Why Do Companies like BP Choose a Culture of Growth with Cost-cutting rather than a Culture of Safety?

In Organizational Culture Change

Changing the BP culture

Bob Dudley–the new chief executive of BP– stated he will move BP to having a greater safety culture.

In his September 2010 press release, he describes safety and risk management as BP’s most urgent priority. Dudley instituted a structural change–a new Safety & Operational Risk division headed by Mark Bly– to strengthen the safety focus.

In a press release dated Feb. 1, 2011, BP states:

BP’s immediate priority is to complete the process of embedding world-class safety and operational risk management at the heart of the group’s approach to all its activities and throughout all its operations.

Of course, if you are truly embedding safety into all aspects of your culture, the process never ends–it’s an ongoing focus where everyone continually thinks of new and better ways to improve the safety focus.

Safety must be a BP culture Priority

A Wall Street Journal article says that BP critics point to BP’s historical focus on deal-making and growth rather than on safety and operational excellence. The article sites major challenges that BP faces to changing the culture, including fixing aging infrastructure and changing staffing to reduce worker fatigue.

But the causes are more complex, according to a U.S. presidential commission report by the National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling.

The causes are described as systemic issues. Examples include:

  • Flaws in BP’s management and design procedures
  • Failures to appreciate risks
  • Poor communication between BP and Halliburton
  • Lack of communication and training about lessons learned from prior problems
  • Government regulators lacking the authority, necessary resources and technical expertise
  • Using time-saving and cost-saving measures

Why is it that so many problems are due to a focus on profits over safety? Repeatedly, a focus on growth at the expense of safety or quality leads companies on a dangerous path that affects human lives. It’s not just BP that has taken this path. Look at the recent problems with Toyota. Companies like Toyota have been known in the past for having a quality and safety culture, yet they have moved in the wrong direction. When major quality or safety issues are exposed to the public, by either a disaster or a recall, the changes in the culture are often systemic–it’s not an isolated error but a change in values.

If a company like BP wants a safety culture, it must implement massive changes– throughout every aspect of the organization–that are guided by that safety focus. It must do more than just re-structuring or changing incentives and rewards.

The changes must start at the heart of the culture–at its core–where employees stop for a moment to reflect on the values that are important and together create a shared view. If safety is what’s valued over profits, then employees should not be over-worked, and faulty equipment and poor maintenance should not be allowed.

Leaders must be the #1 advocate for safety–in the case of BP, does Dudley talk about safety every day?

And all actions must be aligned with the safety philosophy. Employees should be applauded for reporting problems so they can be fixed and prevented throughout the company. Open communication–bottom/up as well as top/down– can be a great contributor to building a safety focus. Contractors must be held to the same high standards, and if they don’t meet the standards, they must be changed. Cuts in staffing and training can have significant impact on safety so those areas must be monitored so safety standards are not compromised. Employees should be hired not only for competency but also because they personally value safety. It should be the role of each employee to enhance the safety culture.

Changing a culture is a process. It takes time, but it must be more than just add-ons. It must be part of the company’s core–its DNA. Making safety #1 should be a decision that everyone participates in and owns. And if safety is the company’s prime principle, then it must come first before anything else–including profits and growth.