Don’t Let BP’s Disaster Happen to You: Uncover Your Risks Now!
Steven Minsky | Oct. 13, 2010
Everyone closely followed the BP saga that began last spring. Could this reputational and environmental catastrophe have been avoided through uncovering weaknesses in their risk management program? The disaster, which is estimated to cost the company up to $37 billion, left a resounding fear in everyone’s mind–could something like this happen to my company? Can I help my company be better prepared?
To these three questions, the answer is simply yes.
Now former BP CEO, Tony Hayward, said soon after the disastrous explosion on the Deepwater Horizon rig: “This was not our accident … This was not our drilling rig … This was Transocean’s rig. Their systems. Their people. Their equipment,” But, at end of the day, as BP has now admitted, the company is held “ultimately responsible” for the spill and cleanup. Every organization, including yours, outsources activities to vendors, but you still own the risk of those activities.
How are you managing your vendor relationship risks today to assure that, what happened at BP doesn’t happen on your watch? Can you quickly identify which of your vendors are critical? Do you know which vendors you rely upon to achieve each of your strategic imperatives? How can you be sure that you are not missing the combination of vendors, products and processes that combine to create a career ending scenario?
Had BP asked some of these crucial questions, they could have discovered the weaknesses in their vendor management and program oversight risk plans. You may already be working on these issues and may have some answers. In my blog post in October 2006, BP Oil Pipeline Leak: A Cry for Enterprise Risk Management, I outlined the opportunity to get ready for their next big disaster. Perhaps this time, lessons can be learned by BP and others as unexpected events tend to occur each four years.