Organisational Culture and Corporate Governance: Titanic, Costa Concordia and Grenfell Tower Fire: Lessons that save lives (part 2 of 3 – Costa Concordia disaster)
This case study – Costa Concordia, is part 2 of 3 articles about improving corporate and public governance. Part 1 describes all the crucial events and decisions leading to Titanic’s sinking and part 2 and 3 show the similarities with the Costa Concordia disaster and the Grenfell Tower fire in London. We also introduce the concepts of Materiality Analysis and Visionary Governance® as crucial components for improving decision making, reducing risk and anticipating future events. The case studies are part of our Smarter Culture® Workshop to design better corporate cultures and organisations.
THE COSTA CONCORDIA DISASTER
Fast forward 100 Years into the future from Titanic’s sinking in 1912 to the Costa Concordia disaster in 2012 and we can see similarities with Titanic’s materiality analysis and failures. We will be able to see how a ship, with all available modern technologies on board for navigating at sea, will commit governance mistakes similar to the events that took place abord RMS Titanic.
MATERIAL ISSUES AT COSTA CONCORDIA
1. Proper Corporate Guidelines & Clear regulations for Sail-by-salutes.
2. Passenger Safety.
3. Effective on board crew policies and communications.
4. Proper international standards for ship safety and drills.
For a clear explanation on the concepts of MATERIALITY and MATERIAL ISSUES go to Part 1 Titanic Case Study.
A. MATERIALITY POSITION ON COSTA CONCORDIA THAT LED TO DISASTER
B. MATERIALITY POSITION ON COSTA CONCORDIA THAT WOULD HAVE SAVED THE SHIP AND PASSENGERS
MATERIAL ISSUES ON THE TRIP
1. Proper Corporate Guidelines & Clear regulations for Sail by salutes.
Captain Schettino of Costa Concordia deviated from its planned route, turned off the alarm system for the ship’s computer navigation system and sailed close to the island of El Giglio, hitting the rocks at 9.44pm at a speed of 16 knots (18 miles an hour). Minutes later the ship loses all power. One hour later at 10.50pm and after trying several manoeuvres using docking thrusters to save the vessel, the ship capsizes at Gabbianara point. Only at 10.58pm (one hour and 15 minutes after crashing) the Captain finally orders ‘abandon ship’, but by then it is too late for a proper rescue operation. At the time of the collision there were 4229 persons on board the vessel; 3206 passengers and 1023 crew. It took until 12.05am the next day for the rescue to be in full swing. Thirty two people died with many more unlisted passengers possibly missing.
2. Passenger Safety
There was a great delay in managing the emergency. There were great shortcomings in the safety procedures followed by the Captain and crew who did not use a MAYDAY and left the ship prematurely during the rescue operation, leaving 300 passengers on board to save themselves and in the dark as the ship’s emergency lights flickered on. No lifeboat passenger evacuation drill had taken place for the approximately 600 passengers who had just embarked a few hours earlier. Several passengers asserted that the crew did not help or were untrained in launching the lifeboats during the crisis.
3. Effective on board crew policies and communications
Half an hour before the abandon-ship order, one crew member was recorded on video telling passengers at a muster station, “We have solved the problems and invite everyone to return to their cabins.” If passengers had followed the officers’ orders to return to their cabins, they would have drowned. Seeming lack of co-ordination and direction from bridge team to crew involved in safety issues hindered the management of the general emergency and abandon ship phases and contributed to initiatives being taken by individuals. Some of this poor communication seems to have been put down to the lack of wireless telephone system between the key personnel involved in the emergency. Possible lack of understanding or training of some of the crew about their individual roles and responsibilities in an emergency. Some of the officers in charge of the lifeboats either did not possess the correct safety certification or their certificates had expired. The majority of the crew were Filipinos, Indian, and Indonesia. In total the crew was made up of 38 different nationalities. Not all the crew were able to understand the emergency instructions in the ships working language (Italian).
4. Proper international standards for ship safety and drills
Like in the Titanic story, regulations were reviewed after the event in 2012 and improved. Sail-by salutes (an ancient maritime tradition of bringing a ship close to shore to salute those on land) was partly to blame. Today it is still unclear to what degree sail-by salutes are condoned by cruise companies.
The cruise industry adopted new safety policies now requiring to conduct passenger safety drills before leaving port. Regulations before the Costa Concordia tragedy required only to do safety drills within 24 hours of boarding instead of doing it immediately upon (passenger) boarding. In 2012, the CLIA (Cruise Lines International Association) and the ECC (European Cruise Council) introduced new policies: bridge officers must agree on the route before departing; ships must carry more life jackets; and access to the bridge must be limited.
Despite having the latest ship technologies for navigation, Costa Concordia, like Titanic was doomed. Weak corporate governance and ethics, lack of clear emergency response, poor crew procedures and communications, ineffective crew training and leadership all contributed to its demise. Like on the Titanic, Costa Concordia’s Captain navigated at night time in dangerous conditions (close to shore). Costa Concordia had taken for granted PASSENGER SAFETY AND CREW TRAINING as well as EFFECTIVE ON BOARD COMMUNICATIONS AND DECISION MAKING. The total cost of the disaster, including victims’ compensation, refloating, towing and scrapping costs, is estimated at approximately $2 billion, more than three times the $612 million construction cost of the ship.
Report: The Costa Concordia Shipwreck – Summary of Emergency Response Management
Video: Sinking of the Costa Concordia Caught on Camera (Full Documentary). Watch the chaos and confusion of passengers and crew minutes after the collision from minute 13.00 of the video. Some scenes are reminiscent from the movie Titanic with restaurant plates and furniture flying around the ship.
Video: Inside the Costa Concordia Wreck. GoPro footage documentary by © Jonathan Danko Kielkovski. The remains of the ship in Genoa before dismantling starts.
Video: Raising the Costa Concordia
On the Author
Nicolas De Santis is the CEO of Corporate Vision® and the President of Gold Mercury International, the global governance think tank and international award. A business theorist, author, consultant and entrepreneur, Nicolas is widely recognised as a visionary change agent, advising corporations, global brands, start-ups and governments on visionary governance, strategy, global branding, business model innovation, cultural alignment and the future direction of our world. De Santis advises international organisations, corporations and governments on national strategy, strategic visioning, cultural transformation, business model innovation & global brand strategy. As an internet entrepreneur, Nicolas De Santis was one of the founding management team of OPODO, the European online travel portal and of BEENZ.com, the first digital global internet currency.