Wednesday, April 25, 2012

Slippery when oily

More than two years ago, BP lost control of a well it was drilling using the Deepwater Horizon oil rig in the Gulf of Mexico. 700 million liters of oil poured into the ocean and the consequences for business, society and environment have since been widely discussed. The oil spill in the Gulf of Mexico is still a rich case study for various subjects related to stakeholder management and I have been following the issue of high-tech oil extraction more or less closely during the past years.
However, I am still surprised and somewhat indignant about the behavior of some of the affected stakeholders, based on their assertions that they have learned their lessons. This is because a few days ago a report showed that the United States government and the oil and gas industry have both failed to effectively improve the regulation and safety of offshore oil drilling. The report issued by Oceana, the largest international organization for protecting the oceans, further states that during the past ten months, at least three more leaking oil wells have been detected.

We know from many other case studies that changes in regulation and the implementation of successful business models take time, in spite of initial wake-up calls or public outrage. We have also heard of time-taking learning processes, slow processes of institutionalization and the tedious development of organizational cultures. It is clear that strategic, organizational and technological change processes cannot be implemented overnight. Yet, I am asking myself, why I still get upset reading reports like the one from Oceana? Some self-reflection led me to three possible causes for my astonishment.
First, as I am not a part of the oil business itself, I do not know what kind of systemic pressures oil companies are exposed to. As most of the oil companies are listed on stock exchanges, financial results have to be provided on a quarterly basis. This clearly supports short-term thinking, which is at odds with long term oriented fundamental change processes. Moreover, my personal concept of value creation is broader than the focus on maximizing financial profits.

Second, I think that my perception of issues like the oil spill in the Gulf of Mexico is framed by the coverage in the media. Spectacular and more recent events have a bigger impact on the readership than long-lasting change processes in the business models of organizations. The same is true regarding the media coverage of negative news compared to positive news. It is in this context that I think there exists a huge potential with new social media to accompany such organizational change processes in a timely manner and thus make them more visible.
Last but not least, there is the matter of dealing with causes and effects. The debates in the aftermath of the oil spill mainly covered the issue of improved regulations regarding deepwater drilling. However, this focus on symptoms of deepwater drilling does not take a sustainable perspective. As deepwater drilling is the cause of oil spills, we have to question if we are really capable to perform it in a safe way. Otherwise, it remains slippery on the oily ground.

Tom Schneider

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