At a Glance
A major oil and gas producer with a global portfolio of producing assets, was facing increasing schedule and budget risks due to complex engineering challenges on a subsea development in which it held a 50% stake.
Renoir was engaged to conduct a rapid intervention to provide the project team with objective feedback and insight into the day-to-day management of the project, and to recommend practical actions to reduce schedule and budget risks over an eight-week period.
We implemented a new leadership forum to help the project team identify the right issues to focus on and restructured existing KPIs with leading indicators.
Background
Our client is a major oil and gas producer with a global portfolio of producing assets, including several assets in the North Sea. They are constantly looking for development opportunities, often as part of a joint venture, to increase reserves and production output.
For this project, our client has a 50% ownership in a subsea development tied back to an existing facility also owned by our client.
Analysis
The engineering aspects associated with the development of the project were initially straightforward. However, as the project progressed, the challenges became significantly more complex, thereby increasing the risks to the schedule and budget.
Given our long-standing relationship with the client, we were asked to conduct a rapid intervention over an eight-week period. The intervention was intended to provide the project team with objective feedback and insight into the day-to-day management of the project, and to recommend practical actions to reduce schedule and budget risks.
Project Approach
Through preliminary informal discussions, we were able to begin to formulate ideas and focus areas for further exploration. These discussions brought to light concerns that were not always apparent or communicated to the broader team, primarily due to the constant prioritization of more immediate issues.
Participation in several daily and weekly project governance meetings gave us the opportunity to evaluate the quality of the discussions and decisions. Over a two-week period, several interrelated topics emerged from our observations.
Observation 1
The senior team was overly focused on granular details that would normally be handled by their direct reports, rather than on emerging technical and managerial issues. This tendency is not uncommon in engineering project environments. To address this, we introduced the concept of “weak signals” to highlight seemingly minor issues that could escalate into crises. The team readily accepted this concept and embraced the need for change.
Observation 2
The project has multiple teams, each responsible for different phases, and each with its own set of Key Performance Indicators (KPIs), some of which overlapped. Some KPIs were arbitrary, with monthly targets not fully aligned with the overall targets. This led to a false sense of accomplishment that meeting the monthly targets meant that the overall targets were also met. In addition, most KPIs were lagging indicators, thereby limiting the team’s ability to identify and proactively address emerging issues.
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Implementation
Implementation of a weekly leadership team “weak signals” meeting process
We designed and implemented a new leadership team forum to shift the leadership team’s focus and discussion away from the short-term and day-to-day focus. The forum was designed to give the team space and opportunity to think longer term. These discussions, called the “weak signals” meetings, emphasized the importance of focusing on potential issues that may arise beyond the immediate weekly or monthly timeframe.
After implementing and iterating the meeting process, feedback on the value of the meeting was positive, demonstrating that it was meeting the needs of the project. It was also flexible enough to accommodate the changing needs as the project progressed through different phases.
Streamlining and restructuring KPIs
By streamlining and consolidating KPIs, we simplified reporting and shortened weekly reviews. In addition, the introduction of leading indicators to existing KPIs allowed us to identify or bring to the attention of senior management potential issues that might otherwise have been overlooked. These changes were quickly implemented and incorporated into the existing performance reporting cadence.
Results
A streamlined and focused set of project KPIs focusing on the use of leading indicators to identify potential problems
Implementation of a project leadership meeting process – the weak signals meeting – to proactively address issues before they develop into more serious problems
In certain cases, a short, rapid intervention can provide immediate benefits without overburdening a team that is already under significant pressure. The key to a successful intervention is to help the team identify and implement changes that can quickly produce substantial results. However, implementing change, even on a small scale, can be challenging for any team. Therefore, providing external support to facilitate the implementation of these changes is critical.
In this case, knowledge of the industry and the project environment was also critical to gaining trust and credibility. As a result of this intervention, the project team is now equipped with the necessary KPIs and tools to effectively mitigate the risks to schedule and budget.
*We have intentionally omitted client-specific details to maintain strict confidentiality.
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