buildings of the City authorities. It is estimated that it destroyed the homes of 70,000 of the City’s 80,000 inhabitants.

There was no shortage of warnings about the danger. Voices spoke loudly and clearly against the danger.  But no one was willing to do the hard work, the quite “unpopular” work, of making decisions that could have lessened the consequences — until after the worst case scenario finally happened.  No one took the worst case scenario seriously enough to act.  And I would say that 70,000 homes destroyed in a city of 80,000 inhabitants qualifies as the worst case scenario.

So, here is the lesson of this parable.  It would be a wise move indeed to pay attention to worst case scenarios, and act before these scenarios become reality.

But to take such action requires massive courage in the face of opposition.

Just think…  If only Exxon had learned this lesson before the Valdez.  Or, if only BP had learned this lesson before the great oil spill.  A lot of money spent early (admittedly, a hefty amount) would have saved a much greater amount of money, and significant destruction — to the environment; to the economy; and, in the BP case, to the very real lives of the families of those who died in the explosion.

I think that companies, and cities, and governments need to heed the parable of the Great Fire of London.  Because, the real lesson is this (quoting again from the book):

But, as is often the case, ignoring a potential problem was not enough to prevent it from happening.

And here is the obvious next question that we really need to answer:  what warnings are we not giving enough attention to today?

Let’s Call It The “We Can’t Keep Up” Syndrome

Here’s what I’m trying to say:  we don’t yet know how to do everything we are trying to do.  And that can be a real problem.

The totals are now beyond what most of us could have only imagined — and feared.  The total number of gallons of oil that have spewed into the Gulf from the BP disaster has probably surpassed 200 million gallons  (The figures are not precise — I did the math from this web site).  This is 18x the number of gallons from the Exxon Valdez disaster.  It seems like such a long time ago that Tony Hayward, and Haley Barbour, and others, stated that the Gulf was a big ocean and would easily disperse the oil harmlessly.  They were, sadly, wrong.  We have learned that lesson the hard way.

And the new iPhone is running into turmoil that is building day after day.  Partly because, in my opinion, AT&T was not yet ready to provide the infrastructure for all that technology.  It was too much innovation and implementation too soon.  The capacity to execute can not quite keep up with the needs of the era, with ever more challenging products and projects.  Consider this excerpt of AT&T CTO: ‘We will move heaven and Earth’ to improve our network by Anthony Ha (full article here):

When VentureBeat Editor in Chief Matt Marshall got a chance to ask AT&T Chief Technology Officer John Donovan a few questions on-stage, he asked what kinds of issues are holding back network quality. It’s a little bit of everything, Donovan replied. With a flood of new chipsets, phones, and applications, the traditional device testing and rollout methods have “broken down.” In addition, AT&T recently faced a shortage of the components needed to improve its network.

“I’ll tell you the things it’s not been,” Donovan said. “It’s not been capital, it’s not been conviction and commitment.” AT&T “will move heaven and Earth” to meet its customers’ growing data needs, he said.

I have blogged before (a few times) about the formulation from Atul Gawande’s The Checklist Manifesto, re. the two great problems:  ignorance and ineptitude.  Here’s the key quote:

We have just two reasons that we may fail.
The first is ignorance – we may err because science has given us only a partial understanding of the world and how it works.  There are skyscrapers we do not yet know how to build, snowstorms we cannot predict, heart attacks we still haven’t learned how to stop. The second type of failure the philosophers call ineptitude – because in these instances the knowledge exists, yet we fail to apply it correctly  This is the skyscraper that is built wrong and collapses, the snowstorm whose signs the meteorologist just plain missed, the stab wound from a weapon the doctors forgot to ask about.
For nearly all of history, people’s lives have been governed primarily by ignorance.

But there is a third problem, one that does not quite have a name yet.  Let’s call it the “we can’t keep up” syndrome.  Maybe it is a subset of one of the two by Gawande.  But it presents a unique challenge to the modern business environment.

It is not entirely new.  In the early days of television, there were television set makers dependent on television networks dependent on television makers.  It was a circle of interdependency, a complex set of interconnections, with officially disconnected but very interdependent companies needing every company in the mix to keep up.  And keeping up was tough.

Just in the last year, television stations have switched to HD, needing the cable channels to provide slots for their new HD channels, with the cable channels needing the stations to broadcast in HD.  Everything is so interconnected, interdependent.  Everyone has to succeed for anyone to succeed – one has to succeed for all to possibly succeed.

