Simon Fowler's Blog

rLiving Day 12: Oily Subcontractors (Purpose/Continuity)

Posted by Simon on May 12, 2010

For a moment there, it looked like IBM had planned to reduce its employee workforce by 75% by 2017, but that turned out to be false. It would have been a great factoid for today given that I also know that Accenture planned to add 50,000 employees this year (which is true, also because I heard from their CLO). The contrasting strategies of employee vs. subcontractor between these two massive consulting companies would have been a nice little talking point.

So I’ll have to settle for BP and ExxonMobil instead.

Furious fingers are pointing at BP for that hideous gloop infecting the Gulf of Mexico right now. One jabbing finger is at the fact that BP let go ALL of its experts and engineers and entrusted subcontractors. This, according to Tom Bower, author of Oil: Money, Politics and Power in the 21st Centrury (on Here and Now– on my local National Public Radio station, WBUR this lunchtime).

Under the leadership of John Brown, who took over as CEO in the 80’s, BP went from a money-losing company to No. 2 in the world. How? “More for less!”. As Bower put it, “let’s get 100% by paying 90%”; subcontracting caused profits to skyrocket.

Relational Proximity Dimension #2 is Continuity: A relationship is formed and strengthened by the amount, frequency and span of time we are together. It includes a sense of shared history, and an anticipation of the future.

Relational Proximity Dimension #5 is Purpose/Commonality: Our sense of connectedness and relationship is greater to the degree we have things in common or share a common purpose or identity. A good relationship has a direction to it, something that is common between the members that holds it together.

This story is ostensibly about trust, but I propose that trust comes, in part, from a sense of common purpose, a sense that the parties involved have a stake in something together. Trust also comes from an expectation of future partnership. Is there enough common purpose (beyond $$) with your subcontractors, and enough shared vision and stake in the future, to enable trust, accountability and a fruitful, creative relationship?

The two main subcontractors involved in this oil spill are Transocean (responsible for the rig and drilling) and Halliburton (the cement casing). The argument appears to be what BP knew or told Halliburton about drilling depth, which makes a difference to the type of concrete used. [Did you know they’re drilling 6 miles down?!]. The argument is also increasingly turning against regulators.

Who’s watching? Interestingly, both BP and Exxonmobil use these subcontractors. A difference is that ExxonMobil retain an army of experts and engineers to ‘second-guess’ (as Bower puts it) everything Transocean and Halliburton do. As I would interpret that; they double-, triple-check everything the subcontractors do, therefore maintaining their standards and maintaining accountability. BP, however, leave the subcontractors to it. In other words, they trust them. Or you could say, the subcontractors trusted BP for the right information. And what of the regulators? Who do they trust? Who do we trust?

Comparing subcontractor relationships I’m curious to know what the relationship is like between ExxonMobil’s engineers and the subcontractor engineers, and what kind of productivity and safety performance they achieve. People scream for regulators (while they also scream for infinite freedom for themselves), but potentially there’s a perfect relationship there, working fine without the need for underpaid, under-qualified (according to Bower) regulators. A comparison between BP’s subcontractor relationships and ExxonMobil’s would be illuminating, I think: shared ownership? shared risk? not just shared profit? Similarly with continuity: is there a future-vision? Not just asking if the contract will be renewed, but do they have a creative vision for the future together?

Anger at “BP” or “Regulators” is understandable even though they’re made of people (or, People, who surely are to be trusted!?). Anger against subcontractors in general is less understandable, unless you’re a cynic. But I think a relational proximity analysis between entities involved in the creative, productive work, would be reveal more hopeful path of trust AND accountability than just blame and more external regulation.

What do you think? No, really, go on. Tell me. Don’t be shy! 🙂


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