Thoughts and Insights on Business Excellence in the Energy and Heavy Process Industries
There have been many initiatives taken on by the majors in recent years. As margins eroded and began impacting overall performance, the imperative to get “fit” has finally become reality in the inner sanctum of the C-suite.
Evolve consultants are expected to demonstrate a depth and breadth of implementation skills across results, processes, behaviors and change leadership. This requires a real passion for human development with skillful observation, coaching and feedback.
n the first blog post on Integrated Planning we talked about IAP’s roots. In this entry we are going to talk about what feeds those roots. IAP can be considered the Operational – or Execution – end of the business unit’s strategy. It is, in essence, the Operational Strategy.
In our last posting we introduced the topic of incentives and consulting agreements by asking the question: It is possible to have so much skin in the game that the consultants start taking over how the client operation is run? We also described how a fees for performance arrangement differs from a fees at risk structure, highlighting the risk of driving unintended results.
In 2004, Forbes ran a story that talked about how consultants, keen to demonstrate their commitment to delivering results, were increasingly electing to enter into fee arrangements tied to performance. These typically involved setting aside a portion of the overall fees and tying their payment to the achievement of stated benefits for the client, and even providing for “gain share” arrangement for sharing in a portion of results delivered over the target.
Achieving the highest levels of operating efficiency as quickly as possible is a major driver of capital efficiency. Too often projects come on line and encounter slow ramp ups of highly variable production far below target performance. Even those projects that do strongly move into production, often experience precipitous decline as the shiny newness of equipment quickly wears away. Much of traditional operational improvement consulting focuses on improving the performance of steady-state operations, where there is a lot of data on historical performance. But how do you improve something you haven’t yet built?
Integrated Activity Planning (IAP) got its start in the Offshore Oil & Gas environment. Integrating key activities there is critical given the significant constraint on space and the premium placed on operating in a safe manner. There is only so much room for materials and workers to occupy on a platform so Integrated Activity Planning became the vehicle to coordinate disparate functional activities into a singular, well-orchestrated series of events focused on maximizing productivity while ensuring safe and efficient operations offshore.
The role of the Program Management Office (PMO) is to tightly control the planning and management of complex business programs. Proper Program Management achieves the following goals:
Not surprisingly we have a long track record with many of the industry’s best companies because our approach adds more value in the short term and far more value in the long term—and they recognize that. The outcome is that we have worked in all aspects of the value chain of many of the clients we serve.
Learning how to deliver superior results faster by motivating people and growing their capability is a key source of shareholder value and competitive advantage for our clients. It is the “magic” that enables all successful organizations to maximize the return on their strategy, assets and investments.