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120525 presentation leading change final
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Transcript of 120525 presentation leading change final
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Leading change
Kotter’s 8 steps to successful change
1. Increase urgency
Vivienne Cox increased urgency by inviting 150 unit leaders to a strategy meeting: Beyond Petroleum The world was facing a huge energy demand, there was an increasing public concern over climate change. This could create tremendous opportunities for the BP Alternative Energy business.
One of Cox’s core qualities as a leader is to build teams and to give them space and opportunity.
Cox did not believe in ‘command & control’ leadership, instead she used the network of human relationship to built trust.
Gas, Power and Renewables was merged into one business: BP Alternative Energy.
Cox assigned leaders for the different AE businesses.
She managed AE by being a catalyst and an orchestrator.
2. Build guiding teams
3. Creating a visionVivienne Cox anchored AE’s vision with BP ‘s CEO John Brown.
Her main concerns was of the environment and the climate change. Cox wanted to create sustainable power sources which were fundamental important for the world.
Cox used her open approach to let a vision emerge out of the process. In a 150 unit leader meeting she depicted three waves of energy: The current oil wave, the natural gas wave and finally the renewable wave.
By doing this she established a common vision of tremendous opportunities for the AE business.
BP AE’s vision:
Sustainable energy – sustainable business
4. Communicating the Vision“BP Alternative Energy is an important step towards meeting the desire of people to use energy in a way which is sustainable”.
Vivienne Cox - Introducing BP alternative energy - 29 November 2005
Cox asked her team to activate their networks to spread sound bites across BP.
5. Enable action!
Cox wanted action when launching BP AE. She involved her managers as change agents in order to remove obstacles in mindsets. She also created a buzz and played her part in getting the word out. She went to several road shows and investor presentations with BP CEO Browne.Cox presented a case asking for at least $8 billion over 10 years for BP AE.
6. Create short-term wins
During an investor presentation with Brown she let him in on some financial gains: “Did you know you can get a 10-12% risk free return on wind farms?”
The management team in AE was very clear about their performance improvements. One example of short-term wins was a $110M state-of-the art turbines purchase.
AE exceeded its first year financial targets and important strategic alliances were established.
7. Don’t let-up
One of the pitfalls when leading change is declaring ‘the war won’, when celebrating the first improvement.
Critics within BP were questioning the AE model and why it was necessary to detach it from the traditional E&P core business.
However, after the first year Cox built on the success by going back to CEO Browne, addressing the rapid growth in the market and asking for $16 billion over 10 years.
8. Make it stick
Cox always looked beyond the borders of what she understood and constantly challenged the established truths.
To ensure the succession of BP AE Vivienne Cox hired 150 employees, 40 % were recruited outside BP.
Cox and her leadership team also attended several environmental conferences to address the need of sustainable energy.
BP Alternative Energy, launched in November 2005, is a portfolio of some of the fastest growing energy businesses in the world today.
Kotter’s 8 steps to successful change
Leadership core qualities and challenges
Core qualities:1. Entrepreneur/innovative
2. Emphatetic____________
3. Interactive/inclusive
Pitfalls:1. Impulsive/erratic________
2. Too “soft”___________
3. Lack of direction
Challenges: 1. Quality control2. Indecisive (ineffective
decision-making)3. Operational focus
Allergies: 1. Command & control
(‘Creativity killers’)_
2. Dictatorial Leadership
3. Detail focus
A Tale of Two Companies:Organizational Exploration & Exploitation
Federico LozanoTromsø University Business School
May 25th, 2012GRA8141: LeadershipBI Norwegian Business SchoolOslo, Norway
Kjetil
Hei Fed! Have a proposition for you, call me. Woohoo! Kjetil
San Bernardino, California (1948)
Ray Kroc
“McDonald’s Hamburger Hell” March 3rd, 2003
It will take nothing short of a marketing miracle, though, to return McDonald’s to its youthful vigor…As McDonald’s settles into middle age, [its top management] may have to settle for stable and reliable.
“ “
Fast forward 4 years…
“Innovation: A Happy Meal For McDonald’s” Clayton Christensen, October 26th, 2007
By exploring untapped avenues for expansion beyond simply opening more stores, McDonald’s created new opportunities for innovation.“ “
McDonald’s Stock Price
Source: Yahoo Finance
ExplorationSearchVariationRisk takingExperimentationPlayFlexibilityDiscoveryInnovation
Source: March, J. G., Exploration & Exploitation in Organizational Learning, Organizational Science, Vol. 2, No. 1, Feb. 1991
Source: March, J. G., Exploration & Exploitation in Organizational Learning, Organizational Science, Vol. 2, No. 1, Feb. 1991
ExploitationRefinementChoiceProductionEfficiencySelectionImplementationExecution
Organizational Exploration
Organizational Exploitation
Organizational Exploration & Exploitation
Okay, but wasn’t this presentation
about BP?
• World’s second largest gas and oil company
• Tripled its stock price
• Twice reported the largest quarterly profit ever by an energy company
Source: Yahoo Finance
Gargantuan GrowthJohn Browne’s Leadership
Lord John Browne“Climate Change: The New Agenda”
Stanford Graduate School of BusinessMay 19th, 1997
bp beyond petroleum
We are all citizens of one world, and we must take shared responsibility for its future.
…a balance between the needs of development and the need for environmental protection.
“ “
BP Exploration
Texas CitySeptember 2004 (2 dead)March 2005 (15 dead)
Thunder Horse accidentJuly 2005
Prudhoe Bay oil spill200 milesMarch 2006
Joseph H. BryantHead of BP Angola (2000 -2004) CEO Cobalt International Energy
If you are going to ask people to innovate, you’d better make sure that they know that any risks they take are manageable.
Too much of a good thing?
Source: The New York Times, “In BP’s Record, a History of Boldness and Costly Blunders,” July 12, 2010
“ “
May 2007: Out goes Browne, in comes Hayward
Lord John BrowneBP CEO, 1995-2007MS in Management, Stanford
Tony HaywardBP CEO, 2007-2010PhD in Geosciences, Edinburgh
Zero
• Alternative Energy (AE) investments drop by $400M in 2009
• 2009: Hayward publicly questioned future of solar energy
• April 2009: BP closes solar- power plants in Spain and U.S.
• June 2009: BP shuts AE HQs
bp back to petroleum?
Sources: The Guardian, Bloomberg.com, Foreign Policy
Some companies respond to crisis by ‘innovating forwards’ and push women into new roles, others ‘hunker down backwards’ and focus on the core businesses and teams that made them successful…yesterday.
Financial Times“Vivienne Cox to leave BP”
June 9th, 2009
““
BP Exploitation?
Tony HaywardStanford Graduate School of Business
May 12th, 2009
Tony HaywardStanford Graduate School of Business
May 12th, 2009
Loud and clear, Tony:
So it’s back to basics?
Deepwater Horizon“The Titanic of Rigs”April 10th, 2010
Too late?
Leadership lessons?
Exploration
Exploitation
Don’t let short-termism keep you from exploring—
challengers are always around the corner
Exploration can be like drinking Jägermeister—you have to know when to say “enough is enough”
Exploitation is essential to reach scale, but remember to lift your head and “peek over the horizon”—often
Ambidexterity
