organization design at chevron - productivity and - apqc · pdf file© 2012 chevron...

© 2012 Chevron

Organization Design at Chevron:

A Strategic Alignment Process

© 2012 Chevron

Organization Design – What is the value add?

3

Improved Business Results

The bottom line is continuous improvement of

organizational performance.

We enable results through 1) alignment of processes, resources, structure,

Organizational Capability and leadership with strategy; and 2) clarification of

interfaces and roles & responsibilities.

Everyone is staffed up to „run‟ the organization; but there is little time,

bandwidth, or deep experience to drive change.

We provide a proven methodology and experience driving strategic projects.

The project team benefits from a real-time project, facilitated to focus learning

on decision quality, CSOC priming behaviors, and action learning.

Change Leadership

Learning

© 2012 Chevron

Organization Design – A Strategic Alignment Process

4

20%

40%

40%

Structure Process Behavior

Our ultimate objective

is achieving predictable, sustainable results.

We enable results through

1) alignment of processes, resources,

and Organizational Capability, and

leadership with strategy.

2) clarification of interfaces, roles &

responsibilities; and

Organization Design is more than just

structure.

© 2010 Chevron

Star Model* Mapped to Project Management

Framework by Phase

5

Phase 1

Identify and Assess

Opportunities

Strategic Validation

Assess As-Is Organization

Goals:

• Assemble Project Team

• Clarify sponsorship

• Identify stakeholders

• Clearly frame opportunity

• Assess as-is organization for

ability to deliver on strategy

• Develop a compelling

business case

• Define types of needed

change and interventions

Agree on Project Scope and

Design Criteria

If structure change is one of

the appropriate interventions,

continue through this process

Phase 2

Generate

& Select Alternative(s)

Design

Macro Structure

Goals:

• Complete a review of core

processes that deliver on the

value drivers

• Define types of work within

each of the core processes

• Generate organization

structure alternatives, select

preferred alternatives

• Create draft communication

and engagement plan

Agree on macro design

structure

Sometimes also called ‘high

level architecture’

Phase 3

Develop Preferred

Alternative(s)

Design

Micro Structure

Goals:

• Define detailed structure,

number of positions

• Update role & responsibilities

• Develop position descriptions;

define grade levels

• Create or plan adjustments to

governance, processes, and

systems

• Create transition plan.

• Deploy communication and

engagement plan

Agree on micro structure,

changes in governance,

processes and systems and

on transition plan

Transition the

Organization

Goals:

• Build change skills for

leaders

• Select / deselect personnel

• Implement needed changes

in governance, processes,

systems

• Support personnel transition

• Continue deploying

communication and

engagement plan

• Develop sustainability plan

Phase 4

Implement

New organization in place

Phase 5

Operate &

Evaluate

Seek Additional

Synergy Capture

Goals:

• Strengthen leadership

and teambuilding skills

• Rally personnel around

the new direction

• Assess the extent to

which the organization

design achieves the

goals; adjust, as needed

• Share lessons learned

Seek additional

opportunities to capture

synergies

Strategy Processes,

Structure

Structure,

People Practices,

Culture

People Practices,

Culture

*Adapted from Jay Galbraith

© 2010 Chevron

Table Top Discussion

# Question

1. What are the value drivers in your business/organization?

2. What does your organization have to deliver to be considered a success?

3. What business problem are you trying to solve?

4. What are the 3-7 high level processes that deliver on your value drivers?

5. What are the activities, roles & responsibilities that make up these processes?

6. To what extent does your current organization design support these processes?

7. What is working in your current organization and would be good to preserve?

8. What is not working in your current organization?

9. What are your suggestions for change?

10. What are the potential solution sets for your list of critical issues?

(These alternatives are not limited to structural changes – remember 40/40/20)

11. With whom must you engage to ensure ownership of the new organization?

12. How do skill sets/behaviors/rewards align with the new organization?

6 Total Remuneration – Organization Design Toolkit

© 2012 Chevron

Approach to Organization Design at Chevron

Case Study 1

© 2010 Chevron

Program of Service Summary – Key Changes

Asset Development

8

Activity 2014

Trend Commentary

2017

Trend Commentary

• Evolve ADPs

from annual

updates to live-

active “war

maps”,

“schedules” and

“forecasts”

Increase • AD has tended to be viewed as

the “owner” of the ADP and thus

responsible

Decrease

• Deliver the SPO production curves and

expectations through an integrated

strategy and schedule

• Decrease - ADPs owned by all functional

groups. Reported thru AIS and

executed thru schedules

• Build the drill and

workover queue

Increase • We must keep rate and reserves

up while we transform the

business through executable

plans

Increase • We want to be 12 months in front of

every rig line and have living wellbore

utility diagrams for all fields. Executing a

deliberate plan.

