Now faced with a rapid drop in revenue through falling oil price, Andrew Marks and his team will be using the platform established in the article below to select only the very best opportunities to make and save money in 2015 and beyond.
(Leader Board Article revisited – Published July 25th 2014)
On Your Marks For Naked Leader Conference
ANDREW MARKS is a man who has forged a strong alliance with Naked Leader founder David Taylor. As a business union, it has already produced sparkling results.
His main learning point for like-minded Naked Leader enthusiasts? Focus! On where you are going, what you are delivering, who is asking and most importantly, how is what you are undertaking contributing to your strategic objectives.
Here is Andrew’s fascinating insight into Tullow Oil’s ongoing success story…
The IT really really doesn’t matter
‘We take fifty guys and we celebrate if two of them make it. In what other business is two for fifty a success? If you did that on the stock market, you’d go broke,’ so Billy Beane, General Manager of the Oakland As baseball team during 2002/2003 season was fond of saying [Michael Lewis, Moneyball].
When looking at the exploration-focused oil and gas industry, a typical success rate is one in four. A whole lot better than baseball, thank goodness, yet at anything from $50m-$300m to drill an exploration well, one in four successes means three in four failures that might add up close to $1bn of investment when combined.
So, what can the IS function do to make its contribution felt? How do you stack the dice in your favour, operate in an ever-changing (and often unpredictable) environment, halt an ever-growing budget justified by an ever-growing business, and keep raising the service quality bar?
In typical Naked Leader fashion, the team focused on the money – and to show the long list of potential investments in terms of relative value potential (i.e. tangible contribution to Tullow’s bottom line) and relative business disruption (i.e. those harder versus those easier to do). Quickly, the team were able to present an all too familiar long-list as a true short-list.
Those accountable for the changes in how Tullow was going to need work in the future became the same people who were endorsing and rejecting “IT projects”, now recognised as “investments”. At the end of the day, the role of the IS team was to present the decision-makers with what they needed to make a truly informed decision. It was no longer the fault of IS to take on too much work.
The result? More ownership for fewer, more valuable projects; and projects in large part that had a greater chance of success. A shorter list meant greater focus for all staff involved whether delivering new IT or changing their ways of working. A focus on tangible returns, simply made the investments real.
Was there debate? Yes. Did everyone get their demands met? No. Did Tullow get the right decisions made? Most definitely.
At one point, that same group were given the choice to pause on starting new projects or support recruitment of more Project Managers. The decision? To pause and maintain headcount, thereby preserving a lower operating cost whilst agreeing to lengthen delivery time. Done before project start-up ensured that all expectations were met.
Has all the work been done? No, however huge progress has been made. Since that time, Andrew and his team have managed to keep a flat budget, seen the global organisation grow by more than 300 staff, enter four new countries, receive improving internal customer satisfaction, and can show tangible returns on these investments made.
With budget planning for 2015 under way, you can be sure that the demand will exceed the budget once again. The task will be to find the right balance of most value-efficient investments versus those essential investments necessary to ensure a safe and secure ongoing operational business.
The team and decision-makers have an approach they are comfortable with and that has delivered tangible impacts for Tullow and has the flexibility needed for operating the stock market in 2014 and onwards.
David adds: ‘Andrew is not really an IS leader – he is a business leader. We are so humbled to have him share his how-tos at our conference, in his only public event this year.’