Things go wrong. One of the reasons so many small businesses—and large, clumsy ones too—fail is because they don’t plan for this patent reality. Owners and managers too often lack the foresight (and/or resources) to prepare for accidents, economic shifts, innovations and other zigs in Prosperity Road.
A big, rich company like BP, on the other hand, expects zigs. Its forecasts include zags, too, and the company is built to prosper despite them. The week’s multi-billion dollar settlement for the Deepwater explosion that spewed oil into the Gulf of Mexico for months (directly affecting five states) was, in many ways, planned for. BP is fiscally happier, of course, when nothing breaks. Zigs are damaging not only to quarterly earnings—lost production in addition to the settlements—but also to reputation, an essential corporate asset whose diminishment is less easily factored into the bottom line. (Congressional pushback against drilling and increased lobbying costs being only part of a damaged reputation’s offspring.) Nevertheless, despite whatever steps and improvements the company makes to guard against further problems, BP remains ready, indeed has plans for, the next disaster. It’s the only party that can’t afford to pretend one won’t occur.