• Production

Forecasts

Flat • Move from AMT to AIS Decrease • AIS will be the numeric characterization

and forecast for every field

• IOR/EOR Increase • Dump floods Increase • Large reservoirs under IOR will be

analysed for EOR and implemented

• Reserves Flat • Keep reserves compliant Flat • Keep reserves compliant

• Tier 2-3 Increase • Transition and oversee 3rd

handling of Tier 2-3 disposition

including drills, workovers and

sales

0 • Tier 2-3 exit the portfolio – all employees

working Tier 1

© 2010 Chevron

Service Delivery and Governance Tool

9

Activity Strategic or

Transactional?

Current Delivery

Local/Regional/

Enterprise?

Future

Delivery?

Governance

Local/Regional/

Enterprise?

• Evolve ADPs from

annual updates to

live-active “war

maps”, “schedules”

and “forecasts”

Strategic

Regional

Regional

Regional

• Build the drill and

workover queue Strategic Regional Regional Regional

• Production

Forecasts Strategic Regional Regional Regional

• IOR/EOR Strategic Local Local Local

• Reserves Transactional Regional Regional Enterprise

• Tier 2-3 Transactional Local Local Regional

© 2010 Chevron

“White Space” Exercise

10

Current Alternative 1

© 2010 Chevron

Current Organization

5

D&C

Advisor

Sr. D&C

Consultant

Deepwater

Team

Engineering Mgr

Shelf West

Engineering Mgr

Shelf East

Sr. D&C

Operations Mgr

Core Job

Responsibilities

Core Job

Responsibilities

Core Job

Responsibilities

Core Job

Responsibilities

Core Job

Responsibilities

Core Job

Responsibilities

• D&C core processes

and standards

(RUMS, MOC, well

design stds, KM

Team.

• BP/LL/Tech id and

sharing

• UDG well planning

and prep work

• Overall D&C plans for

UDG Plan.

• SEMS.

• Regulatory/permit

issues

• All D&C support for

DW assets that use

floating rigs Op and

Non-Op except for

exploration wells

• Well planning and

maturation of Shelf rig

lines in the West; Well

queue building




queue building

• All D&C

operations/execution

Cased Hole, D&C,

both Shelf and

Operated

• Daily Operational

Oversight

Additional Roles Additional Roles Additional Roles Additional Roles Additional Roles Additional Roles

• SQM

• OE Audit

• COPs

• SOPs

• L&D

• Perf Mgmt Team

• Joint Industry

Engagement

• EMNetwork

• Technology Ldrshp

• Svc Provider

Engagement (re:

technology)

• Influence NOJV

• Complex well

• Sr Lvl Tech Consult

• External BU advisor

• Advisor to PGPA

• BOEMR

• API JI Task Force

• Peer Review

• Interface w/DWEP

• Prof Engineering

Certification

• Influence NOJV

• Complex well

• DRB for CAPEX well

program

• Rig scheduling

• Perf Plan Process

• Lookbacks

• Campus Hires

• Intern program

• PMP for all D&C

engineers

• Manage engineering

resources (Peer

Review reqests, etc)

• Second assignment

Horizons


program

• Rig scheduling


• Lookbacks

• Campus Hires

• Intern program

• PMP for all D&C

engineers


resources (Peer



Horizons

• PMP responsibility for

all Supts

• Handles all

experienced hire for

WSMs/DSMs

• PDC Issues

• Hurricane Evac Team

• Well control Team

• Source control Team

• GU D&C Ops Mgr role

• D&C Contract LT

• HES/IFO Sessions

• OELIS Leadership

Sessions

• Primary reporter II&R

• Contractor Safety

Rating

• OE Responsibility

© 2010 Chevron


5

D&C

Advisor

Sr. D&C

Consultant

Deepwater

Team

Engineering Mgr

Shelf West

Engineering Mgr

Shelf East

Sr. D&C

Operations Mgr

Core Job

Responsibilities

Core Job

Responsibilities

Core Job

Responsibilities

Core Job

Responsibilities

Core Job

Responsibilities

Core Job

Responsibilities


and standards

(RUMS, MOC, well

design stds, KM

Team.


sharing


and prep work


UDG Plan.

