Looking for Disaster

On April 20 an explosion on the Deepwater Horizon, an oil drilling platform leased by British Petroleum (BP), killed eleven people and led to the biggest man-made disaster seen in the Gulf of Mexico. In addition to the explosion on the drilling platform, the Deepwater Horizon experienced a catastrophic failure of the blowout prevention valve located almost a mile below the floating platform. BP initially indicated 5,000 barrels of crude oil was leaking into the Gulf of Mexico each day. Independent experts have estimated the leak to be closer to fifteen times as much as BP’s original figure.

 

The blowout prevention valve consists of two major components: a single valve mechanism, and multiple valve activation systems. (Note: I claim no knowledge of oil drilling equipment other than what is freely available through publically accessible news sources.) In the case of the Deepwater Horizon, all efforts to activate the valve mechanism failed. Despite multiple valve activation systems the valve itself represents a single point of failure.

 

A single point of failure is never a good idea but sometimes they cannot be avoided. In the Lococo household we have adopted this philosophy: Success is how you handle plan “B”. We are not afraid to go to plan B but try to stay very aware of when we don’t have one. In a business setting the importance of plan B is frequently a function of the costs associated with the failure of plan A. In the case of the blowout prevention valve used by the Deepwater Horizon, there was no plan B.

 

There are a number of factors which may have contributed to BP’s lack of a backup for the blowout prevention valve:

 

• BP may not have been able to imagine a situation in which the valve could fail.
• Given average daily profits in excess of $50M over the past 9 quarters and a liability limit of $75M, BP may have not seen a failure of the valve to be a material threat to the company.
• The Interior Department and the Minerals Management Service had issued an environmental impact waiver during the planning of the Deepwater Horizon platform. BP may have actually believed the drilling operation posed minimal or no environmental risk.

 

There are many ways to characterize the assertion the drilling platform posed minimal or no risk to the environment but few of them are kind. Given the expanding scope of the disaster resulting from the April 20 explosion it seems unlikely BP’s liability will be limited to $75M. At the same time, it is hard to imagine BP will be held accountable for the full extent of the damages caused by the deepwater horizon disaster. Even if a dollar amount could be identified and paid by BP, the people and industries which rely on a healthy Gulf environment may not recover for many decades.

 

Lessons learned:

 

There are two issues which have implications far beyond BP and its Deepwater Horizon drilling platform: the fact the blowout prevention valve was a single point of failure, and the fact the drilling operation was considered to pose minimal or no environmental risk. 

 

We regularly encounter situations where there is a single point of failure: a critical structure or function for which there is no work around. For most people, electrical power is an example of a single point of failure. When we lose electrical service we simply find something else to do until the power comes back on. We rarely experience power outages which last very long and often find the disruption to our day a chance to pause and get a different perspective on our daily routines. In those environments where a power outage could create a dangerous situation (hospitals, air traffic control, etc.) emergency generators are often used as a backup system, eliminating the single point of failure.

 

The key to the single point of failure situation is the question “What if?” If the answer to the question “What if?” is “There may be an annoying disruption to our day.” a backup system may not be justified. If the answer to that question involves injury, death or irreparable damage; elimination of the single point of failure becomes a preferable alternative. It is likely most reasonable people would have determined the unfolding disaster in the Gulf of Mexico as a situation where a single point of failure was not an option.

 

The second relevant issue in the Deepwater Horizon disaster is the environmental waiver issued by the Interior Department and the Minerals Management Service. The waiver was granted on the assumption the Deepwater Horizon drilling operation posed minimal or no environmental risk. It is hard to imagine a definition of the word “environment” where the failure of the blowout prevention valve could be seen as having minimal or no environmental risk. The damage done by the Deepwater Horizon disaster is likely to impact all aspects of life in the region for decades to come. If the various constituencies that will be impacted by this disaster in the coming decades had knowledge of the potential impact on the natural, social and economic environment of the region it is likely the blowout prevention valve would not have been relied upon as a single point of failure.

 

Applying the lessons:

 

The disaster in the Gulf of Mexico provides us with an opportunity to look at threats we face in our personal and organizational lives. In assessing these threats it is important to look at three broad areas:

 

1. Tolerance for the risk that goes with a single point of failure.
2. Sources of threats to our organizational/personal survival.
3. Responses to threats.

 

The following questions should be reviewed by every organization on a periodic basis:

 

How long can our organization survive if a catastrophic failure (within or outside of our organization) occurs?

