Issues with General System Management
Write an Essay on Deepwater Horizon.
The essay takes into consideration the project management issues that resulted in the Gulf Oil disaster that considerably affected the future of offshore drilling. There are different aspects of project management that is needed to be considered in every project. The essay will evaluate the importance of some of the basic project management principles, which includes general system management, efficiency in the organizational structure forms and culture, risk management in the project, alignment with the portfolio, business value, portfolio management and organizational maturity (Teller Kock & Gemünden, 2014). The Deepwater horizon oil spill is an engineering disaster that began in April 2010. The deepwater horizon rig is owned and operated by the offshore oil drilling company Transocean. The disaster took the life of 11 workers. The disaster was mainly caused in due to the lack of supervision of the offshore drilling. Although the organization had involved advanced technologies in their project, the disaster occurred simply due to lack of proper supervision and appropriate risk management which was necessary in this case (Kerzner & Kerzner, 2017). The disaster was unforeseen as everyone involved with the project was quite satisfied. The disaster or the explosions were mainly caused due to a flawed well plan as the well plan did not include enough cement between the production casing and the protection casing which was necessary (DEEP WATER Report to National commission, 2018). This therefore proves to be a case of improper project management, improper supervision and testing of the project works. The Macondo disaster proves to be a case of failure of the management as the management breakdown has affected a number of operational aspects of designing and drilling a well. The different project management aspects that went wrong with this case are discussed in the following paragraphs.
General system management is essential in managing the team and the different project management aspects. The operational issues resulted in the disaster that took lives of 11 workers and spilling oil into the water was mainly because of the management issues that resulted in the operational aspects of designing and drilling the well. This is because a better management would have properly identified the risks at Macondo and prevented the technical failures that resulted in the blowout. System management is a very important aspect of management of any project. There are a number of system management problem associated with the case that include ineffective leadership, ineffective communication, failure in providing timely procedures and poor training and supervision of the employees. These are the major system management that were associated with the case that resulted in the disaster along with the failure of the team and the management in properly analyzing and appreciating a risk (Jeston, 2014). The general system management is considered as one of the important aspects of project management as it provides the project team members with a practical knowledge of how to address any issues or challenges associated with a particular project. Lack of guidance and supervision resulted in the non identification of the important aspect of the oil well that resulted in the disaster.
Importance of proper Organizational Structure
The issues in the management of the team mainly arise as a result of improper organizational structure. One of the important aspects of the BP’s operating model is proper leadership. An operational leader is expected to create and support clear delegation and accountability, which was not the case with the Deepwater Horizon Spill case. It is often observed that there were active conflicts between the managers of the organization about the critical decisions. The team that was responsible for the key decision at Macondo did not often appeared to be acting with a consistent and shared purpose (Macondo, 2011). The blame of the oil spill was mostly on BP as it had announced that it had successfully plugged the oil leak using a tight cap. The continuous oil leak was to be stopped and the project aimed at stopping the oil leak. However, due to the lack of proper supervision and testing, a flawed well plan was implemented that resulted in the explosion and the disaster. As a result of the improper leadership in the organization, the engineering and the operations were reorganized (Yukl, 2013). This had resulted in the communication gap and improper project management that resulted in the disaster.
Risk management is an important aspect of any project and proper risk management in a project is essential in order to address the different problems associated with a particular project. The process of risk management involves identification, evaluation and the prioritization of the risks so that the identified risk does not have a large effect on the project or organization. One of the significant facts associated with the Deepwater Horizon case is that the explosion mainly caused due to a flawed well plan (Loosemore et al., 2012). According to the project management body of knowledge, risk management is one of the ten major areas about project manager should acquire a complete knowledge (Rose, 2013). Along with improper project supervision, lack of proper risk management in the project has resulted in the disaster. The British Petroleum should have insisted on performing a proper risk management before the implementation of the project as it was needed to identify the risks associated with the system. The identification of the risks in the early stages of project implementation is essential in order to mitigate the risk. The risk management process further involves proper supervision of the risk so that the risk does not return in the project. The inability of the team of BP in identifying the problem associated with the design plan proves that the project team did not perform the proper risk management process that resulted in the serious mishap. Proper Risk management is important for any project or organization as without considering the risks associated with a project, accurate implementation of the project is not possible. It is the responsibility of the team leader or the project manager to perform a proper risk management of the project. Every cement jobs inevitably involve some sorts of uncertainty and this particular job of Macondo was quite tricky as well. It was risky mainly because of the equivalent circulating density concerns. Prior to this project, BP did not perform a full bottom cement job. Therefore, proper risk management was essential and it could have therefore prevented the mishap or could have reduced its effects.