• SEMS.


issues


DW assets that use


Non-Op except for

exploration wells




queue building




queue building

• All D&C


Cased Hole, D&C,

both Shelf and

Operated


Oversight


• SQM

• OE Audit

• COPs

• SOPs

• L&D

• Perf Mgmt Team

• Joint Industry

Engagement

• EMNetwork


• Svc Provider

Engagement (re:

technology)

• Influence NOJV

• Complex well



• Advisor to PGPA

• BOEMR


• Peer Review



Certification

• Influence NOJV

• Complex well


program

• Rig scheduling


• Lookbacks

• Campus Hires

• Intern program

• PMP for all D&C

engineers


resources (Peer



Horizons


program

• Rig scheduling


• Lookbacks

• Campus Hires

• Intern program

• PMP for all D&C

engineers


resources (Peer



Horizons


all Supts

• Handles all


WSMs/DSMs

• PDC Issues





• D&C Contract LT



Sessions



Rating



© 2010 Chevron


5

D&C

Advisor

Sr. D&C

Consultant

Deepwater

Team

Engineering Mgr

Shelf West

Engineering Mgr

Shelf East

Sr. D&C

Operations Mgr

Core Job

Responsibilities

Core Job

Responsibilities

Core Job

Responsibilities

Core Job

Responsibilities

Core Job

Responsibilities

Core Job

Responsibilities


and standards

(RUMS, MOC, well

design stds, KM

Team.


sharing


and prep work


UDG Plan.

• SEMS.


issues


DW assets that use


Non-Op except for

exploration wells




queue building




queue building

• All D&C


Cased Hole, D&C,

both Shelf and

Operated


Oversight


• SQM

• OE Audit

• COPs

• SOPs

• L&D

• Perf Mgmt Team

• Joint Industry

Engagement

• EMNetwork


• Svc Provider

Engagement (re:

technology)

• Influence NOJV

• Complex well



• Advisor to PGPA

• BOEMR


• Peer Review



Certification

• Influence NOJV

• Complex well


program

• Rig scheduling


• Lookbacks

• Campus Hires

• Intern program

• PMP for all D&C

engineers


resources (Peer



Horizons


program

• Rig scheduling


• Lookbacks

• Campus Hires

• Intern program

• PMP for all D&C

engineers


resources (Peer



Horizons


all Supts

• Handles all


WSMs/DSMs

• PDC Issues





• D&C Contract LT



Sessions



Rating


© 2010 Chevron


5

D&C

Advisor

Sr. D&C

Consultant

Deepwater

Team

Engineering Mgr

Shelf West

Engineering Mgr

Shelf East

Sr. D&C

Operations Mgr

Core Job

Responsibilities

Core Job

Responsibilities

Core Job

Responsibilities

Core Job

Responsibilities

Core Job

Responsibilities

Core Job

Responsibilities


and standards

(RUMS, MOC, well

design stds, KM

Team.


sharing


and prep work


UDG Plan.

• SEMS.


issues


DW assets that use


Non-Op except for

exploration wells




queue building




queue building

• All D&C


Cased Hole, D&C,

both Shelf and

Operated


Oversight


• SQM

• OE Audit

• COPs

• SOPs

• L&D

• Perf Mgmt Team

• Joint Industry

Engagement

• EMNetwork


• Svc Provider

Engagement (re:

technology)

• Influence NOJV

• Complex well



• Advisor to PGPA

• BOEMR


• Peer Review



Certification

• Influence NOJV

• Complex well


program

• Rig scheduling


• Lookbacks

• Campus Hires

• Intern program

• PMP for all D&C

engineers


resources (Peer



Horizons


program

• Rig scheduling


• Lookbacks

• Campus Hires

• Intern program

• PMP for all D&C

engineers


resources (Peer



Horizons


all Supts

• Handles all


WSMs/DSMs

• PDC Issues





• D&C Contract LT



Sessions



Rating



© 2010 Chevron


5

D&C

Advisor

Sr. D&C

Consultant

Deepwater

Team

Engineering Mgr

Shelf West

Engineering Mgr

Shelf East

Sr. D&C

Operations Mgr

Core Job

Responsibilities

Core Job

Responsibilities

Core Job

Responsibilities

Core Job

Responsibilities

Core Job

Responsibilities

Core Job

Responsibilities


and standards

(RUMS, MOC, well

design stds, KM

Team.


sharing


and prep work


UDG Plan.