 

This question has operational, economic and social implications to it. If an organization cannot provide its primary services to its customer base it has three options: out-source services to another organization, shut down, or offer a different set of services. If the revenues an organization receives are interrupted significantly there will likely come a time when the organization will have to close its doors. If an organizations operations are disrupted long enough it will become irrelevant in the market place.

 

Where do single points of failure occur in our organizations?

Where do single points of failure situations occur, which have a significant impact on our organization, but are outside the organization’s immediate control?

 

These questions require us to look at the situations that could cause a significant disruption to the operation of our organization. The challenge is to look at both internal and external threats to the organization. Internal threats can be addressed through sound management practices. External threats can only be addressed through sound relationships with people and institutions outside the organization’s control.

 

Most threats have a work around, so they don’t qualify as a single point of failure. Other threats have obvious work arounds but those work arounds cannot be implemented on a timely basis. In these situations it is valuable to explore what is required to overcome the threat before the organization is significantly impacted by the threat. Still other threats have a work around but, as in the Deepwater Horizon disaster, significant irreparable damage will have been done before the problem can be addressed. In these situations the stakes are much higher and a specific focus on preventing a damaging situation must be emphasized. In all situations efforts to avoid disastrous results should be consistent with the potential impact of the threat.

 

If a catastrophic failure occurred outside of your organization, who else would be significantly impacted in a similar way? When did you talk to them last?

How does your organization, community, industry, etc. connect with those organizations which would have primary responsibility in the case of a catastrophic failure? When was the last time this cohort was face-to-face?

 

These questions help identify allies, adversaries, and advocates. In the Gulf region; environmental groups, the fishing industry and tourism industries may have little in common and may even find themselves on opposite sides on some issues. All three find their best hopes for the region currently in jeopardy as a result of the BP disaster. Both the Interior Department and the Minerals Management Service could be expected to act as arbiters of the long term goals of all parties involved but have miserably failed this expectation. The Deepwater Horizon disaster has served as a reminder of the interrelationships between the many interests in the gulf region and how easily the catastrophic failure of a single piece of equipment can jeopardize the future of the region.

 

Sources: UPI, New York Times, British Petroleum, National Public Radio

 

 

If you would like to know more about Affinity By Design, LLC go to the web page at http://www.affinitybydesign.com/

Regulation or just good accounting

As we learn more about the disaster area forming in the Gulf of Mexico it becomes apparent little thought has been given to the potential environmental and economic impact of an equipment failure of the magnitude of the one which occurred last week.

 

Thirty years ago, while still in college, I had a consulting practice called Inventory Control Services. One of the things I used to do for my clients is help them understand how much inventory to carry based on a variety of factors. The economic order quantity (EOQ) took into account such things as the time it took to replenish inventory, the cost of holding inventory, and the cost of not having inventory available to the company's customers.

 

As more and more of the Gulf region is impacted by the uncontrolled flow of oil the environmental impact is unclear but the potential economic impact is mounting. We can only speculate on why these calculations had not been made prior to the equipment failure. If they had, precautions may have been put in place which would have balanced the potential economic and environmental impact with the cost of appropriate safeguards.

 

A major obstacle to such a comprehensive calculation is it would need to take into account all of the various constituencies involved in the Gulf region. Once the calculation was made the oil drilling operation would need to be required to act in a way that protected the interests of all who would be harmed by a catastrophic equipment failure. Such a requirement could easily be seen as "regulation". it could also be seen as prudent accounting practice.

 

_____________________

http://www.AffinityByDesign.com/

 

Getting in Touch

I have a practice of taking my dog for a walk every morning. It is an opportunity for Zoe and I to get some exercise and gain a perspective on the day. Zoe finds interesting things to sniff as we walk. I prefer to read.

 

On the morning of Sunday, February 7^th I was looking forward to our walk and to continue reading “The Necessary Revolution” by Peter Senge, et.al. Unfortunately I had forgotten to recharge the battery in my book reader and didn’t have enough charge to read while on the walk.  I thought of taking my radio and listening to “Speaking of Faith” on NPR but wasn’t really interested in the topic for the program. I realized I had a need for audio stimulation while I walked. General rule: a need for diversion is an active avoidance of something. I left the house with pockets empty of electronic devices.

 

I had only walked a little way before I heard a woodpecker in a tree to the southeast of our house. I had no idea woodpeckers are in my neighborhood the first week of February. As I walked the neighborhood I was able to get a sense of where the bird was. There was only one woodpecker in the neighborhood and it seemed to be content to stay in one place. I have since heard (what I assume is) the same woodpecker on a regular basis.

