This post is purely speculative as I have no inside knowledge of what's gone on at BP. However, I can't get this out of my mind. Here's the background, from an unpublished piece that Jeff Stamps and I have written.
When Tony Hayward took over at BP in 2007, he called for a widely reported massive reorganization (one of many links to his announcement). He said his company was determined “to improve performance by simplifying how the company is structured and run.” While emphasizing that BP had the right strategy and proper resources to execute against it, he described BP’s problem this way: “…we are not consistent and our organization has grown too complex.”
To remedy the situation, BP planned to adopt more standardized procedures and reduce the number of management layers from eleven to seven.” What major benefit did Hayward expect to gain from redesigning the organization? “… [T]he revenue boost expected from greatly improved operational efficiency over the longer term.”
No one would argue that simplification is indeed more efficient, but here’s the rub: It’s not necessarily more effective.
Reorganization can bring real benefits: Better organizational design offers enormous competitive advantage. Organization, after all, leverages all other advantages. But did BP engage this challenge with the right frame of mind? Certainly, the study Hayward commissioned that identified “7,500 ‘operational interfaces’–that is, potential management blockages” was on the right track. Gaining organizational benefits of the type BP’s chief desires will not be easy for his or for any other enterprise. Nor is it easy to remove four levels in an organization of roughly 100,000 people. Based on our research, it might even be suicidal.
Dogmatic global mandates, like one that says an organization must have no more than seven levels or that all managers should have the identical number of people reporting to them, ignore other realities of business life. The number of levels your organization needs, or the optimal reporting span of your leaders, our research shows, is likely a function of what those units are actually doing.
So...stepping out of that piece, I have to ask this question: was the flattening that Hayward undertook in part responsible for safety oversight with the contractor (Transocean) running the Deepwater Horizon rig? Was the safety organization at BP flattened to the point that key connectors were eliminated, perhaps those farther down in the organization with day-to-day oversight?
Do you think this is possible?
