Where Have All the Cowboys Gone?
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  • Chapter themesChapter 1 theme: KM/succession2:planning and comm3:team vs individual
  • 3 chapters:Where have we come from?Where do we currently stand?What are we going to do now? How are we going to effect the future?
  • John Wayne Cowboys – clip with kids. Kurt Russel. What’s the young gen’s role?I confirmed that the Congress will provide the following: Computer Office 2007Abilty to play .ppt & .pptx MS Media Player hooked to room’s audio system Ability to play DVDs Cowboy has deep historic roots As the ever-practical cowboy adapted to the modern world, the cowboy's techniques also adapted to some degree, though many classic traditions are still preserved today
  • Bill owns this slideADD: Start with bullet one at top (leave it), then add animation on the “characteristics”Cowboy characteristics:Execute without regards to collateral damage(Their way is the right way.) Rigid. Single minded. Inflexible.Poor communicators (more dictatorship vs. collaborative)(Loners.) Autonomy vs team work“Sheriff” mentality (ownership of town/project)
  • Bill owns this slideADD: Start with bullet one at top (leave it), then add animation on the “characteristics”Cowboy characteristics:Execute without regards to collateral damage(Their way is the right way.) Rigid. Single minded. Inflexible.Poor communicators (more dictatorship vs. collaborative)(Loners.) Autonomy vs team work“Sheriff” mentality (ownership of town/project)
  • Last man standingKnow how to execute project and get results, even when experiencing system constraints or process bottlenecks*slows down their progress…View PM as extra work (documentation, follow-up, communication)
  • Last man standingKnow how to execute project and get results, even when experiencing system constraints or process bottlenecks*slows down their progress…View PM as extra work (documentation, follow-up, communication)
  • Resource drilling projects and then the scope projects. Scale + pressure vs. risk (bad assumptions/mistakes on huge projects)
  • Inflation Adjusted Oil Price Charthttp://www.fintrend.com/inflation/inflation_rate/Historical_Oil_Prices_Chart.aspThe red line on the above chart shows oil prices adjusted for inflation in April 2011 dollars. The black line indicates the nominal price (in other words the price you would have actually paid at the time). As you can see current prices in real (inflation adjusted) terms fell from July 2006 until January 2007 but then rose sharply from January 2007 through June 2008.  From there we see one of the sharpest drops in history.  Note that the fall from the 1979 peak took until 1986 (7 years) to fall as much (percentage wise) as it lost in only six months in 2009. In nominal terms, we see a fall from $126.33 in June 2008 to $31.04 in February 09 but by June 09 it is back to $61.46 and by March of 2011 it was back to $94.72.  During the previous peak price back in 1979 the nominal monthly average oil price peaked at $38 per barrel (although the intraday prices spiked much higher).  The common price quoted is for the all time  high of  Oil prices is the price that the highest barrel ever sold for. That price doesn't  really have any effect on the price consumers paid. What really matters is the average price the refineries had to pay for the whole month. Interestingly, the highest monthly average occurred in December 1979 while the highest annual high occurred in 1980.  Which means prices spiked higher in late 1979 and then declined slightly but overall remained at higher levels throughout 1980 than they were in 1979. Adjusted for inflation in April 2011 dollars the 1979 $38 peak oil price is the equivalent of paying $111.43 today. (Note: This number is constantly changing as we adjust for inflation at the current moment.)In the 2008 run-up, the annual average price for all of 2008 was nominally $91.48 and fell much lower in 2009 to an average of $53.48. So on an annual average basis, prices were very close to 1979 but slightly below but on a monthly inflation adjusted basis 2008 prices exceeded 1979 prices but for a shorter duration.Note: The prices we use are for Illinois Crude which will be similar but not exactly the same as the  NY Crude spot price.  Also note that during the 1970's Oil prices were subject to price controls except for  "stripper" wells which were exempt. These price controls resulted in shortages and lines at the gas station in addition to some shootings and even deaths due to people "cutting in the gas line".  We use the free market stripper prices which more accurately indicate what prices would have been without the artificial price controls. 
