Lessons Learned from Fukushima – the Corporate

I started this series last week with a discussion of technical lessons learned. This week, I’ve spent at the American Nuclear Society annual meeting listening and talking about lots of different topics, but the one that reverberated most was, of course, Fukushima. ANS is a professional society dedicated to nuclear science and technology. There are many different divisions within the society and each has a different specialty and looks at the event differently.

ANS has put together a committee to start to look at Fukushima and develop more lessons learned from all of those perspectives. We will be seeing more from them over the weeks and months to come.

In the meantime, here’s some food for thought on corporate lessons. Remember from last week that these are issues within the corporation. It is about TEPCO and the people within TEPCO, not TEPCO’s relationship with the government or the international governmental relationships.

I have not commented much on TEPCO’s response to this event. Frankly, the company is still working feverishly to get the situation into a stable long term cooling state. Assessing the adequacy of their response at this point is premature in that we have not yet been able to see what was really happening, what resources were available and what support was there when. That said a couple things that appear to be somewhat in common with BP’s response to the Horizon Spill are appropriate to bring up as corporate lessons learned from both events.

1)     Crisis Communication

TEPCO seemed to have been surprised by the international attention paid to the events going on at Fukushima. In the early days, their press releases and press conferences were too infrequent and did not provide enough information. The lack of transparency drove a significant amount of speculation and fueled many rumors that are still reverberating in the media. Given the similar issues seen by BP in the aftermath of the Gulf spill, it was disappointing that TEPCO did not have a stronger crisis communication plan in place.

I do not see US utilities managing this any better. Utilities still seem to loathe talking to journalists or providing them with access and information to help educate them PRIOR to an event. The flooding in Nebraska was a non-event for the nuclear facilities. However, the utilities failed to recognize the potential concerns and provide up front information, leaving anti-nuclear PR to hold sway with ridiculous statements of news blackouts.

2)   Risk Management

It was clear that both BP and TEPCO failed to consider risk adequately. This issue is a tough one for public companies to manage. In many ways, they are driven by the need to be immediately responsive to the stockholder. Thus, understanding and responding to longer term risks is harder to justify. In both events, the risk of catastrophic failure was small, but very expensive. When the shareholder ROI horizon is a few months and the CEO’s typical tenure is a few years, looking at and mitigating risks with low likelihood, but large cost is easy to delay and ignore.

3)   Emergency Response Training

This is an area that came up in several meetings both at ANS and elsewhere. It is a dichotomy that the nuclear industry needs to examine and consider. We want reactor operators to follow the rules. We want them to do what they do strictly according to standard protocols. And yet, when the unexpected happens we want the reactor operators to be able to “land the plane on the Hudson” even if that is not in the rulebook.

This has a larger implication as well, part of next week’s “political lessons learned.”

4)   Know when to ask for help

There were some indications that TEPCO was initially reluctant to ask for help from others. Sometimes during emergencies people and companies get into a mode of looking inward to solve problems. It manifests as “it will take too much time to explain it to someone else, quicker to do it ourselves.” This is a fallacy of course, and getting outside help at crucial times is critical.

As I said at the beginning, I have been reluctant to do much “Monday morning quarterbacking” until TEPCO has brought the site to a stable cold shutdown. Allowing them to concentrate on the technical issues and get the reactors to a stable cold shutdown should be everyone’s top priority. We will revisit this area over and over as more information becomes available.

Next week – political lessons.