 

The woodpecker acted as a reminder to be present to the sounds and smells of the neighborhood. I became very aware of how little I know of the patterns of migratory birds. I welcome them as a sign of winter’s passing and the coming of spring but I don’t know which will stay with us for the summer and which are on their way to the north. I’d guess woodpeckers are territorial but I’m not sure. I also noted a conspicuous absence of smells. The winter still had a firm hold on the ground. The smells of spring were still a ways off on February 7^th.

 

By the time Zoe and I got back to the house I had resolved to make our Sunday walk a time to give the electronics a rest. I found the direct connection to my surroundings refreshing. It was also good to let my mind wander freely rather than to focus on a pre-determined topic. I am eager to find what the spring will bring to the neighborhood and what will come of taking time to reflect without a specific focus.

 

 

Lessons learned:

 

It was by chance I found myself on a walk without an agenda. I had forgotten how much I enjoy the opportunity to be outdoors in the early hours of the day. While I am not oblivious to my surroundings when I read while walking, I clearly place a secondary importance on the feedback I receive from my surroundings when my primary focus is on reading a book.

 

I have no doubt I would have noticed the sound of a woodpecker regardless of the book I might read while walking. Whether I would have noted my surprise at the presence of a woodpecker in February is questionable. I am sure I would not have taken the time to reflect on what I miss by dividing my attention.

 

This simple experience served as a reminder of how much I miss as a result of taking my surroundings for granted and focusing my attention on more immediate priorities. The take-away from my walk of February 7^th is recognition of the value of taking a step back from normal activities for the sole purpose of unstructured reflection.

 

Applying the lessons:

 

As Zoe and I walked on Sunday, February 7^th I realized I had placed such a high priority on taking advantage of a good opportunity to enrich my life through reading I had forgotten about how enriching it can be to be present to my surroundings. Ironically, I often use my morning reading time for learning how to foster creative thinking in myself and others.

 

The most important thing is to make the time for unstructured thinking. In our personal live this is fairly simple to do. In our organizational lives we need to set aside unstructured time for brainstorming. This could be done as a part of a general meeting or in a periodic gathering dedicated to freethinking. The key is to allow enough time for ideas to come to the table. Fifteen minutes of brainstorming time at the end of a long meeting is unlikely to provide useful insights.

 

Here are a few ideas to take advantage of time set aside for letting ideas come to you and the teams you participate in:

 

-         Don’t expect a break-through idea to jump out and grab you. The best ideas often arrive unexpectedly.

-          Use thought joggers to generate ideas. “Finish the sentence…” is a good tool; the most innovative thing I’ve seen lately is… “It would be really great to”… “I’ve always wondered how”… etc.

-         Avoid judgment of the ideas generated in an open-thinking session. Focus on possibilities, not limitations.

-         Allow for unrelated and incomplete ideas. Observations of fascinating things don’t need to be directly related to the organization.

-         Make note of good ideas and allow time to develop the ideas that have promise.

 

 

_____________________

<http://www.AffinityByDesign.com/>

Connecting the Dots

On December 25, 2009, a Nigerian man traveling to Detroit from Amsterdam tried to ignite an explosive device which would have resulted in the destruction of a Northwest Airlines flight and the deaths of 278 passengers.

 

After meeting with his National Security team, the President said, “It was a failure to integrate and understand the intelligence that we already had.”  The President also said that the government had collected sufficient information to uncover the terror plot in advance but that intelligence officials had, “failed to connect those dots.” 

 

The phrase “connecting the dots” has been often repeated to describe the circumstances which allowed for this situation to present itself.  This incident has captured our attention because it is disturbing at a number of levels.  The fact a person could get on an airplane with an explosive device reminds us all of how vulnerable we are.  The fact this person was not stopped, despite the billions of dollars invested in intelligence services, is perplexing.  The fact this person was known to some within the intelligence community but that knowledge did not result in action, is inexcusable.

 

In our organizational and community life, we often find situations which reflect a “failure to connect the dots.”  While it is rare these situations present themselves as dramatically as a terrorist threat, we often find situations where the answer we seek is within our reach but seemingly unavailable to us.

 

Lessons Learned:

 

The incident of December 25^th allows us to witness an examination of a very large system and how it failed to achieve its most basic goal.  Describing the problem as a failure to connect the dots leads us to some basic questions:

 

• Which are the dots?
• What are the connections?
• What does it mean to connect the dots?

