I always thought it was ironic that the explosion of the Transocean Deepwater Horizon occurred in the Gulf of New Mexico two days before Earth Day, and on Earth Day itself, on April 22nd, 2010, the oil rig sank into the depths of the Gulf beginning the long saga of the largest US oil spill in history. An estimated 200,000 GALLONS of crude oil PER DAY were released into the gulf destroying wildlife and affecting many communities along the coast. What was clearly illuminated in the tragedy last year was the intense focus of management strictly on the financial returns rather than taking a comprehensive look at the social and environmental returns as well. This one dimensional thinking strictly for financial returns proved to be a literal disaster.
When consulting with clients, 1000 Cranes reviews the aspects of Sustainable Strategic Planning where the financial returns on investment are critical, but also consideration MUST be given to social and environmental returns as well all in a framework of high ethical standards. As we all see in retrospect with the BP Oil Spill, when decisions are made exclusively on financial returns, the negative social and environmental impacts are amplified. Much of this could have been prevented had BP and Transocean considered some of these other key aspects of their planning process.
Chip and Dan Heath mention in their book, “Switch: How to Change Things when Change is Hard,” about the strategic vision of BP at the time was “No Dry Holes.” In other words, the decision to drill in any location was primarily focused on the likelihood of whether oil would be found. Every drill attempt should result in finding oil. This new vision improved their probability and influenced BP’s decision making. Unfortunately, this one dimensional thinking proved to be a huge error on BP’s part. Of course, the company “struck the mother lode” when they first discovered the Macondo Prospect Oil Field, but it should have considered the warning signs of the initial pressure gauges and seen that this initial drilling would have problems. Executives were too focused on the financial bottom line, thrilled at the prospect of a huge reserve that had been largely untapped. Unfortunately, the social and environmental impacts were not considered. Regretfully, hindsight is twenty-twenty, and it’s clear that more precautions should have been taken prior to the decisions that were made to speed up the drilling process.
Sustainable Strategic Planning should:
1) Review the financial returns of decisions
2) Analyze the social returns and impacts of decisions
3) Consider the environmental impacts of decisions
4) Maintain the utmost in ethical standards
This anniversary is a good time to reflect on the mistakes of BP and Transocean. Let us learn from their mistakes and consider ways where we can incorporate multi-layer thinking into the sustainable strategic planning process.
What decisions have you made as an organization that should have considered other aspects of the sustainable strategic planning model?
What can be done in your organization to increase your awareness of all aspects of strategic planning prior to initiating a vision?
Have you considered reviewing the social and environmental impacts of decisions prior to the financial returns to ensure they are addressed?