For five years, things had gone from bad to worse at this $750-million business unit of a major oil company. It was trapped in a vicious cycle: poor performance was met with decreased investment from corporate—which restricted growth opportunities, which in turn hampered performance even further. The situation was complicated even more by internal divisiveness. A culture of mistrust and narrow-mindedness undermined efficiency and effectiveness within the organization. To become competitive in its marketplace—and to retain a place in the company’s multinational enterprise—big changes were imperative.
This organization of 1,500 people needed a rapid turnaround. Leaders wanted to get the whole organization aligned and committed to measurable action as quickly as possible.
We identified a 37-member steering team to guide the work of the entire business unit’s transformation. The overloaded and battle-weary leadership team needed solid skills to prepare them for tackling this rapid change effort; their skill development was our first priority. After getting the senior leaders aligned, our focus became getting the broader leadership team, both formal and informal, aligned. We conducted a large group event that involved 300 of the 1,500 people in the organization and focused on the new roles required of leadership for this effort to succeed.
Our final building block was a 1,200-person Real Time Strategic Change decision making meeting that was held over three days. Eighty-percent of the entire organization reached consensus on the key changes that needed to be made to reverse the vicious cycle of defeat and transform it into a virtuous one of profit and new-found productivity. During our work together, we completely redesigned many critical organization and core processes. The new structure focused on six core processes and a portfolio management approach. Through the work of this large-scale meeting, we defined, negotiated and fully implemented, the portfolio management approach, numerous process improvements, and well-understood roles and responsibilities for all teams and employees.
- Return on fixed assets increased 15 percent (9 percent adjusted for price).
- Cycle time reductions saved $30 million.
- Capital spending overage dropped from $70 million to zero.
- A new business in selling and sharing services generated $12 million.
- Reduced a recurring expenditure by 30 percent.
- Five deep-water leases were signed—a first for the business.
- Morale turned from dispirited to enthusiastic. People learned to reach consensus and remained committed—individually and collectively—to the future direction they helped shape.