Saturday, June 5, 2010

Case study: What Not To Do, Part 2

The NYT re-vindicates itself as the indispensable source of news and insight with today's piece about the oil well disaster in the Gulf.  Well worth your taking the time (and who really has time, btw...??) to read it all the way through.

Key words and phrases keep popping up, recalling not just this foul-up, but many just like it.  Here, for example (---- inserted to replace the specific with the general):
          " ....a hodgepodge of oversight agencies granted exceptions to rules, allowed risks to accumulate and made a disaster more likely-----, particularly with a mix of different companies operating ----- whose interests were not always in sync."  (thanks to NYT June 5)

Sound familiar?  Of course it does.  Go back less than a year to equally well written thought pieces about the cave-in on Wall Street.  And then, who could forget one of the Bush Greatest Hits: the immediate aftermath of the Iraq war's "mission accomplished."

The scenery changes, but the plot remains the same.  Kind of like a bad relationship in which lovers are mired in a structure of miscommunication that leads from unhappiness to disaster.

What's needed?  Well, let's start with admission of error.  Yes, we need hearings and all the rigamarole which come with the territory.  But, there's a pattern here and it gets to a core issue of whether the government's approach to regulation of key sectors and activities in the economy can remain hostage to the balkanization of oversights and authorities which exactly mirrors the dysfunctional array of Congressional committees and subcommittees with stakes in the matter.  Take the Gulf---the NYT piece makes clear that the Minerals Management Service, EPA, Coast Guard, and Natl Weather Service had jurisdiction or advisory roles over offshore drilling, and also that the oil well lease and management of it was separate from the rig ownership and operations management.  

Lines of responsibility, authority, and accountability were blurred, and, even in the midst of the disaster inferno on the rig, a worker was reprimanded because she signaled for offshore help without authorization.  Hmmm.  Sounds like a Harvard Business School case study.  Hey !  It WAS an HBS case study----in fact, for two years, we had dozens and dozens of cases along these lines.  The bottom line:  a lot easier to make a business decision about whether Smucker's should have introduced a wide-mouthed ketchup bottle than to figure out the organizational structure and HR issues in a mismanaged company like General Motors.

On a public policy level, we have 21st century technologies and complexities overseen by a government stuck somewhere back in the 1970's (or earlier).

BobOnARoll has posted views about why Barack needs more businesspeople around him....and he does.  Business is still the #2 segment of the economy after consumer spending, and in three of the most critical areas tackled by the Obamites to date----the financial catastrophe, health care, and now this---one has no sense that business people had a leadership role in decision-making or management.  (Geithner and Summers are not businessmen, BTW.)

Businesses need appropriate regulation.  OK.  But there's a vast talent pool of Americans with experience and insight that could help lead the way forward, past crisis management and toward a sounder, leaner bureaucracy.  Reorganization is not sexy but could in fact be one of the critical issues of our time.

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