And then, the ripple effects.  There is now no doubt that people working in companies with much better safety records than BP are paying the price for BP’s failures.  Jobs are leaving the Gulf for other oceans across the globe.  The moratorium, which many object to (but – can you imagine if a second well had this kind of disaster right now?) means that costly equipment has to go where there is work.  And then the equipment will be run by a new set of workers.

But here is the deal.  Companies, entire industries, need to learn, adapt, innovate as they go…and it is tough to keep up.

Maybe the problem is not incompetence.  Maybe the problem is not ineptitude (though there were serious mistakes made).  Maybe it is simply that we are in a perpetual growth/innovation/need-to-get-it-right era, and there will always be a need for version 2.0 and 2.8 and 7.0 in nearly every arena.

If all it means is that I have to wait for the next software update on my iPhone, I’m ok with that.  But if it destroys the environment on the Gulf Coast for hundreds of miles, then it becomes a much more serious matter.

Ray Kroc And The Parable Of The Dead Fly – (A Lesson Too Late For BP’s Tony Hayward To Now Learn)

Tony Hayward’s yacht, left, sailed in the J. P. Morgan Asset Management Round the Island Race on Saturday. (photo from the NY Times: Chris Ison/Press Association, via Associated Press).

News item:
BP Chief Draws Outrage for Attending Yacht Race: BP officials on Saturday scrambled yet again to respond to another public relations challenge when their embattled chief executive, Tony Hayward, spent the day off the coast of England watching his yacht compete in one of the world’s largest races.

I apologize – it’s been too many years, and too many books back.  So, I can’t tell you where I read this, but I have a vague memory it was in an early Tom Peters book.  I definitely could be wrong.

But I remember reading that Ray Kroc once found a dead fly on the floor in one McDonald’s location (I think I remember it was in Canada).  He immediately closed down the location, took away the franchise, and in one fell swoop, made it clear that there would be McDonald’s employees keeping every square inch of each and every McDonald’s clean from that day forward.

I thought of this as I read about Tony Hayward attending a yacht race over the weekend.  You know, Tony Hayward, the CEO of BP, who “will not rest until the situation is resolved.”

To put it simply:

What Tony Hayward said:
BP boss Tony Hayward said Thursday the British energy company “will not rest” until the Gulf of Mexico oil spill has been cleaned up, vowing to learn the lessons of such a “terrible event.”

What Tony Hayward also said:
“I would like my life back.”

What Tony Hayward did:
Attended a yacht race.

History photo of Ray Kroc washing down the walk of the first store in Des Plaines, IL.

The leadership principle is this:  symbols matter, and symbols represent and communicate reality.  If you have a dead fly on the floor of your restaurant, your restaurant is not clean enough.  If you shut down a location with a dead fly, you make it clear to all involved – you will not tolerate restaurants that are not kept clean!

Thus, the opposite is also true.  If you fly across the ocean to attend a yacht race, then you are not focused on the 25,000 – 60,000 barrels of oil still spewing every single day, every 24 hours, (an Exxon Valdez size attack on the environment every 4-5 days).  Regardless of your claims that BP “will not rest” until the Gulf of Mexico oil spill has been cleaned up.”

There are other such notable failures by “leaders” in the symbolic actions department.  Fairly recently, we remember this gigantic fail:  as Bear Stearns was disintegrating, James Cayne, its CEO, was playing in a bridge tournament:
During 10 critical days of this crisis — one of the worst in the securities firm’s 84-year history — Bear’s chief executive wasn’t near his Wall Street office. James Cayne was playing in a bridge tournament in Nashville, Tenn., without a cellphone or an email device. In one closely watched competition, his team placed in the top third.  As Bear’s fund meltdown was helping spark this year’s mortgage-market and credit convulsions, Mr. Cayne at times missed key events.

The principle is clear:  keep focused on the issue at hand.  And demonstrate that focus with actions that are actual actions, while making sure that your “symbolic actions” match your intended and stated focus.

And, whatever you do, do not allow some action/behavior (or is that “behaviour”) to demonstrate that you are not focused on the need of the hour.

If you are a leader, this is one you’d best learn.  Because, when you get this wrong, your reputation is set – and not in a good way.

History shot of Fred Turner and Ray Kroc at the 2500th store. Fred Turner is holding a mop and Ray Kroc is holding a broom.