  • Evaluate once the previous research completedCould insert some cool graphics around the Sept 11, Middle East, and alternative energy topics (all factors that affected the US economy)
  • Evaluate once the previous research completedCould insert some cool graphics around the Sept 11, Middle East, and alternative energy topics (all factors that affected the US economy)
  • Evaluate about other research completedGraph about capital spending
  • Evaluate about other research completedGraph about capital spending
  • Emphasize 2008 plummet
  • Go ahead and do a cool graphic/animationsDallas Cowboys – developing your team. Ronnie’s ideaStats from white paper
  • Ideas:1980S Oil GlutIran-Iraq Gulf War began (We could fade these deadlines on the New York Times graphic too)OPEC decreased oil productionLandmenTools during this time period (i.e., sliding ruler)(i.e., 1980’s sever market challenges, working as landmen, OPEC struggles)post headlines- June 1981, The New York Times stated an "Oil glut! ... is here" and Time Magazine stated: "the world temporarily floats in a glut of oil,“The 1980s oil glutwas a serious surplus of crude oil caused by falling demand following the 1970s Energy Crisis. The world price of oil, which had peaked in 1980 at over US$35 per barrel ($93 per barrel today), fell in 1986 from $27 to below $10 ($54 to $20 today).[2][3] The glut began in the early 1980s as a result of slowed economic activity in industrial countries (due to the crises of the 1970s, especially in 1973 and 1979) and the energy conservation spurred by high fuel prices.[4] The inflation adjusted real 2004 dollar value of oil fell from an average of $78.2 in 1981 to an average of $26.8 per barrel in 1986.[5]After 1980, reduced demand and overproduction produced a glut on the world market, causing a six-year-long decline in oil prices culminating with a 46 percent price drop in 1986.The 1986 oil price collapse benefited oil-consuming countries such as the United States, Japan, Europe, and Third World nations, but represented a serious loss in revenue for oil-producing countries in northern Europe, the Soviet Union, and OPEC.
  • Multi-taskingTelecommunicating/collaboration/IMWashington Post, “Soaring gasoline and oil prices are encouraging many to seek out alternative fuel sources.”Contrast previous slide with what the industry looked like when the newest generation entered the industry (i.e., technology savy, formal PM training, 2008 plummet, 2010-2011 high oil prices, alternative energy)Ideas:Alternative fuels - solar power, wind power, and advanced biofuels.More sophisticated tool kit (popular iPhone aps for engineers)Optic­sCalc – calculatorCompCalc Element14 EverywhereiLogica Voltage Drop Calculator Equivalence Electrical Formulator Pro e-ENGineerHurricane KatrinaGlobal recession2009 dropFor a time, geo-political events and natural disasters indirectly related to the global oil market had strong short-term effects on oil prices, such as North Korean missile tests,[5] the 2006 conflict between Israel and Lebanon,[6] worries over Iranian nuclear plans in 2006,[7]Hurricane Katrina,[8][9] and various other factors.[10] By 2008, such pressures appeared to have an insignificant impact on oil prices given the onset of the global recession.[11] The recession caused demand for energy to shrink in late 2008, with oil prices falling from the July 2008 high of $147 to a December 2008 low of $32.[12] Oil prices stabilized by October 2009 and established a trading range between $60 and $80.[12]In May 2008, T. Boone Pickens, an influential oil investor who believes the world’s oil output is about to peak, predicted oil prices would hit $150 a barrel by the end of the year. “Eighty-five million barrels of oil a day is all the world can produce, and the demand is 87 m,” Mr Pickens said in an interview with CNBC. “It’s just that simple.”[68]
  • Improved Communication between the generationsFoundationalConsistencyKnowledge transfer and experience development“teaching” vs. “telling”Embeds a legacy
  • Improved Communication between the generationsFoundationalConsistencyKnowledge transfer and experience development“teaching” vs. “telling”Embeds a legacy
  • What’s the balance between rigorous processes and Cowboy approaches?Avoid overly rigid systems that stifle the Cowboy’s freedom to get the job completedImplement PM processes, while leveraging the Cowboys’ strengths
  • What’s the balance between rigorous processes and Cowboy approaches?Avoid overly rigid systems that stifle the Cowboy’s freedom to get the job completedImplement PM processes, while leveraging the Cowboys’ strengths

Transcript

  • 1. Where Have All the Cowboys Gone? Session TRN 22 NA 2011Bill Fournet, PMP, The Persimmon GroupRonnie Stephens, Williams “PMI” is a registered trade and service mark of the Project Management Institute, Inc. ©2009 Permission is granted to PMI for PMI® Marketplace use only
  • 2. Brute Force and Raw SkillCOWBOYS
  • 3. What’s a Cowboy? An animal herder in North America, traditionally onhorseback, and oftenperforms a multitudeof other ranch-related tasks.
