Posts Tagged ‘oil spill’

The presence of Enbridge CEO Pat Daniel on the front lines of the pipeline spill in Michigan apparently has some people stumped. Why is he spending so much time in Michigan, talking to people and making sure the right information gets out? Shouldn’t he be in Calgary? Isn’t that micromanagement?

It’s simple really. Pat Daniel understands the driving force behind Enbridge’s business: its pipeline network. Without pipelines, Enbridge’s business model basically disappears. After all, the company exists to distribute oil and gas through pipelines. There are other activities, but that’s pretty much its business.

The spill in Michigan, and what appears to be a smaller spill in Illinois last week, potentially threaten the viability of the enterprise. That’s why the CEO has to be on the front lines, leading and managing the situation, to make sure that it gets resolved quickly and satisfactorily for all stakeholders. If they get it right, they increase their chances of continuing their strategy of investing in new lines to ship Alberta oil to the U.S. Failure in this endeavour would endanger the whole business.

Richard Martin is founder and president of Alcera Consulting Inc. He brings his military and business leadership experience to bear for executives and organizations seeking to exploit change, maximize opportunity, and minimize risk.
© 2010 Richard Martin. Reproduction and quotes are permitted with proper attribution.

I’ve been quoted in an article on the Enbridge oil spill in Michigan by Lauren Krugel of the Canadian Press. This article has already appeared on the Canadian Business and Macleans websites and in a number of newspapers across Canada.

How long should it take to change a corporate culture? BP has been struggling to change its safety and risk management culture since at least 2005. The BP board was right to ouster Tony Hayward, because it’s taken too long, with the results we’ve seen in the Gulf of Mexico. The reality is that changes can be almost immediate if the CEO and board back up and support the people in the organization who see what is required to make the change. They have to be ruthless in punishing unacceptable behavior and in rooting out holdouts. They also have to promote and reward supervisors, managers and executives that believe in the new orientation. They must literally lead the charge to change practices and beliefs in the organization, even to the point of correcting minor mistakes and micromanaging initiatives that are critical to the strategic change. That isn’t what is taught in MBA courses on strategic management and leadership, but that is what is required for truly deep strategic change to be successful.

© 2010 Richard Martin. Reproduction and quotes permitted with attribution.

Listen to the podcast: On Target 14-06-2010

BP CEO Tony Hayward’s performance in the Deepwater Horizon disaster in the Gulf of Mexico leads us to ask if companies can better prepare their executives for crises. At times, Hayward has seemed exhausted and despondent. His comments about wishing he could go back to life as usual and his occasional musings minimizing the ecological impact of the disaster clearly show someone who is out of his depth. This is to be expected in someone with little or no training in crisis leadership and decision-making.

I know of only one organization that truly prepares its leaders for crisis leadership, and that is the military. Compare Hayward’s discomfort with the coolness and reserve of Admiral Thad Allen. His command and leadership skills have been honed over a career in progressively demanding positions, including that of directing US federal relief efforts after Hurricane Katrina. His statement a few weeks ago that “We need to start under-promising and over-delivering” was at once refreshing and indicative of someone who has respect for the public and shows prudence in dealing with uncertainty. There is currently nothing comparable in the business world.

It is time for companies to emulate the military and to better prepare their senior executives and middle managers for crisis response and leadership under stress. Companies must select managers with excellent business acumen, but they also have a fiduciary responsibility to prepare and train them for disasters and crises, particularly when their actions and operations have such momentous risks.

© 2010 Richard Martin. Reproduction and quotes are permitted with proper attribution.

In this short clip, I was interviewed about some of the challenges and decision factors that high-level leaders such as Obama and BP CEO Tony Hayward might be facing as a result of the oil spill crisis in the Gulf of Mexico.

© 2010 Richard Martin