Back in the 1970s, there was a very popular show called "Happy Days," starring Ron Howard and Henry Winkler, who played Arthur "Fonzie" Fonzarelli. Five years into the series, an episode aired in which Fonzie is shown improbably water skiing and jumping a shark to show his bravery. A few years later, the phrase "Jumping the Shark" came to mean that point in a television series where the program had reached its peak, and it was going to be all downhill from then on until it got canceled. I think risk management in the oil industry has reached that moment, except in this case, I think the appropriate phrase is "Jumping the Walrus." According to BP PLC's 582-page 2009 spill response plan for the Gulf of Mexico, walruses along with sea otters, sea lions, and seals are among the "sensitive biological resources" that could be harmed by an oil discharge from its operations in the Gulf. The only problem is that walruses, sea otters, sea lions, and seals don't happen to live in the Gulf of Mexico, and haven't for a considerable period of time -- like millions of years. The spill plan also lists a Japanese home shopping site as one of BP's primary providers of equipment for containing a spill, a dead professor as one of its wildlife experts to consult with in the event of spill, and other outrageous gaffes. BP was not alone in worrying about walruses. Chevron, ConocoPhillips, and ExxonMobil's oil discharge response plans in the Gulf of Mexico also listed those poor walruses as potential victims of a spill. The US government must have been worried about those walruses, too, since those in government accountable for reviewing and approving the oil companies' response plans didn't say a word about them. Maybe the US government officials at the Minerals Management Service decided that, even though walruses, sea otters, sea lions, and seals didn't currently live in the Gulf of Mexico, they might someday. Better to be safe than sorry, right? Well, the reality, of course, is that the oil companies outsourced the writing of their oil response plans to a consulting group, and didn't bother to read the plans to see if they made any sense. What worries me more is that the possibility that those responsible for risk management at the oil companies (and US government) did read these plans and didn't catch any of the errors. If that is the case, then we may have a deeply disturbing case of the Dunning-Kruger effect at work: the incompetence of oil company and government risk managers masked their ability to recognize their own incompetence at managing risk. 1 When drilling oil wells at ocean depths of 5,000 feet or more, risk-management competence is something I really want those oil companies and government officials that oversee them to possess. It is pretty clear that oil spill risk management wasn't taken seriously at all by BP, or by most of the other major oil companies drilling in the Gulf. In congressional hearings, oil industry officials admitted that the industry is poorly equipped to handle oil spills of any size in the Gulf, and that is why the industry tries to prevent spills from happening. The industry also viewed its oil-well blowout preventers as foolproof safety mechanisms, even though they fail regularly. However, the industry officials also admitted that less than 0.1% of corporate profits are spent on improving offshore drilling technologies, even as the risks of drilling offshore have increased significantly over the past decade. Oil spill risk management was not taken seriously by the US government, either. Even though the MMS has sponsored many, many studies into the risks of offshore drilling, no one seems to have bothered to read and then act on them. Like what used to be said about software reuse libraries, risk management reports were checked in but never checked out. We can only hope that risk management will be taken a wee bit more seriously in the future by both oil companies and the US government when it comes to drilling in deep water or other sensitive environmental areas, including those where walruses may actually live. However, I don't doubt for one minute that other industries pay other consulting companies to write their risk management reports as well -- and don't bother to read them until after something goes terribly wrong. I see it all the time on IT projects, for example. So, I would like to propose that in the future, whenever risk management is incompetently performed, done just to meet some requirement, isn't taken seriously, or is plain lackadaisical, we describe it with the phrase, "Jumping the Walrus." Maybe that will remind those involved that the consequences and public ridicule are likely awaiting them next. 1. The Dunning-Kruger Effect basically says that incompetent people are too incompetent to realize they are incompetent. See: Kruger, Justin, and David Dunning. " Unskilled and unaware of it: How difficulties in recognizing one's own incompetence lead to inflated self-assessments," Journal of Personality and Social Psychology, Vol. 77(6), Dec 1999, 1121-1134. Appeared in the 1 July 2010 Cutter Consortium Enterprise Risk Management & Governance (ERM&G) E-Mail Advisor - used with permission. Robert Charette Link to source: http://seclists.org/risks/2010/q3/0