  • 4. • Video clip from the John Wayne movie Cowboys
  • 5. What’s a Cowboy?
  • 6. Oil and Gas Cowboy Characteristics Employees’ behaviors representative of the “git’r done” spirit of the American West
  • 7. Oil and Gas Cowboy Characteristics Survivors Autonomous Poor Communicators Unwavering Confidence Subject Matter Expertise Individual Problem Solvers Extensive Experience Thrives in Ambiguous Situations
  • 8. Do you have Cowboys in your organization?
  • 9. PROJECT MANAGERS
  • 10. How did Cowboys become project managers?• Often engineers…in past came out of the field• Project management is another “hat” for them
  • 11. How did Cowboys become project managers?• How do Cowboys view project management? – Overhead – Paper shuffling – Big Brother looking over the shoulder – Equates to Construction Management—not Planning, Permitting, Land, Documentation… – Not fun!
  • 12. What is a project manager’s role? “Lead projects to a successful completion byleading, planning, organizing, and controlling the project stakeholders, resources and the project environment”
  • 13. What is a project manager’s role?Cowboy project manager’s challenges: – Employ PM concepts without a formalized strategy – Do not work well in defined processes – Struggle with formal change management processes – Verbally communicating vs. demonstrating processes – Responsibility vs. Accountability – Lack political savviness – Scalability, pressure, consistency
  • 14. Oil & Gas Project Types Resource-driven Scope-driven Drilling, pipelines, Refineries, power plants, large small construction construction projects• Tasks well understood • Scope not fully defined• Repeatable • Not repeatable• Resource management is key • Lack of intrinsic experience• Daily fights over who gets what • Misses around assumptions• Aggressive scheduling • Fundamental misses greatly impact• Crisis management time and budget • Walk. Walk. Walk. Run!• Efficient use of resources • Getting breadth and risk management
  • 15. COWBOYS UNDER PRESSURE
  • 16. Oil and Gas Industry (2007)• US economy near recession  Sept 11th terrorist attacks  Instability in the Middle East  Exploration of alternative energy• Companies capitalized on surging oil prices• Precursor spike in oil and gas companies’ capital investment
  • 17. Oil and Gas Industry (2007)• Majority of projects were over budget and behind schedule• No major refinery has been constructed in the United States since 1976
  • 18. Oil and Gas Industry (Post-2008)• Cost per barrel of crude oil plummeted• Companies delayed capital spending• Most execs stopped focusing on capital project’s planning, execution, and control processes• Settled back into a Cowboy mentality
  • 19. Oil and Gas Industry (Post-2008)• Hard to find new employees with experience• Recognized need to get experience out of Cowboys into New Generation• Increased desire for renewables
  • 20. Capital Expenditure (CAPEX) Trend
  • 21. When a Project is in trouble…what are the most common responses? Responses Impacts Stop documenting Information in individuals’ mindsQuality Control suffers Pre-production impacts— schedule delays Schedule delays Call in Cowboys and fix at all costs / reduce scope Scope reduction Create a “Phase 2” in the project and place scope changes into this phase
  • 22. Challenges• Increased pressure on construction• Market volatility and speed of change• Instant information• Demand increasing while supply shrinking• Workforce gaps
  • 23. • Video clip from the John Wayne movie Cowboys
  • 24. GENERATIONAL CRISIS
  • 25. Oil and Gas WorkforceAverage age of employees Estimated 5,000is in the late-40s to early experienced petrochemical50s professionals will retire by 2014 Oil and gas employees are 50% of workers in the oil projected to retire between and gas industry will retire the ages of 55 and 60 within the next 5-10 years
  • 26. Cowboy Generation
  • 27. Newest Generation
  • 28. Current Cowboy Challenges• Real gap in workforce experience• Knowledge management and transfer• Failure to recognize project management as a discipline
  • 29. Current Cowboy Challenges• Opposing work styles• Equating Speed and Tools with Experience• Communications smorgasbord
  • 30. WHERE DO THE COWBOYS GO?