 

The phrase “connect the dots” suggests a model including resources, data and relationships.  The “dots” can be seen as the agencies and resources which collect, catalogue and interpret data.  The “connections” are the pieces of data/information flowing to and from the various agencies and resources (dots).  Under this model, data flows to the dots for interpretation and collection and flows from the dots as refined information to be used elsewhere in the system.

 

In the system described above, information flows can be either directed (pushed) out from one agency/resource to another or can be provided in response to a request for information (pull).  Regardless of whether data is pushed to or pulled from another agency/resource, it only becomes useful to the receiving organization after it is processed by the new owner of the data.

 

It seems an inevitable part of organizational life to find we continually have either too much or too little information to work with.  The challenge is to find just the right mix of routinely provided information and information available on demand.

 

Applying the Lessons:

 

The following steps will help sort out the “connecting the dots” challenge:

 

1. Identify the dots: Make a list of the organizations and resources which provide you with information.
2. Identify the connections: What information is provided by each resource?  Note whether the information provided is generated by the organization or passed along from another source.
3. Note gaps and overloads: As you make an inventory of the information you receive you are likely to find there are things you need but don’t receive.  You may also find data you receive but have no use for.
4. Depending on what you find you will likely want to adjust the information flows connecting you to other organizations and resources.

 

The steps above are an informal process for reviewing the information flowing into an organization.  There are more formal processes for reviewing how the dots connect and organizations should perform a formal data flow review on a regular basis.  Another approach to the problem of connecting the dots is to forget about the dots and focus on the people within the dots.

 

_____________________

<http://www.AffinityByDesign.com/>

 

_____________________

<http://www.AffinityByDesign.com/>

I gave blood and fell off the earth.

my wife got me into the habit of donating blood. I have donated more than seventy pints of blood over the past fifteen years. I've taken advantage of the customer service department at the blood center of Wisconsin calling me every eight weeks to set up an appointment. this is a great service and it ensures I give blood frequently.

 

I learned recently of a large gap in the blood center's customer service process. I was going to be at one of my customers offices during a blood drive so I canceled my scheduled appointment and signed up to be included in the organization's blood drive. the plan worked well for me: I streamlined my schedule and did a good deed.

 

an unintended consequence of my change in plans was I fell off the blood centers reminder rotation. I no longer get a call every eight weeks to make an appointment. I keep forgetting to give them a call. I'm sure I'll get around to it a some point but it is just not my highest priority.

 

note: after writing this post I called the blood center and made an appointment to donate. I mentioned I no longer get reminder calls.

_____________________

<http://www.AffinityByDesign.com/>

Abandon versus Adapt

I just got done listening to a story about how newspapers need to adapt to a new media environment in the 21st century. This has been an ongoing story for some time now and it really does seem like newspapers  are starting to come to grips with the challenge they face. I've also been listening to stories this week about how the United States might adapt to high speed rail systems. Europe and Japan provide good examples of how high-speed rail systems can be integrated into an overall transportation plan. These systems have not been easy to integrate nor have they been inexpensive.

 

A large part of the challenge we face in the United States is integrating rail systems into an overall transportation plan. We generally look at passenger rail as being a part of our past. Rather than a part of our present. European rail systems are integrated into an overall transportation plan which includes local mass transit and the ability to walk directly from train stations to workplaces. With few exceptions U.s. rail stations leave people without access to mass transit or sidewalks. People are able to get from city to city, but find themselves stranded without the ability to get to their final destination. The challenge we face has been referred to as "The last mile". The contrast between US and European rail systems is also the contrast between abandonment versus adaptation. European rail systems have become an integrated part of transportation systems for moving people from where they are to where they want to go. In the United States, we largely have looked at passenger rail as something that we abandoned many years ago in favor of automobiles. 

 

We have suddenly found ourselves taking another look at rail systems and looking at how they might be part of an integrated transportation system. We have become aware that the economics and environmental impact of rail transportation are much better than automobile transportation.

the challenge is to quickly move from the view railways were an old method that was obsolete almost 100 years ago to a perspective that rail systems are a part of a new integrated system that includes many pieces working together

 

The irony of this challenge is the fact that the United States has always been known as an innovator, a tech knowledge he leader and as a creative nation. The biggest challenges in integrating high-speed rail into an overall transportation plan are challenges of innovation leadership and creativity. The sad reality is we've had the luxury for many decades to simply abandon old technologies rather than adapt them into part of a new more effective or efficient system.

 

And yet, I remain confident we can meet this challenge.