Importance of Risk Management
Another significant project management issues that added to the cause of the mishap includes in adequate communication among the team members and excessive compartmentalization of the information. The issue with the well plan was not identified or addressed mainly because of the communication gap. It has been observed that the individuals who were taking decisions regarding one aspect of the well might not always communicate any critical information to the others (Burke, 2013). Therefore, even if the issue with the well plan was identified by the onshore engineers, or the other members of the team, it was quite possible that the issue was not communicated to the team members.
In order to mitigate similar issues associated with project management, it is very necessary for the project team to have a proper knowledge about the portfolio alignment. The portfolio alignment is an approach that helps in achieving a particular goal by selecting, prioritizing and managing the different programs associated with a project. A proper communication among the team members is necessary for proper collaboration of a work that could not be done in this case and that resulted in the disaster.
Portfolio management is important to make proper decisions as the project progress and the issues associated with a project are reflected in a portfolio. The issues associated with improper communication could have been addressed in this case if proper portfolios are managed. The case study therefore provides an example of improper system thinking and therefore a holistic solution to the problems could not be found in this case.
Information compartmentalization is a proof of improper communication among the team members. The important information associated with the drilling at Macondo was compartmentalized between the companies that resulted in the disaster (Walker, 2015). It was later found out the BP onshore engineering team was aware of the risk that was associated with the Macondo job but failed to communicate the same to the team members as and their own employees due to an improper communication plan.
BP showed a lack of proper portfolio alignment. The portfolio management process cycle mainly consists of five phases, which are, establish, evaluate, prioritize, select and manage. The portfolio management process cycle is represented in the following picture-
Figure 1: Representing Portfolio Management Process Cycle
(Source: Effective Project Management, 2018)
The engineers of BP although could identify the issues associated with the cement job, they could not prioritize and plan the work effectively that resulted in the explosion and oil spill. This proves to be an example of improper system thinking and system engineering.
Improper Communication: need of Portfolio alignment
As discussed earlier, there were a number of risks associated with the project that was needed to be addressed (Heagney, 2016). The onshore engineering team of BP had a proper knowledge about the issues but failed to communicate it among the team members mainly due to an improper organizational structure and an improper communication plan. The explosion occurred mainly due to the inefficiency and issues in the cap that was designed in order to prevent the oil leakage. The project team members should have understood that there are certain levels of uncertainty associate with any cementing jobs. The equivalent circulating density concerns added to the risks associated with a cementing job. Since BP did not perform a full bottom up prior to the cement job, BP made use of foam cement. It pumped a small amount of cement than the normal and circulated it at much slower flow rates than the normal. BP should not have pumped the job knowing that there is difficulty in converting the float equipments. Another mistake that BP did was to rely heavily on its difficult cement job soon after pumping it by making use of the temporary abundant procedures. All these steps that were undertaken by the BP team was quite and despite of having a proper knowledge about the associated cementing related risks, the BP team did not even worked on the negative pressure test. The need of risk assessment was quite high in this project which was not performed in time and it resulted in the serious accident. The fact that the BP’s onshore team had a proper knowledge about the risks, it is evident that the Bp’s onshore team could have easily alerted the well site leaders and the crew about the most likely cement failure and its associated risks (Hillson & Murray-Webster, 2017). The failure of doing so proves to be an example of ineffective management and improper execution of the project (Skogdalen & Vinnem, 2012).