  • 31. Where we started • Lack of consistent processes • 50 spreadsheets with their version of the “truth” • Cowboy-led • No Formal PM Training for more than a decade • Status by invoice (reactive) • High forecasts variances • Visibility by whiteboard
  • 32. What we did • PM method developed by Cowboys and New Generation • Implemented status dashboard and KPIs • Trained PMs and non-PM’s by PM’s • Knowledge Transfer between Cowboys and New Generation
  • 33. The Results • Consistent control processes • One version of the truth, common tools • Broader team of PM’s, shared lessons • PM Training and Rollout to all areas • Status by milestone (proactive) • Realistic schedules and budgets • Variances becoming manageable • One version of status
  • 34. How Project Management Can Help Bridge the Gap• Mitigates risk of scale, pressure, and complexity – Consistent terms & techniques – Increased organizational memory – Visibility & Decision Quality
  • 35. How Project Management Can Help Bridge the Gap• Improved Communication between the generations – Foundational – Consistency• Knowledge transfer and experience development – “teaching” vs. “telling” – Embeds a legacy
  • 36. What’s the balance betweenrigorous processes and Cowboy approaches?
  • 37. What’s the balance betweenrigorous processes and Cowboy approaches?
  • 38. How To: Leverage your CowboysActions:• Document processes• Implement rigorous PM oversight• Allow team members to experiment and determine if effective process changes can be made
  • 39. How To: Leverage your CowboysOutcomes:• Repeatable, adequately managed, and optimized processes• Major quality and quantity improvements
  • 40. How To: Establish Project Management Processes• What are the essential elements for implementing more formal PM processes? – Internal sponsorship – Prioritization – Top-level planning commitments – Dedicated resources
  • 41. How To: Establish Project Management Processes• Where do you start? – Establish project governance and oversight – Identify a set of controls for decision making – Create visibility into a project’s progress
  • 42. How To: Transfer Cowboy “Know-How”• Use Cowboys in teaching and mentoring roles• Both structured training and on- the-job mentoring
  • 43. How To: Transfer Cowboy “Know-How”• Involve Cowboys in standardized PM processes to help regulate the inflow/outflow of human capital
  • 44. • Video clip from the John Wayne movie Cowboys
  • 45. Not all of your cowboys are going to be John Wayne, so where should you focus your efforts to address some of the issues we have discussed today:• Construction Management (50-70% of costs)• Planner/scheduler• Risk Management• Formal Lessons Learned / Change management program• Training
  • 46. Contact Information• Bill Fournet, The Persimmon Group – billfournet@thepersimmongroup.com – LinkedIn: Bill Fournet – Twitter: @billfournet• Ronnie Stephens – Ronnie.Stephens@Williams.com – LinkedIn: Ronnie Stephens