Monday, January 7, 2013

Check the culture before you accept that job

We advise our MSBA graduates to look beyond compensation and benefits at the core of a potential employer.  You can often discern important things about a company from 3rd party and employee blogs and chat rooms.  The internet is full of stories, the good, the bad and the ugly, about companies and their leaders.  Students should ask themselves, is this the kind of company I would be proud to work for.  Case in point:

Deepwater Horizon ablaze
I was saddened recently to see two BP rig supervisors charged with manslaughter in the horrible BP Deepwater Horizon tragedy from 2010.  What a cowardly act on the part of BP in my view to allow this as part of the negotiated settlement with the government.  Did these two veteran oilmen ignore some important red flags and procedures?  Apparently so and they share in the responsibility for the tragedy; but they do not deserve to be the sole scapegoats.

I've written before about the importance of culture in an organization and here is a prime example of the wrong kind of culture.  Had this been an isolated incident, perhaps we could focus blame on rogue employees that took unauthorized shortcuts that led to a disaster.  But there existed then (and hopefully not today) a corporate culture of putting the bottom line ahead of safety and concern for the environment and the community.    

Texas City refinery ablaze
Anyone that follows the oil industry is all too aware of BP's horrible safety and environmental record.  In March 2005 an explosion at BP's Texas City refinery outside of Houston, Tx. claimed the lives of 15 workers and injured 170.  BP was charged with criminal violations and cited by the Occupational Safety and Health Administration for over 300 safety violations.  They paid the then-largest fine ever of $21M. 
Fouling the tundra

In 2006, spills along the Alaska Pipeline were traced to shoddy maintenance practices and shortcuts.  While the pipeline is owned by a consortium of companies, BP is the operator and is responsible for inspecting, maintaining and repairing the line to preserve the pristine environment of the tundra. BP pled guilty to negligence and was fined $20M.  Once again, expense cuts and concern about profitability over safety and integrity surfaced. 

Is this just rotten bad luck or do they simply hire the wrong people to be in charge of multi billion dollar assets, the environment and most importantly, peoples lives?  No, it is traced to the culture of the company and its leaders over a long period of time.  It is said that employees do what is measured and clearly expense savings and profitability are emphasized at BP.  

At ExxonMobil, where I worked for 34 years, every management meeting began with a report and discussion of safety and environmental incidents and company policy violations.  It was only after thoroughly vetting these topics that a discussion on sales and profitability could follow. 

As I have written before, a company's culture starts at the top and the leadership at BP is every bit as much to blame as the workers that were doing their bidding.  But they are not charged with a crime; only the workers that succumbed to a bad culture.

Stewart McHie
Director, MS in Business Analysis

No comments:

Post a Comment