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Deepwater Horizon: Setting the Stage

Deepwater Horizon: Setting the Stage
On April 20th, 2010, a surge of natural gas blasted through the concrete oil well core of the Deepwater Horizon drilling platform, positioned on the ocean surface, some 5,000 meters above, about 41 miles off the coast of Louisiana in United States, Gulf of Mexico. The gas that passed through the fractured core traveled up the deep waters rig riser to the platform, where it ignited and exploded causing 11 deaths and 17 injuries. The resulting oil spill took several months to fully contain, and forensic analysts believe that almost five million barrels or 210 million gallons of oil was released into the Gulf, devastating the ecosystem, creating a public relations nightmare, and all at a cost of almost $62 billion for the responsible company.
Do you remember the name of the company responsible for Deepwater Horizon? Would you consider this a crisis for BP? They were the company responsible. I think it’s fair to categorize this event as a crisis. Do you remember who was actually managing the work on the oil platform? It wasn’t BP, it was a company called Transocean. Was Deepwater Horizon a crisis for Transocean? Of course it was. Bonus points, if you know who actually manufactured the Deepwater Horizon platform. It was the heavy engineering arm of Hyundai that built the platform. Was Deepwater Horizon a crisis for them as well?
Well, if something you manufactured is the source of a raging fire and getting attention from every media outlet on the planet, yes, this is a crisis. Now I’m not going to suggest that crises have to be this visually dramatic for them to qualify as the disruption that could determine the future of a company. In fact, some crises are almost imperceptible to anyone other than the team or a person attempting to manage it. During this course, we’re going to explore why crisis can be so devastating and so challenging to manage. For our purposes, we’re not going to argue about the threshold between what we could call a crisis versus what we might call a major disruption of some sort.
We’re not going to argue primarily because drawing a bright line between the two ideas isn’t really useful to us. What is useful is defining a category of events that have a unique set of characteristics. Characteristics we will examine in this course that require most if not all, of leaderships attention to manage. Events that, if not managed effectively, could seriously and permanently impact the future of an enterprise. We’ll define a crisis for this course as an unstable or crucial time or state of affairs in which a decisive change is impending; especially, a change with the distinct possibility of a highly undesirable outcome. I’m going to use this particular definition to make the following argument.
In crisis situations, because the chances of highly undesirable outcomes are high, and these outcomes are likely to have significant and material impact on the lives and well-being of the people involved, the high-stakes leadership, hence the name of this course, is largely a people-centric endeavor. That much, a crisis leadership is about understanding and engaging with the stakeholders whose interests are threatened by the potential outcomes of the crisis at hand. In over 35 years of being in leadership positions helping guide organizations through crisis, I can tell you what you should expect to see in a crisis. First, during a crisis, everyone involved will look to organizational leaders for tangible evidence of leadership. Who is in charge? What actions are they taking?
How serious is the trouble we’re in? Second, when these people are looking for leadership, they want and need leaders that they can believe in. Will everything be okay? Will the company survive? Will I still get the product or service or value that I expected? Will I still have a job? Third, as high-stakes leadership is about addressing these fears as effectively as possible, I submit that the very best path forward for gaining or regaining the trust of these stake holders, in the recovery and the future success of the organization, is to truly understand and appreciate their perspective.
Not simply your own as a member of the leadership team, but if theirs, and what you’ll find is that each stakeholder or stakeholder group has a very unique perspective on and unique concerns about each high-stake situation. Throughout this course, we will explore how engaging with these stakeholders will become a priority for enterprise leaders. How should they be engaged? What will they want to hear? How should we as enterprise leaders, engage each of them in a way that delivers the information they need and retains or restores their trust in our ability to lead. Looking back on the Deepwater Horizon crisis, what unique stakeholder groups come to mind?
What distinct groups of people can you think of, have specific and unique interests in the outcomes of the crisis? How about the C-suite, the executive teams of BP or Transocean or Hyundai? What are they most concerned about? How about the employees of these organizations? What are they most concerned about? Are these concerns perfectly aligned with those of the executive teams or are they at least slightly different? How about the customers of these companies? Their investors, government regulators, the media, competitors. If you give these groups some thought, you’ll see that while their interests might overlap to some extent, they’re clearly not the same. It’s this unique set of interest and concerns that will serve as the foundation of our time together.
How can we better understand the desires and concerns of all stakeholders with an interest in our organization? How will this improve understanding help us lead a better business? How can the relationships we build with these stakeholders help us identify opportunities for improvement when the stakes are low, and provide a foundation of trust and open communication channels when things aren’t going so well for our business and the stakes are high? How can these stakeholder relationships improve our capacity for resilience? These questions and many more will be the topics we explore together during this course about high-stakes leadership.
The relationships worth developing to help us create an organization that is as prepared as it can be, for the inevitable collection of challenges and disruptions that are core elements of today’s complex, ambiguous, uncertain, and often volatile business environment.
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High Stakes Leadership: Leading in Times of Crisis

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