Command-and-Control Disasters

BP’s high-profile culpability should be a lesson to all of us.

Thu, 06/17/2010 - 13:35

The worst man-made environmental disaster in history is a tough pill to swallow for everyone, but especially for those responsible for it. Overnight, BP’s name and reputation has turned from a respected energy company with a predictable dividend to the company that should not be named.

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So what makes BP better or worse than other companies? The Gulf of Mexico disaster could serve as a reminder that it’s often useful to put down the magnifying glass and pick up the mirror. BP stands guilty—quite visibly so—but don’t we all, even without the world’s attention focused on us?

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Comments

Submitted by Greg21 on Fri, 06/18/2010 - 07:26

Thanks for interesting article. I am particularly interested in your comment in second last paragraph, "When companies focus on reducing costs, costs increase - always."
I was wondering if you wouldn't mind providing a little more detail on this statement , perhaps with some examples showing why this is the case. Cost reduction seems to be a common strategy among companies especially when times are tough. If this is flawed thinking how can this be changed - what should companies do?
Thanks,
Greg

Hi Greg-

You are exactly right, most organizations have this mindset. Let me whet your appetite about the phrase.

Some organizations skip on maintenance to reduce costs and wind up paying more later.

Also, organizations outsource contact centers to reduce transaction costs, but wind up paying more because the design of the work is poor creating what is called failure demand (Seddon). Failure demand is demand caused by a failure to do something or do something right for a customer. Contact centers may have as much as 70-90% failure demand and we wind up outsourcing our waste. The focus to reduce costs does not address the systemic issues.

Come back next month and I'll address this issue more thoroughly.

Tripp

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