120525 presentation leading change final

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120525 presentation leading change final

  1. 1. .
  2. 2. Leading changeVivienne Cox at BP Alternative Energy
  3. 3. Leading change
  4. 4. Background – Vivienne Cox BP Alternative Energy
  5. 5. Kotter’s 8 steps to successful change
  6. 6. 1. Increase urgencyVivienne Cox increased urgency by inviting 150 unit leaders to a strategy meeting:Beyond PetroleumThe world was facing a huge energy demand, there was an increasing public concernover climate change.This could create tremendous opportunities for the BP Alternative Energy business.
  7. 7. 2. Build guiding teamsOne of Cox’s core qualities as a leader is tobuild teams and to give them space andopportunity.Cox did not believe in ‘command & control’leadership, instead she used the network ofhuman relationship to built trust.Gas, Power and Renewables was mergedinto one business: BP Alternative Energy.Cox assigned leaders for the different AEbusinesses.She managed AE by being a catalyst and anorchestrator.
  8. 8. 3. Creating a visionVivienne Cox anchored AE’s vision with BP ‘sCEO John Brown.Her main concerns was of the environment andthe climate change. Cox wanted to createsustainable power sources which werefundamental important for the world.Cox used her open approach to let a visionemerge out of the process. In a 150 unit leadermeeting she depicted three waves of energy:The current oil wave, the natural gas wave andfinally the renewable wave.By doing this she established a common visionof tremendous opportunities for the AEbusiness.
  9. 9. 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 2005Cox asked her team to activatetheir networks to spread soundbites across BP.
  10. 10. 5. Enable action!Cox wanted action when launching BP AE. She involved hermanagers as change agents in order to remove obstacles inmindsets. She also created a buzz and played her part ingetting the word out. She went to several road shows andinvestor presentations with BP CEO Browne.Cox presented a case asking for at least $8 billion over 10years for BP AE.
  11. 11. 6. Create short-term winsDuring 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 wereestablished.
  12. 12. 7. Don’t let-upOne of the pitfalls when leading change isdeclaring ‘the war won’, when celebratingthe first improvement.Critics within BP were questioning the AEmodel and why it was necessary to detach itfrom the traditional E&P core business.However, after the first year Cox built on thesuccess by going back to CEO Browne,addressing the rapid growth in the marketand asking for $16 billion over 10 years.
  13. 13. 8. Make it stickCox always looked beyond the borders ofwhat she understood and constantlychallenged the established truths.To ensure the succession of BP AE VivienneCox hired 150 employees, 40 % wererecruited outside BP.Cox and her leadership team also attendedseveral environmental conferences toaddress the need of sustainable energy.BP Alternative Energy, launched inNovember 2005, is a portfolio of some ofthe fastest growing energy businesses inthe world today.
  14. 14. Kotter’s 8 steps to successful change
  15. 15. Leadership core qualities and challengesCore qualities: Pitfalls:1. Entrepreneur/innovative 1. Impulsive/erratic________2. Emphatetic____________ 2. Too “soft”___________3. Interactive/inclusive 3. Lack of direction Allergies: Challenges: 1. Command & control 1. Quality control (‘Creativity killers’)_ 2. Indecisive (ineffective decision-making) 2. Dictatorial Leadership 3. Operational focus 3. Detail focus
  16. 16. A Tale of Two Companies:Organizational Exploration & ExploitationFederico LozanoTromsø University Business SchoolMay 25th, 2012GRA8141: LeadershipBI Norwegian Business SchoolOslo, Norway
  17. 17. KjetilHei Fed! Have a propositionfor you, call me. Woohoo! Kjetil
  18. 18. San Bernardino, California (1948)
  19. 19. Ray Kroc
  20. 20. “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.
  21. 21. Fast forward 4 years…
  22. 22. “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.
  23. 23. McDonald’s Stock Price Source: Yahoo Finance
  24. 24. ExplorationSearchVariationRisk takingExperimentationPlayFlexibilityDiscoveryInnovationSource: March, J. G., Exploration & Exploitation inOrganizational Learning, Organizational Science, Vol.2, No. 1, Feb. 1991
  25. 25. ExploitationRefinementChoiceProductionEfficiencySelectionImplementationExecutionSource: March, J. G., Exploration & Exploitation inOrganizational Learning, Organizational Science, Vol. 2,No. 1, Feb. 1991
  26. 26. Organizational Exploration
  27. 27. Organizational Exploitation
  28. 28. OrganizationalExploration &Exploitation
  29. 29. Okay, but wasn’tthis presentation about BP?
  30. 30. Gargantuan Growth John Browne‟s Leadership Source: Yahoo Finance• World‟s second largest gas and oil company• Tripled its stock price• Twice reported the largest quarterly profit ever by an energy company
  31. 31. Lord John Browne “Climate Change: The New Agenda” Stanford Graduate School of Business May 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.
  32. 32. BP Exploration
  33. 33. Texas CitySeptember 2004 (2 dead)March 2005 (15 dead)
  34. 34. Thunder Horse accidentJuly 2005
  35. 35. Prudhoe Bay oil spill200 milesMarch 2006
  36. 36. Too much of a good thing? Joseph H. Bryant Head 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. Source: The New York Times, “In BP‟s Record, a History of Boldness and Costly Blunders,” July 12, 2010
  37. 37. May 2007:Out goes Browne, in comes Hayward
  38. 38. Lord John Browne BP CEO, 1995-2007 MS in Management, StanfordTony HaywardBP CEO, 2007-2010PhD in Geosciences, Edinburgh
  39. 39. Zero
  40. 40. bp back to petroleum? • 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 Sources: The Guardian, Bloomberg.com, Foreign Policy
  41. 41. Financial Times “Vivienne Cox to leave BP” June 9th, 2009“ 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.
  42. 42. BP Exploitation?
  43. 43. Loud and clear, Tony: So it’s back to basics?
  44. 44. Too late?Deepwater Horizon“The Titanic of Rigs”April 10th, 2010
  45. 45. Leadership lessons?
  46. 46. Don‟t let short-termism keep you from exploring— challengers are alwaysExploration around the corner Exploitation is essential toAmbidexterity reach scale, but remember to lift your head and “peek over the horizon”—oftenExploitation Exploration can be like drinking Jägermeister— you have to know when to say “enough is enough”
  47. 47. Tusen Takk! Questions or comments? Federico Lozano federico.lozano@uit.no

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