• SEMS.


issues


DW assets that use


Non-Op except for

exploration wells




queue building




queue building

• All D&C


Cased Hole, D&C,

both Shelf and

Operated


Oversight


• SQM

• OE Audit

• COPs

• SOPs

• L&D

• Perf Mgmt Team

• Joint Industry

Engagement

• EMNetwork


• Svc Provider

Engagement (re:

technology)

• Influence NOJV

• Complex well



• Advisor to PGPA

• BOEMR


• Peer Review



Certification

• Influence NOJV

• Complex well


program

• Rig scheduling


• Lookbacks

• Campus Hires

• Intern program

• PMP for all D&C

engineers


resources (Peer



Horizons


program

• Rig scheduling


• Lookbacks

• Campus Hires

• Intern program

• PMP for all D&C

engineers


resources (Peer



Horizons


all Supts

• Handles all


WSMs/DSMs

• PDC Issues





• D&C Contract LT



Sessions



Rating


© 2010 Chevron


5

D&C

Advisor

Sr. D&C

Consultant

Deepwater

Team

Engineering Mgr

Shelf West

Engineering Mgr

Shelf East

Sr. D&C

Operations Mgr

Core Job

Responsibilities

Core Job

Responsibilities

Core Job

Responsibilities

Core Job

Responsibilities

Core Job

Responsibilities

Core Job

Responsibilities


and standards

(RUMS, MOC, well

design stds, KM

Team.


sharing


and prep work


UDG Plan.

• SEMS.


issues


DW assets that use


Non-Op except for

exploration wells




queue building




queue building

• All D&C


Cased Hole, D&C,

both Shelf and

Operated


Oversight


• SQM

• OE Audit

• COPs

• SOPs

• L&D

• Perf Mgmt Team

• Joint Industry

Engagement

• EMNetwork


• Svc Provider

Engagement (re:

technology)

• Influence NOJV

• Complex well



• Advisor to PGPA

• BOEMR


• Peer Review



Certification

• Influence NOJV

• Complex well


program

• Rig scheduling


• Lookbacks

• Campus Hires

• Intern program

• PMP for all D&C

engineers


resources (Peer



Horizons


program

• Rig scheduling


• Lookbacks

• Campus Hires

• Intern program

• PMP for all D&C

engineers


resources (Peer



Horizons


all Supts

• Handles all


WSMs/DSMs

• PDC Issues





• D&C Contract LT



Sessions



Rating


© 2010 Chevron


6

D&C

Advisor

Sr. D&C

Consultant

Deepwater

Team

Engineering Mgr

Shelf West

Engineering Mgr

Shelf East

Sr. D&C

Operations Mgr

Core Job

Responsibilities

Core Job

Responsibilities

Core Job

Responsibilities

Core Job

Responsibilities

Core Job

Responsibilities

Core Job

Responsibilities


and standards

(RUMS, MOC, well

design stds, KM

Team.


sharing


and prep work


UDG Plan.

• SEMS.


issues


DW assets that use


Non-Op except for

exploration wells




queue building




queue building

• All D&C


Cased Hole, D&C,

both Shelf and

Operated


Oversight


• SQM

• OE Audit

• COPs

• SOPs

• L&D

• Perf Mgmt Team

• Joint Industry

Engagement

• EMNetwork


• Svc Provider

Engagement (re:

technology)

• Influence NOJV

• Complex well



• Advisor to PGPA

• BOEMR


• Peer Review



Certification

• Influence NOJV

• Complex well


program

• Rig scheduling


• Lookbacks

• Campus Hires

• Intern program

• PMP for all D&C

engineers


resources (Peer



Horizons


program

• Rig scheduling


• Lookbacks

• Campus Hires

• Intern program

• PMP for all D&C

engineers


resources (Peer



Horizons


all Supts

• Handles all


WSMs/DSMs

• PDC Issues





• D&C Contract LT



Sessions



Rating


Current

1 Validate the activity

analysis by position for

the current organization

2 Map roles, responsibilities

and activities from the

current organization

to each alternative

DELIVERABLE: FROM EACH

PROJECT TEAM MEMBER

• Validated list of roles, responsibilities

and activities, by position, of the

current organization.