The business value of BP was tarnished to a large extent as a result of the risk mainly because the team did not consider the heath and well being of the workers working in the firm. The business value of an organization emphasizes on working honestly in an organization and it is the responsibility of the team members of a project to put the safety issues of the workers in the list of priorities, which BP clearly failed to achieve. This is the reason why the business value of BP was reduced as a result of the project failure.
Conclusion
The lack of proper project management was mainly a result of the inadequate guidance to the staffs and the onshore team. The BP never provided any adequate guidance to the staffs on when they should consult onshore personnel. The improper communication plan mainly resulted in increase in the issues associated with the project. Furthermore, the communication plan did not address the negative pressures or the criteria that might require a calling shore. Improper leadership was the reason of improper guidance and it shows and improper organizational maturity.
Improper organizational maturity resulted in improper management of the complex engineering system that was associated with the oil well. The oil case of BP therefore provides an example of improper system engineering.
Conclusion
The report gives an idea of the different project management aspects that went wrong in the Deep Water case risking the lives of the a number of workers. The disaster caused mainly because of a flaw in the well plan. The plan did not include enough cement in between the production casing and protection casing resulting in the disaster. The essay elaborates the different project management issues associated with this case and evaluates what went wrong with the project. The issues with general management, organizational structure and leadership are evaluated in the essay. It is analyzed that improper risk management mainly resulted in the mishap as risk management is essential for any project. The onshore team could identify the risks but could not communicate due to the improper communication plan that added to cause of the disaster.
References
Burke, R. (2013). Project management: planning and control techniques. New Jersey, USA.
DEEP WATER Report to National commission, (2018). Retrieved from https://www.gpo.gov/fdsys/pkg/GPO-OILCOMMISSION/pdf/GPO-OILCOMMISSION.pdf
Effective Project Management: Traditional, Agile, Extreme, Sixth Edition. (2018). Retrieved from https://www.safaribooksonline.com/library/view/effective-project-management/9781118016190/ch014-sec005.html
Heagney, J. (2016). Fundamentals of project management. AMACOM Div American Mgmt Assn.
Hillson, D., & Murray-Webster, R. (2017). Understanding and managing risk attitude. Routledge.
Jeston, J. (2014). Business process management. Routledge.
Kerzner, H., & Kerzner, H. R. (2017). Project management: a systems approach to planning, scheduling, and controlling. John Wiley & Sons.
Loosemore, M., Raftery, J., Reilly, C., & Higgon, D. (2012). Risk management in projects. Routledge.
Macondo: The Gulf Oil Disaster, Chief Counsel’s Report, 2011. (2018). Retrieved from https://books.google.co.in/books?id=NIYvyGWqoAcC&pg=PA225&lpg=PA225&dq=Chp+5+Overarching+Failures+of+Management&source=bl&ots=56s3A1J_4Q&sig=E5i36zbY6aunPdYKwJ-dLBw2Pls&hl=en&sa=X&ved=0ahUKEwj2qKWokKjbAhVHXSsKHcpHDjgQ6AEIKDAA#v=onepage&q=Chp%205%20Overarching%20Failures%20of%20Management&f=false
Rose, K. H. (2013). A Guide to the Project Management Body of Knowledge (PMBOK® Guide)—Fifth Edition. Project management journal, 44(3).
Skogdalen, J. E., & Vinnem, J. E. (2012). Quantitative risk analysis of oil and gas drilling, using Deepwater Horizon as case study. Reliability Engineering & System Safety, 100, 58-66.
Teller, J., Kock, A., & Gemünden, H. G. (2014). Risk management in project portfolios is more than managing project risks: A contingency perspective on risk management. Project Management Journal, 45(4), 67-80.
Walker, A. (2015). Project management in construction. John Wiley & Sons.
Yukl, G. A. (2013). Leadership in organizations. Pearson Education India
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