Oil Leak- dealing with risk in alliances: BP,Halliburton,Transocean and now Cameron International


No prizes for guessing that BP,Halliburton and Transocean have worked together as  alliance partners repeatedly over time and now Cameron International as the blowout preventer valve supplier is being blamed .

And guess what- the leaking offshore oil well has the alliance in tatters, at least at the Senate hearing.

There is a whole  bunch of work I am involved in the set up of new outsourcing alliances so that intellectual property is better managed, innovation is generated and other positive outcomes come about.In recessionary times avoiding negative outcomes seem even more important.When alliances are involved and things go wrong ( as in the leaking oil well) one must go back to understanding fundamentals like:

  • Repeated partnering involves work and co-ordination at all levels. People learn to work together,understand each others routines and generally are able to deliver as one team.
  • However, responsibilities of each alliance partner is governed by contracts and not by one boss-as in a case where all the work is done “in-house” with no contractors.
  • Better contract review, supplier performance review and less display of buyer power is critical during these processes.More the supplier feels empowered, the more they’ll want to speak up- in time.

The irony of the present oil-leak situation is that long term partners at the top-most levels are vehemently blaming each other on TV. Perhaps, businesses will learn to manage alliances better, going forward.

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