Shruti Verma | Lu Zhanf | Peter Bukor

Daniel Hoe | Weila Cui | Manvinder Singh

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Q1

Q2

Q3

Introduction

Identify David Simon‟s traits, roles and competencies as a leader and discuss how they have enabled him to initiate and accomplish a very successful turnaround of a large and compliated organization in a relatively short time

Why was David Simon able to successfully carry out Horton‟s transformational process? What did Simon do right, and what did Horton do wrong? How has Simon influenced BP‟s corporate culture?

Discuss the Simon-Brown dyad. In what sense can their roles be described as complementary?

Contents

-

Q1

Q2

Q3

Introduction

Identify David Simon‟s traits, roles and competencies as a leader and discuss how they have enabled him to initiate and accomplish a very successful turnaround of a large and compliated organization in a relatively short time

Why was David Simon able to successfully carry out Horton‟s transformational process? What did Simon do right, and what did Horton do wrong? How has Simon influenced BP‟s corporate culture?

Discuss the Simon-Brown dyad. In what sense can their roles be described as complementary?

Contents

Introduction

Late 1980s -> Robert

Horton successfully lead

change in Standard Oil

and lifter overall morale

1990-> Horton is made

CEO of BP. He initiates

change to make the org.

more open, empowered

and networked

Despite initial successes,

the program bogs down

and managers feel that

change is being „forced‟

Recession hits the

industry yet Horton

makes the strategic

mistake of continuing

expansion. This forces

him to make cuts later

Finally, due to his

abrasive management

style and perceived

arrogance, Horton is

forced to resign

1992-> David Simon

takes over CEO. Decides

to continue the org

changes. However, with

different style

Communicates effectively

with his managers,

establishes trust and

divests non-core

businesses

BP‟s performance

improves. John Browne is

made CEO. Focuses on

creating a distinctive

organization

With Simon as Chairman

and Browne as CEO, BP

continues to strengthen

the organization albeit

with certain risks

-

Q1

Q2

Q3

Introduction

Identify David Simon‟s traits, roles and competencies as a leader and discuss how they have enabled him to initiate and accomplish a very successful turnaround of a large and compliated organization in a relatively short time

Why was David Simon able to successfully carry out Horton‟s transformational process? What did Simon do right, and what did Horton do wrong? How has Simon influenced BP‟s corporate culture?

Discuss the Simon-Brown dyad. In what sense can their roles be described as complementary?

Contents

Profile◦ Speaks 5 languages

◦ Combines knowledge of the British establishment with Continental Europe background

◦ Educated at Cambridge and INSEAD

◦ Loves sports, not a „natural‟ academic

◦ Likes to chat, diplomatic, affable in manner

David Alec Gwyn Simon, Baron Simon of Highbury

(source: npg.org.uk)

Action/Characteristic Description

Speed and Simplicity

Focus and Accountability

Personal Attention, „People Skills‟

When stepping in as CEO, Simon moved fast and with a simple plan.◦ 3 yr “1-2-5” plan (represented financial goals)

◦ Focus on petroleum, downsizing in middle management

Every employee must have a Cost and Profit consciousness

Individual target > Measurement > Achievement

Understanding of the business and implications of one‟s work

A good listener who likes personal contact and teamwork.

Personal contacts to double check the formal reporting

Talking through problems, diplomacy and guidance

-

Q1

Q2

Q3

Introduction

Identify David Simon‟s traits, roles and competencies as a leader and discuss how they have enabled him to initiate and accomplish a very successful turnaround of a large and compliated organization in a relatively short time

Why was David Simon able to successfully carry out Horton‟s transformational process? What did Simon do right, and what did Horton do wrong? How has Simon influenced BP‟s corporate culture?

Discuss the Simon-Brown dyad. In what sense can their roles be described as complementary?

Contents

Why Horton Failed But Simon Did Not!

Issue Horton‟s response Simon‟s responseHence, during Simon‟s tenure…..

Making org. accept the change

• Did not make efforts to convince managers. Forced change

• “Guided Managers” without them realizing”

• Increased accountability and profit conciousness.

• Managers took higher degree of ownership of the change process

Forming relationships with managers

• Did not listen to employees. Always believed that he was right

• Displayed strong people skills. Listened to mgmt.

• High level of interaction with employees

• The managers trusted the CEO a lot more

Communicat-ion Style

• Abrasive. Plainspeaking• Percieved as arrogant

• Diplomatic • CEO was a better cultural fit in the British HQ

Strategic business decisions

• Kept expanding during recession and was later forced to make cuts. Project 1990 became synonymous with downsizing

• Divested non-core businesses.

• Curtailed expansion

• Morale of organization was much better

• Management could focus more effectively

David Simon Positively Influenced BP‟s Culture

More accountability and ownership

High level of trust within the mgmt

Improved mgmt. focus and balance sheets

Better cultural fit with the UK dominant board and organization

BP became a leaner org., improved its financials and successfully implemented the goals of Project 1990

-

Q1

Q2

Q3

Introduction

Identify David Simon‟s traits, roles and competencies as a leader and discuss how they have enabled him to initiate and accomplish a very successful turnaround of a large and compliated organization in a relatively short time

Why was David Simon able to successfully carry out Horton‟s transformational process? What did Simon do right, and what did Horton do wrong? How has Simon influenced BP‟s corporate culture?

Discuss the Simon-Brown dyad. In what sense can their roles be described as complementary?

Contents

Background

• In July 1995 David Simon became the Chairman of BP and his place as the CEO was taken by John Browne.

• John Browne was formerly the head of BP‟s exploration division. Browne took over as the CEO when BP was in excellent financial shape.

• He said at a time, “We have clawed our way back”.

The Simon-Brown Dyad (1/3)

Both Simon and Browne described BP‟s new goal as being the best in

each of its 11 criteria for business success.

They wanted to focus on getting a position which was as close to

dominating as it could be possible.

Browne‟s aim was to create a “distinctive” organisation, which would

be difficult to imitate, creation of a unique set of assets, & providing

unusual financial returns was his motive.

All this required a continuous development of organisation and

management processes.

The Simon-Brown Dyad (2/3)

Both Simon and Browne also wanted to make BP‟s competitive

strength greater than the sum of its parts.

By organisation, Browne meant the process by which the company

motivated its people and not its design.

Both of them agreed that the strong come back of BP was partly due

to staff reduction in 1992-1995.

Performance based on ever-improving teamwork was the theme

carried forward by the senior management team.

While Simon‟s slogan was “performance, reputation and teamwork”,

he also focused on continuity.

The Simon-Brown Dyad (3/3)

When John Browne took his place, Simon once again focused on achieving “profitable and disciplined growth”, to which Browne

concurred.

While Simon believed that BP’s performance was more important than its size, Browne intended to focus on volume growth and competitiveness by better management and exploitation of assets, rather than cost cutting.

Browne saw the partnership with Mobil as another step towards building BP’s strengths rather than diversifying BP.

According to FT, “the quality & implementation of corporate strategy, management of complexity, and skill at balancing the interests of customers, employees and shareholders”, made BP attain a position of prestige.

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