So Bob Dudley, the new chief executive of BP, has made his first significant decision, namely to establish a new safety division with sweeping powers to oversee and audit the company’s operations around the world. The Safety & Operational Risk function will have authority to intervene in all aspects of BP’s technical activities. The decision to establish the new function follows the Deepwater Horizon accident in the Gulf of Mexico.
The NHS could learn from this, especially at a time of major change being undertaken against the backdrop of potentially growing opposition, significant financial challenges and, if Ed Miliband’s initial comments are anything to go by, ongoing politicisation of (and therefore increasing public interest in) the NHS. All this increases the risk of organisational and system failure.
Depressing though you may find this thought, the possibility is real. Distraction by major developments such as major change programmes, and the major financial problems now beginning to emerge are two of no more than six symptoms that always precede failure. More may follow, for example performance difficulties and relationship breakdowns.
Consider the following quote: 'The failure of leadership has been a theme in almost every inquiry report. More than any other factor it is both something to be explained, and also an explanation of how things came to go wrong.' This could be from any recent inquiry but it is actually from the 1984 book, Hospitals in Trouble, about the NHS failures of the preceding twenty years.
There have been some 130 organisational, clinical and system failures in the last 40 years of the NHS; and organisational and regulatory leaders seem unable to systematically apply the learning from them. And investing failures can be expensive - between them the Alder Hey, Bristol and Shipman inquiries cost almost £40m.
But back to BP. What they’re also planning to do, and this is the really interesting bit, is to fundamentally review how the company incentivises business performance, including reward strategy, with the aim of encouraging excellence in safety and risk management. It recognises the need to intrinsically link workforce issues with ingraining quality and risk management into its culture. The first Foundation Trust that starts this challenging process should be given every support because it would fundamentally - and positively - change workforce development, management and reward.
And where does the buck stop when things go wrong? Well, as we know it’s with the chief executive, perhaps sometimes unfairly but as Bob Dudley’s predecessor eventually saw, organisational sacrifices occasionally have to be made. Perhaps he’s now reflecting on Ram Charan’s words from his research into these matters: 'Derailed CEOs tend to be smart people who worried deeply about a lot of things. They just weren’t worrying enough about the right things: execution, decisiveness, follow-through, delivering on commitments.' Or, to put it more simply, chief executives are only as good as their bottom-line and their last decision.