Preventing a problem vs. solving a problem; BP’s oil spill costs skyrocket to $9.5B

See the Fox article here or read below.

That’s right, $9.5B, BILLION and a $20 billion victims fund.

Does anyone believe it was less expensive, more effective, and more beneficial to BP’s bottom line (not to mention the men who died and the environmental impact) to spend all this money after having this problem rather than working beforehand to prevent it?

When the impact of a problem is very high (like this one), even if the probability of it occurring is relatively low, we need to spend time considering what we will do to avoid the problem.  We also need good contingent actions ready to roll immediately if we should have the problem anyway.

Did BP consider what could go wrong?

Did the explosion and subsequent oil leak show up on their potential problem list?

Did they effectively weigh the risks and rewards?

Did they just hope for the best and focus on short term results and management bonuses?

We can only hope that BP, the oil industry, politicians, and everyone else involved learn from this disaster.

What are you doing to avoid disasters in your business, your career, and your life?

Give us a call, we can help.

John Schneyer, Boca Consultants

Fox news article:
BP’s oil spill costs skyrocket to $9.5B

Updated: Monday, 20 Sep 2010, 7:42 AM EDT
Published : Monday, 20 Sep 2010, 7:41 AM EDT

NewsCore – The cost of the cleanup of BP’s Gulf of Mexico oil spill hit $9.5 billion, the company said Monday.

As the oil giant announced the capping of the well was complete , the final cost of the spill response became clear.

“The cost of the response to Sept. 17 amounts to approximately $9.5 billion, including the cost of the spill response, containment, relief well drilling, static kill and cementing, grants to the Gulf states, claims paid and federal costs,” the statement said.

BP also reaffirmed its creation of a $20 billion fund to pay out victims of the oil spill.

More than four million barrels of oil spilled into the Gulf of Mexico after the Deepwater Horizon rig exploded April 20, killing 11 workers. Oil flowed freely into the sea until July 15, when temporary caps were put in place.

Final capping work was completed Friday, with confirmation of the kill’s success announced Sunday.

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