DELIVERABLE: FROM EACH

PROJECT TEAM MEMBER

• 3 Copies of Current roles and

responsibilities, with items that don’t map

to alternative highlighted.

• 3 Alternatives with roles, responsibilities

mapped by position.

© 2010 Chevron

Dual Reporting Relationships

Function Operations/Asset

“HOW” guidelines “WHAT” and “WHEN” direction

Standards & Procedures Project assignments

Training & Development , mentor selection Scheduling

Chevron Development Plan Priorities

PDC representation Input on development needs, mentor

PMP Input to PMP (endorses)

Salary Action Input to salary action (endorses)

HR Administration

11

Advisor

Engineer

Superintendent Regular communication

& alignment

© 2012 Chevron

Approach to Organization Design at Chevron

Exercises

© 2010 Chevron

The Star Model

13

Strategy

Vision, direction, short-

and long-term goals.

The cornerstone of

organization design

Structure

Power and authority.

Reporting relationships.

Organizational roles.

Processes

Lateral and vertical capability.

Interpersonal and

technological networks.

Matrix relationships.

Integrative roles.

Reward Systems

Goals, scorecards and

metrics.

Values and behaviors.

Compensation and

rewards.

People Practices

Staffing and selection.

Performance feedback.

Learning and

development.

The Star Model and Organizational Design Any organization consists of Strategy, Structure, Processes, Reward Systems and People Practices. All are interlinked. Altering one element, such as Structure, may require other elements to change. The Star Model illustrates what Organizational Design is all about:

Organizational Design is the alignment of Structure, Processes, and People to enable the company to pursue its chosen Strategy. Organizational Design is not just about Structure!


© 2010 Chevron

Using the Star Model as a Diagnostic Tool - Exercise

14

Strategy



The cornerstone of

organization design

Structure




Processes

Lateral capability.

Interpersonal and



Integrative roles.

Reward Systems


metrics.


Compensation and

rewards.

People Practices



Learning and

development.

Refer to your hand-out: „Using the Star Model as a Diagnostic Tool‟

Turn to Page 3 and answer the following question on Strategy (either individually or in your table team)

Think about the goals and strategy for your Company, Business Unit or Department

Has this strategy changed recently? If so, have other elements of the Star Model changed to enable

the strategy to be achieved?


© 2010 Chevron


15

Strategy



The cornerstone of

organization design

Structure




Processes

Lateral capability.

Interpersonal and



Integrative roles.

Reward Systems


metrics.


Compensation and

rewards.

People Practices



Learning and

development.


Turn to Page 4 and answer the following question on Structure (either individually or in your table

team)

How does the current structure help or prevent delivery of your strategy?


© 2010 Chevron


16

Strategy



The cornerstone of

organization design

Structure




Processes

Lateral capability.

Interpersonal and



Integrative roles.

Reward Systems


metrics.


Compensation and

rewards.

People Practices



Learning and

development.


Turn to Page 5 and answer the following question on Work Processes (either individually or in

your table team)

Which major work processes currently work well (are well integrated) and which need to be

improved?


© 2010 Chevron


17

Strategy



The cornerstone of

organization design

Structure




Processes

Lateral capability.

Interpersonal and



Integrative roles.

Reward Systems


metrics.


Compensation and

rewards.

People Practices



Learning and

development.


Turn to Page 7 and answer the following question on Reward Systems (either individually or in your table team)

Does the reward system motivate and reward individual, team, business unit and corporate performance?

If the strategy of the organization changes, are your rewards flexible enough to encourage new behaviors or do they

continue to encourage the „old way of doing things‟?


© 2010 Chevron


18

Strategy



The cornerstone of

organization design

Structure




Processes

Lateral capability.

Interpersonal and



Integrative roles.

Reward Systems


metrics.


Compensation and

rewards.

People Practices



Learning and

development.


Turn to Page 8 and answer the following question on People Practices (either individually or in

your table team)

Have the competencies that are required in your industry changed? If so, have the human

resources practices of the organization kept pace?


organization design at chevron - productivity and - apqc · pdf file© 2012 chevron...

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