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BP Oil Spill: Preventable with Knowledge Management Software?

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August 10, 2010

BP Oil Spill: Preventable with Knowledge Management Software?

By David Sims, TMCnet Contributing Editor


Recently the Harvard Business Review posted an article looking at the remark by the new BP CEO, Bob Dudley, saying that the Gulf oil spill "has come out of nowhere" for the company.


"Maybe not," the article suggests. "Perhaps it was coming for quite a while."

Cast back your mind to the mid-nineties, the article says, when "BP was all the rage in management circles, in part because it was one of the very first firms to take the notion of knowledge management seriously."

John Browne, its then-new managing director, was interviewed by the article's authors -- Tom Davenport, Larry Prusak, and Brook Manville -- who were impressed with Browne's ability to "allow his people to make better decisions based on insight and experience BP had already gained, and to keep building those stores."

But by early 2000, BP's knowledge management was "in tatters," with the firm focusing more and more on controlling costs and boosting its share price, the article notes, "and its prized peer assist program, the jewel of its knowledge program, was barely functioning."

Other warning signs were there, including the Texas City refinery explosion in 2005, the Toledo refinery explosion in 2006 and the Alaskan pipeline rupture in 2006.

The articles' authors note that "BP also created higher incentives to find shortcuts and take risks," remarking that "We are not saying (we'd like to, but we can't prove it) that there is a causal relationship between the dismantling of a knowledge management program and the subsequent missteps that culminated in the Gulf disaster."

They do, however, trace out some lessons learned:

"By taking apart a successful program and not replacing it, or by replacing it in part by a system, a message was sent about human judgment versus rote processes, checkboxes, and rules."

Along with that, "a series of lesser disasters with no systemic and widely understood learning taking place enabled more and greater disasters."

A "climate of opinion" was established, the authors say, "invisible but as strong as iron, that was deleterious to debate, discussion, and collaborative decision-making. The parameters of decision-making were set up to reflect the emphasis on short-term costs and benefits."

Dudley claims that BP will learn a lot from the Gulf disaster, the authors say, adding that "We hope that's true, but there will have to be drastic changes in culture for that to happen. Maybe it's time to bring back knowledge."


David Sims is a contributing editor for TMCnet. To read more of David’s articles, please visit his columnist page. He also blogs for TMCnet here.

Edited by Juliana Kenny







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