Friday, June 18, 2010

BP spill

I haven't posted a public policy post lately, but the Congressional hearings on the BP skill are driving me a bit crazy.

Yeah, I know I know these things are always about demogogueing and pounding the podium for campaign material, not actual fact finding. But the questions they are asking are just ridiculous.

If you are hiring a CEO for a huge corporation, what would you tell him or her to spend his/her time focused on:
  • making large strategic decisions about the company's future
  • second guessing the technical experts about technical decisions
  • studying the technical decisions so you understand them
I vote for #1. #2 is definitely off the table. And #3 sounds good, but it would take all day so I would rather skip it and stick with #1.

So why ask the BP CEO why they went with this kind of collar and grade of steel v another? What they should be asking him is how the balance between safety, cost, and profit potential was established and how it was communicated and implemented to the technical experts. Were they rewarded for taking short cuts? Were they discouraged from looking into the risks of shortcuts they took? How were risk mgmt procedures selected and managed?

This is what the CEO should either know or be able to find out. If they want to know about the collars, they need to bring in the BP technicians and ask them how and why they chose. Ask them how they justify the reduced safety of their choices. What were the tradeoffs they made at those times?

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