What BP’s Oil Spill Says About Management Today

How many experts does it take to cap a leaking oil
well? Answer: apparently, more than we have available.

The month-old environmental disaster unfolding in the Gulf of Mexico
highlights a core problem companies (and societies at large) face
today: the inability of most people, including the experts, to keep
pace in a fast changing, dynamic marketplace and to respond effectively
when conditions are complex and ambiguous. I’ve been forecasting this
crisis for years.

Still, even if our “catastrophes” as managers are much smaller in
scale, there are a lot of practical lessons leaders can learn from the
mistakes both BP and the federal government are making in how they’re
responding to the massive oil spill off Louisiana. More on that below.

First, let’s look briefly at the grave problems some recent disasters
have exposed: The collapse of the Twin Towers in New York City. The
failure of levees in New Orleans.  The catastrophic collapse of our
financial system. The explosion of an oil rig.  These images are
painful. The inability to fix the problem and contain the collateral
damage is excruciating. The challenge that even the experts experience
is the need to simultaneously gather, decipher, analyze, decide and then
act on information with little margin for error. But the available
information is sometimes ambiguous. When information and data becomes
available, it’s often contradictory.

The sheer scale and scope of a problem like BP’s leaking oil well and
the speed of change are almost beyond comprehension, stretching our old
ways of thinking to the breaking point. The damage that occurs when
these unprecedented problems persist without solutions is exponentially
catastrophic. Because of this continuous, rapid pace of change and an
unprecedented urgency to act, more and more people need to make good
decisions quickly.  

But the world is reorganizing on the fly. Consequently, the ability
to solve unprecedented and unanticipated complex problems is a
sought-after skill, one that is seemingly in short supply. U.S. Energy
Secretary Steven Chu, for example, recently signaled his lack of
confidence in the ability of industry experts trying to control BP’s
leaking oil well by hand-picking a team of “extraordinarily intelligent “
 with reputations for creative problem-solving .

Some might argue that the world is already too complicated for us.
Some people are quite resourceful, making great decisions and
troubleshooting problems with the information they have on hand. Others
act like deer caught it in the headlights. Unfortunately neither tactic
provides viable solutions during tumultuous times.

It is now painfully obvious that attempting to manage a business in
today’s tumultuous environment has undeniable similarities to navigating
a river with “permanent
Management today, and into the unforeseeable future,
must be able to complete a lot of important work in a short time under
harrowing conditions, on the basis of only a few hunches and a lot of
instinct, none of them precise.

In many organizations, managers are expected to make critical
decisions in real-time significantly less complex than capping a leaking
oil well 5,000 feet below sea level.  Many managers lack the depth and
breadth of skills to deal with the unintended consequences of past
decisions and unprecedented environmental changes.

Successful managers and leaders from this point forward must possess
the ability to respond effectively to the increased pace of change in an
unstable, technologically advanced, complex environment. Unfortunately
for far too many of us, the bandwidth is still operating  on “dial-up”
in a broadband world. 

Navigating a business successfully through turbulent times requires
the ability to deal with ambiguity, be resilient in the face of
adversity, be authentic and have the innovative
to anticipate and respond to the unpredictable environment.
Consequently, leading through permanent whitewater requires an ability
to sense, make sense, decide and act quickly. It requires a sharp mind,
humility and an openness to new experiences. 

How prepared are you and your team to meet the future?

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