BP Oil Disaster and Nonprofits

Pardon the bad pun, but is there any spillover from the BP oil disaster that nonprofits can learn from? At first it may seem like a stretch. BP is a mega-corporation where the primary mission is, or so it seems, profits and more profits. Yet, to make another bad pun, drilling a bit deeper, BP demonstrates a number of organizational issues – magnified considerably – that even small nonprofits may also experience.

Pardon the bad pun, but is there any spillover from the BP oil disaster that nonprofits can learn from? At first it may seem like a stretch. BP is a mega-corporation where the primary mission is, or so it seems, profits and more profits. Yet, to make another bad pun, drilling a bit deeper, BP demonstrates a number of organizational issues – magnified considerably – that even small nonprofits may also experience.

I started thinking about this upon reading a chilling, yet fascinating, article in the New York Times: “In BP’s Record, a History of Boldness and Costly Blunders” (by Sarah Lyall, July 12, 2010). Ms. Lyall and other Times reporters catalog BP’s history of taking huge risks, cutting corners, slashing investments in safety and people, putting profits above all considerations, and, consequently, experiencing a string of devastating accidents – the Deep Water Horizon disaster in the Gulf of Mexico is only BP’s latest.

Lessons That Can Be Shared

Here are a few dynamics common to all organizations – organizational culture, leadership. and setting goals and assessing outcomes.

Organizational Culture

Ever notice how different it can feel in different organizations? In one, people may seem rowdy and frantic, and in another quiet and methodical. People may address each other cheerfully or barely at all. Critical discussions may be sanctioned or avoided. These are all indicators of organizational culture.

BP’s culture appears to have been one of dramatic risk-taking. Under CEO Tony Hayward, BP started to create more awareness and commitment to worker safety, but that effort was only beginning to take hold. Most importantly, BP’s culture did not entertain questioning and raising of concerns. Worker warnings about the Deepwater Horizon rig prior to the disaster were ignored.

I observe the culture of any nonprofit I work with. Some, while expressing values of participation and open communication, may actually have cultures where people don’t speak up (perhaps because they don’t feel safe), and mistakes and problems go unaddressed. And such a culture will continue to hold sway, even when there is turnover. I’ve worked with organizations characterized by ongoing conflict, even though the individuals and the topics changed over time.

Leadership Matters

Of course, CEO Hayward has resigned, in part due to perceptions that he failed to recognize and communicate the extent and impact of the disaster. The Times mentions internal changes that Hayward was making at BP. But for the most part, he was carrying on from the previous charismatic leader, Lord John Browne, who turned BP into the behemoth it is today. Browne was forced to resign under pressure in 2007 for various reasons, including accidents and other management problems. Clearly the culture of BP has reflected the interests and hubris of its top leadership. And that culture remained in place, even as there was a leadership transition. One wonders whether the incoming CEO, Bob Dudley, will chart a new course.

It Pays To Be Green

BP has tried to create a “green” image for the company over the years, even going as far as to say they were “Beyond Petroleum.” Perhaps a much greater commitment to environmental protection may have also promoted more responsible risk-taking, improved safety, and saved the company a lot of money.

Even when there is a focus on participation and sharing decision making, leadership in nonprofits does matter. While everyone has responsibility, leaders have much greater influence in setting agendas and expectations around communication, conflict, teamwork, etc. It quickly becomes obvious if leaders are truly open to hearing concerns and feedback.

A Focus on What Is Measured

Highest possible profits and stockholder benefit seem to have been the major metrics of success at BP. While there were improvements during Hayward’s tenure, safety and environmental stewardship appear to have been secondary concerns.

While the quarterly earnings report isn’t the driving force for nonprofits, there are some comparisons. Some nonprofits chase whatever program funds are available, whether central to the mission or not. I’ve had contact with many organizations who bulked up on the steroids of large grants, started new programs and hired multiple staff, only to enter into severe crises when the grant funding went away.

Other nonprofits focus only on the number of people served without evaluating the quality of the services provided. Many nonprofit organizations don’t invest in professional and leadership development, technology or infrastructure needs. Of course, funders and the government may help promote some of these trends by offering limited-time program start-up grants without supporting long-term organizational sustainability.

Take a Serious Look

Perhaps one positive outcome of the disaster in the Gulf is that BP will take a serious look at itself. And it can also be valuable for nonprofits of any size to openly and honestly discuss organizational culture, leadership, what’s measured, how concerns are addressed and more.

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