Mental biases post-Deepwater


I don’t know about you, but when I hear the words “long-string well design” as it relates to building a massive pipeline for oil harvested from below the ocean floor to be pumped up to a big tank on the surface, my first thought is “what could possibly go wrong?”

It’s official, folks. In the wake of the disastrous oil spill in which President Obama spent significant time calling out BP and former CEO Tony Hayward in the media for poor risk management, a presidential commission found that BP was guilty of risky behavior that contributed to the disaster. The consistency of it all is overwhelming.

I won’t delve into the political angle of the disaster as I’ve already taken one shower today, however, this extremely unfortunate event does expose the mental biases that allow the reaction to a disaster to become so predictable…and unhelpful.

Let’s start with the motives of the presidential commission. You are heading up the investigation into the oil spill. Your boss has been publicly critical of BP for their role in the disaster. What would you guess is the probability of you saying, “you know, after careful consideration, all the decisions that BP took at the time they were taken and with the information available at the time were actually sound, and actually most of them were taken in isolation of the others since it was not apparent that any of them would affect the others?” I’ll venture a guess – less than 0%.

So, predictably the commission went looking for causes, and sure enough, they found them. This is just a guess, but if you ran some of these causes by some of the most knowledgeable, technically-oriented engineers responsible for the oil rig, they would come up with very compelling reasons why the causes given in the report were absolute nonsense and had nothing to do with the real problem – which will most likely remain a mystery forever. Our brains need to connect events through a cause and effect relationship even where none may exist.

Secondly, history is created by a series of individual decisions taken by individuals who are doing what they believe is best for them. There was not any over-arching strategy to ignore risk, but rather a series of individual decisions that unknowingly added up to increased risk of a disaster. Risk managers are put in the position of either telling a company that what they are doing is very risky – something not easily mitigated by a small investment, or justifying the current position by telling senior execs that they have thought of a risk, but that they have it covered. This is what the execs, deep down, want to hear. If they say something like “we are exposed to massive risk,” unless they are new to the job, will face the question of “well, why have you just thought of this now? What have you been doing for the past x months/years/decades.”

Or, in a more extreme example, they may be in the position of saying, what we are doing is inherently very risky – the only way to mitigate it is to not perform this activity. Those at the top, including Hayward, could hardly announce one day that they would stop drilling for oil in the ocean – just imagine the reaction of the shareholders! There is an illusion that those at the top are in control of historical events. In reality, they are swept along by a powerful wave consisting of all the individual decisions, emotions, and motives of those doing the work, fighting the war, or writing presidential commission reports.

The themes (not the details) of the presidential commission report were decided well before the report was even begun – the themes were decided as soon as a hurricane of causes came together to cause the first drop of oil to enter the Gulf of Mexico.

We are not without hope, however. We can be forward-looking to a degree when performing risk management. That topic has been addressed in previous posts, and will continue to be a theme of this blog.


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