Daily Telegraph (UK): Fifty lessons: when a good decision goes bad: “David Varney chairman of HM Revenue and Customs”: “I was a managing director of Shell UK and was part of the board that made the decision to dump the oil platform Brent Spar in the North Atlantic.”: “…I was asked to manage the retreat, and spent the next three weeks leading a handpicked team of people inside Shell to pick our way through how to get out of the mess we'd got ourselves into.” (ShellNews.net) 18 Nov 04

(Filed: 18/11/2004)

Senior international business figures have agreed to share their experience in a series of filmed interviews with Fifty Lessons. Here is the first exclusive extract: David Varney, chairman of HM Revenue and Customs 

I was a managing director of Shell UK and was part of the board that made the decision to dump the oil platform Brent Spar in the North Atlantic.

The decision was made on technical grounds - a combination of safety and environmental grounds - and although the issue of the environment imagery of the dumping decision came up, it was not regarded as the most significant.

I thought we'd made the right decision technically. I was brought up on the science side, so I thought we'd got a sensible decision. But I began to realise as the campaign got more violent in Germany, and as more people in Shell started to put distance between themselves and the decision that we were going to have a hell of a struggle to sustain a position which in the total picture of Shell was not that significant.

I watched as that decision ran into more and more opposition and then, finally, on the evening before the decision was made not to dump, I was asked to manage the retreat, and spent the next three weeks leading a handpicked team of people inside Shell to pick our way through how to get out of the mess we'd got ourselves into.

There was tremendous work done to make sure the retreat didn't turn into a row. There was deep disappointment from the technical side of the house because they felt that what had been straightforward business and technical decisions were now being made political decisions. There was a split between those who felt that, in a sense, we had been wronged and we had made the right decision, and another group - of which I think I was probably one of the more prominent - who thought we'd made the wrong decision.

We'd failed the exam and we had to rethink our whole approach to the decision-making in these areas where it gets very controversial, where there probably isn't a right or wrong answer.

There was a hearts and minds problem, which we underestimated. We thought that if a small group of technically able people reached a conclusion, that should be good enough. But we couldn't carry the great mass of people in the organisation, we couldn't carry them overseas and we had no sensible argument to counter their view that this was like throwing a Coca-Cola can in a local pond.

Our explanation that it was like dumping a needle in Loch Ness didn't capture the hearts and minds of the public who were affected. Attitudes had changed, and if you're a big company you have a greater responsibility to explain what you're up to, and to do it through the perspective of many different audiences.

The lesson is that when you define a problem, have you defined it correctly? Is the problem I'm being presented with a problem as it's presented in technical terms, or is it broader?

And, if it's broader, are there other factors that need to be considered?

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David Varney chairman of HM Revenue and Customs

Biography

1946 Born

1968 Joined Shell Refining Company as a personnel assistant

1991 Appointed a managing director of Shell UK Ltd

1996 Became a director of Shell International Petroleum Company

1996 Joined British Gas as chief executive Designate of the proposed BG plc

1997-2000 Appointed chief executive of BG plc

2001 Chairman of MM0

2002 Appointed chairman of Business In The Community

2004 Appointed executive chairman of HM Revenue and Customs