 

 

<http://www.AffinityByDesign.com/>

A Night at the Big top

I recently attended a show at the Lake Superior Big Top Chautauqua (sha-ta-qwa).  I’ve listened to the “Tent Show Radio” broadcasts for years and was happy to win a pair of tickets to a show.  From the names “Big Top Chautauqua” and “Tent Show Radio” I knew we would be watching a show under a tent but that was the limit of our expectations.  What we found was an interesting mix of simplicity and sophistication.

 

The sign for Big Top Chautauqua (BTC) directed us west off of Highway 13.  After a short ride we found ourselves in a queue of cars being directed by a person along the side of the road.  We told the person we needed to pick up tickets at “Will Call”.  We were directed into the left lane and expected we would end up at a building with a ticket window.  A ways further we were stopped by another person along the way.  When I asked for directions to Will Call the woman responded “That’s me.”.  The ticket window turned out to be a person with a clipboard and a stack of envelopes.  We were then directed to a parking spot by a person in an orange vest.

 

With the exception of the restrooms, everything we came in contact with at BTC was under tents.  The people we encountered were the kind of warm and friendly types who evoke images of people who had, in years gone by, uttered the words “You know what would be cool…” while sitting around a campfire.  While this may be true, BTC is a much more sophisticated operation than the simple surroundings and friendly smiles would suggest.

 

Taking a closer look at the BTC grounds shows clearly defined business processes and practices.  There are separate tens for food, merchandise and raffle sales.  The complimentary tickets we received were electronically generated and showed a price of $0.00.  BTC operates a shuttle service to bring guests in from nearby communities.  Additionally, BTC produces a syndicated radio program, does educational outreach programs and has a touring company.

 

In 2000 BTC encountered a major problem:  an electrical short caused their tent to burn down in the middle of the night.  Many organizations never recover from such a catastrophic event.  Fortunately BTC had seen how disastrous it would be to lose their tent.  They only missed one performance before the backup tent was in place.

 

For mor information about BTC go to http://bigtop.org/

 

Lessons learned:

 

At first glance big top Chautauqua appears to be an unorganized collection of sophisticated and unsophisticated processes, practices and technologies.  A business analyst looking for some consulting dollars might recommend an intense (and costly) process to “standardize the organization’s business processes and raise them up to include the best technologies available”. 

 

A closer look at BTC suggests things are as sophisticated as they need to be, but not more.  Aside from the technology of sound systems, there is little BTC could do to dramatically improve on the audience experience.  A multi-million dollar investment in buildings for ticket sales, food service and merchandise would add little to the overall audience experience.

 

On the other hand, BTC has an organizational infrastructure reflecting thoughtful leadership with a sophisticated business sense.  While the big blue tent is the iconic image of BTC they have developed multiple income streams and distribution channels.  The decision to have a backup tent was preceded by some version of the question, “What would be the impact of losing our tent?”  The fact BTC tracks paid and complimentary tickets indicates they have the ability to analyze revenues and expenses by audience, seats and paid admissions.

 

 

 

Applying the lessons:

 

The Lake Superior Big Top Chautauqua employs a mix of business practices and technologies ranging from simple to sophisticated.  This mix provides a reminder “best practice” and “best technology” are subjective terms.  Here are a few simple questions to assist you in looking at how sophisticated your organizational environment needs to be:

 

 

1. Start by clearly describing what is to be accomplished by the business process being examined.  At BTC all they were trying to do is put “on hold” tickets in the hands of people coming down the driveway.
2. If the process is not working as expected, clearly describe the problem.  Avoid describing a solution to an undefined problem.
3. Identify the impact the problem has on the organization.  Does the problem consume staff time when they could be doing something more productive?  Does it cause bottlenecks in the flow of your organization?  Does it cause customers to go somewhere else?  Every problem can be associated with a cost to the organization.  The cost of the problem should exceed the budget for its solution.
4. Identify the absolute minimum change required to solve the problem described above.  Can this solution apply in all situations? It’s best to avoid elaborate exception processing:  if a solution can’t be integrated into the standard process it’s too complicated.

 

The book Think and Grow Rich tells of a sales manager who told his salesmen (Yes, Napoli and Hill was smart but not enlightened.) to put twenty-five beans in their left pocket at the start of the day.  When they made a sales contact they were to move one bean to the right pocket.  Their sales day was over when they had emptied their left pocket.  Some might say a Smartphone connected to a centralized database would be a better tracking process but it’s unlikely the salesperson would have time to make twenty-five contacts in a day if they were constantly fiddling with their phone.

 

 

<http://www.AffinityByDesign.com/>

<http://www.DanLococo.com/>