It was a moment that will go down in Oscar’s history: the 2017 Best Picture debacle.

As Hollywood’s elite gathered once again for the 2023 Oscars ceremony on Sunday night, the memories of that infamous night come flooding back.

As the ceremony drew to a close, the Best Picture award remained last to be announced, but no one was prepared for what was about to ensue: the wrong winner was declared, causing chaos and confusion on and off stage. It was a moment that left everyone stunned, but what really happened? And what are the lessons that we learn from this incident in terms of risk management?

Let’s set the scene…

The incident occurred when PricewaterhouseCoopers (PwC), the accounting firm responsible for tallying and distributing the results, made a critical error. Brian Cullinan and Martha Ruiz, two PwC accountants, were in charge of handing out the envelopes containing the winners’ names. However, Cullinan mistakenly handed veteran actor and filmmaker Warren Beatty an envelope containing the name of the previous award winner, Emma Stone for Best Actress. Beatty looked confused, and hesitated before showing the envelope to his co-presenter, 1976 Best Actress winner Faye Dunaway, who announced “La La Land” as the winner. It wasn’t until the cast and crew of “La La Land” were already on stage accepting the award that the mistake was discovered, and “Moonlight” was announced as the rightful winner.

The incident was a massive embarrassment for PwC and the Academy of Motion Picture Arts and Sciences, who had trusted them to handle the sensitive and high-stakes task of managing the Oscars voting and award process. But what went wrong? There were several risk management errors that contributed to the mistake.

First Act: The impact of unclear communication

Looking back at the events of that night, it is clear that there was a lack of clear communication between the PwC accountants and the show’s producers. Cullinan and Ruiz were supposed to be the only two people in possession of the envelopes containing the winners’ names. However, Cullinan was also tweeting backstage photos during the ceremony, which suggests that he was not fully focused on his job. This lack of focus and distraction could have led to his mistake.

Effective communication is essential in managing risks because it enables all stakeholders to understand the potential risks and take appropriate actions to mitigate them. When communication is unclear, it can lead to misunderstandings and misinterpretations, which can result in increased risks and negative consequences.

For instance, a lack of clear communication about safety procedures in a workplace can increase the risk of accidents and injuries. If employees are not properly informed about safety protocols, they may not know how to respond in an emergency, leading to potential harm to themselves and others.

Had they explicitly communicated to Cullinan that whilst he oversaw the envelopes, he wasn’t allowed to partake in non-work-related activities, like tweeting and taking pictures, he may have been more focused on his job and the right envelope would have been given to the announcers.

Second Act: Exploring the consequences of not having a backup plan

As unbelievable as it may seem for an event that has been taking place since 1929, there was no contingency plan in place for handling mistakes. When the wrong winner was announced, there was no clear protocol for what to do next. This led to confusion and chaos on stage, which could have been avoided if there had been a plan in place. A contingency plan is a pre-planned strategy to address unexpected events or circumstances that could disrupt normal operations or activities. Having a contingency plan in place is important because it enables organizations and individuals to respond quickly and effectively to unexpected situations and minimize the negative impact on their goals, objectives, or projects.

Another clear example of how a lack of a contingency plan can have incredibly adverse effects is the 2019 Boeing crisis when two of its 737 Max planes crashed within five months, killing a total of 346 people. The accidents were attributed to a software issue, and it was revealed that the company had no contingency plan in place for such a situation.

In both these cases, having a contingency plan in place could have mitigated or even prevented the negative consequences of the unexpected events.

Final Act: Giving in to a false sense of confidence

The last mistake that this incident highlighted was the lack of oversight and accountability. PwC had been handling the Oscars for years, and they had never made a mistake before. This gave them a false sense of confidence, which led them to believe that they didn’t need to take extra precautions or double-check their work.

One notable incident where a lack of oversight and accountability affected a business is the Volkswagen (VW) emissions scandal that was uncovered in 2015.

In September 2015, the US Environmental Protection Agency (EPA) issued a notice of violation to Volkswagen, accusing the company of installing illegal software in its diesel vehicles that allowed them to cheat on emissions tests. The software could detect when a car was being tested and would activate emission controls, but under normal driving conditions, the controls were turned off, allowing the vehicles to emit up to 40 times the legal limit of nitrogen oxides (NOx).

The lack of oversight and accountability within Volkswagen allowed the illegal software to be installed in millions of vehicles, and the company failed to detect the issue for several years. The scandal highlighted the importance of strong oversight and accountability mechanisms in businesses to prevent illegal and unethical behaviour and protect stakeholders’ interests.

How can Senscia help?

In conclusion, the Oscars 2017 incident is not unique and has/will happen in other industries too. The failure to manage risks can have serious consequences, and organizations must take steps to mitigate them.

The Best Picture blunder could have been avoided with proper planning and a clear risk management process being put in place. The consequences of not having one can be severe and can impact an organization’s reputation, finances, and even its very existence. The Academy and PwC were fortunate enough that this incident is now just remembered as a viral gaffe, but your company may not be that lucky.

At Senscia, we believe that risk management is critical for organizational success, and our e-learning services can help companies avoid similar failures. Our tailor-made courses can cover a range of topics and allow you to send the right message and information to your teams. We also aim to help you emphasize the importance of building a risk culture within your organization and can provide tools to help your company develop effective risk management policies and procedures to avoid situations like the Oscars incident.