Mobil Oil

The Problem

I was at a conference to make a presentation on Real Time Strategic Change. One evening I found myself cornered in the bar by two roustabouts. Those are the people who spend weeks at a time working on oil rigs. They grilled me for two hours about the work I was doing with Real Time Strategic Change. Who was I? What was this Real Time Strategic Change stuff? How did it work? Why did it work?

Later I found out they were two of 25 people from Mobil’s Gulf of Mexico business unit at the conference. Mobil had sent geoscientists, accountants, and project managers to the meeting. Their leaders had committed to creating a participative culture. To most, participation means employees have a say in what changes are made. For Mobil’s leaders it meant more. People from across the organization were also going to help decide which change approach to use.

Mobil’s Gulf of Mexico unit had a problem. They hadn’t made money for the past five years. To make matters worse, they were trapped in a vicious cycle. Corporate was refusing to invest in the underperforming unit. No cash from corporate meant they had no money for growth opportunities and fewer growth opportunities led to even worse performance. People in the business unit called it a “death spiral.”

Lack of teamwork was an additional problem for the 1,200 employees in the Gulf. Mistrust and parochialism were winning out over efficiency and effectiveness. To stay in business, things had to change – and fast.

The approach they chose had to meet three criteria:

• A team representing every function would decide who was going to be involved, how, and when in the effort
• Everyone in the business needed to be directly involved in saving it
• Changes had to be made right away

The Solution

Step 1: The Leadership Team doubled in size to include union and informal leaders. They then set parameters for the effort, clarified goals, and agreed to provide the leadership needed for the effort to succeed

Step 2: A Change Effort Design Team of 37 people from across the business developed the purpose and plan for the overall effort

Step 3: 300 formal and informal leaders refined the change approach, goals, purpose, plan and roles in a two-day event

Step 4: 1,000 people from across the organization met for three days and reached consensus on 10 “Big Actions” to save the business

Step 5: 25 people from the large event and 10 project planners distilled the “Big Actions” into 6 new work processes

Step 6: Dedicated teams led the implementation of the new work processes and redesigned the organization using a portfolio management strategy

The Result

Within 15 months from launching the change effort, the $750 million business unit achieved these results:

• 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 and reduced a recurring expenditure by 30 percent
• Five deep-water leases were signed—a first for the business.
• Morale turned around and the entire organization committed to create the future they had all helped shape.

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