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BP's Gulf Oil Spill: The Perils of Cutting Corners

Competition from Japan brought a new management philosophy to American industry: Total Quality Management (TQM). It saved the U.S. semiconductor industry and, in time, its automotive industry, as well. Can the same principals prevent catastrophic oil spills? Absolutely.

Back in the 60s, products that were made in Japan were perceived as cheap and prone to failure. Japanese industrial leaders set out to change that perception by learning statistical process control and quality control from American consultants Joseph Juran and William Deming.

The resultant transformation stunned American industry as Japanese companies gained market share and leadership positions in industries like semiconductors and automobiles. U.S. semiconductor makers got the wakeup call first and, in the 1980s, implemented TQM programs, ironically based on the teachings of those same American consultants.

The U.S automotive industry was much slower to react, but eventually got the message.

It's unfortunate that this remarkable revolution, brought about by competition, never took place in the oil industry. And now, courtesy of oil giant BP, the gulf coast, like Alaska's Prince William Sound after the Exxon Valdez oil spill, will pay a heavy price. Where's Japan when you need it?

Now, you might think there's a world of difference between improving defect rates in semiconductor chips and eliminating catastrophe due to some combination of technical, human, and regulatory failure, but there isn't. They're exactly the same thing.

In the 80s, every engineer at Texas Instruments, including me, spent an entire week offsite and immersed in quality training. That's where we learned that virtually every defect and every error - technical, human, or otherwise - is a management problem. And we learned how to reduce them to the point of statistical elimination.

That's why the computer you're reading this post on, with dozens of semiconductor devices with tens of millions of transistors and interconnections that required hundreds of processing steps to manufacture, operates flawlessly. Except for the software, that is.

At Texas Instruments, we learned a new slogan that was plastered all over the walls at every facility: Do It Right the First Time. As the saying goes, there's never enough time (or money) to do it right, but there's always plenty of time (and money) to do it over.

The transformation cost Texas Instruments a fortune but ultimately saved its core business. The same thing is true of other chip makers like Intel and any automotive company that's still in business. And if I had to boil it down to a macroscopic sound bite, it comes down to leadership deciding that cutting corners is not acceptable.

BP's gulf oil disaster may have been caused by a hydraulic leak or some other problem with the "blowout preventer," poor pipe integrity, buying off regulators, or some combination of these or other issues. But in the end, it comes down to BP's leadership failing to make a commitment to stop cutting corners. That management philosophy propagates and spreads throughout the organization to each and every manager, employee, and subcontractor.

If you could see flawed management philosophy propagate, it might look just like a pitch black plume of oil that creeps into every crevice and sticks to everything. When will executives learn that it's far less costly to stop cutting corners than to clean up the mess?

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