Masters of management
Since Frontiers first reported BP's setting up of its pioneering Projects Academy in 2003, many of the company's current and aspiring project managers have passed through its doors. Malcolm Brown finds out what has been achieved thus far in improving the performance of BP's major projects around the world
In response, BP had set up the Projects Academy in collaboration with Massachusetts Institute of Technology (MIT), with the aim of building a world-class project management capability and radically improving the company's projects performance. BP spends around $17 billion a year on new projects, so knocking even a single percentage point off the bill would mean very big savings.
Just days after reading the article, Cattell got a call out of the blue from BP. They wanted to know if he would be interested in becoming their group director of projects, responsible - among other things - for the Projects Academy. He accepted the post.
Four years after it started, the Academy is transforming the way that BP and its major project leaders approach and execute the company's biggest projects.
'The Academy has created a mechanism for change in the company,' says Cattell. 'It provides a forum for discussion among the leadership in the projects community about how projects are executed and how they should be executed.'
The course is making the major project leaders much more self-confident, says BP's Judy Wagner, director of the Academy. It is also creating a real sense of community among men and women whose jobs mean that most of the time they are widely dispersed around the globe.
'Many of them didn't even know one another prior to the start of the programme,' says Wagner. 'Now they have created networks in which they rely on one another for help, support and the sharing of best practice.'
That 'single project' mind-set is changing as project leaders begin to realise that where projects are sufficiently similar a more standardised production approach can mean not just lower capital expenditure and operating costs, but can often also result in bringing offshore fields into production earlier. The key, says Cattell, is that standardisation depends on people thinking more broadly than just about the single project activity they are engaged in at that moment, or about where the business unit's interests lie at that time.
To move from individual, customised design to a standard design that can be implemented many times over - using a supplier who understands what the company needs and provides it in a consistent manner - is a huge step forward.
'All this has occurred as a result of people thinking about it in the Academy, developing ideas on how to standardise equipment then taking the ideas across the company,' says Cattell.
Three-way learning
One of the main keys to the Academy's success is that it is not just a two-way collaboration between BP and MIT, but a tri-partite one in which the project leaders themselves bring their own considerable experience to bear on the problems they are asked to investigate. This is particularly evident in exercises like the interterms and also in so-called 'deep dives', where teams of students are provided with raw data and documents about a particular project, then asked to do an in-depth analysis of the underlying factors affecting that project, including technology risk, sources of value, leadership and others.Lauren Segal, BP's project director for the Crown Landing liquefied natural gas re-gasification terminal in New Jersey, USA, feels that learning from and with her peers has been a very powerful experience. She noticed that the learning experience changed between the first and second of her two-week MIT terms last year.
'It began to evolve from them teaching us - the "students" in the cadre - to them giving us some tools and a topic, and the students beginning to teach each other. To me, the most important aspect of the Academy is the way that the people in the cadre are learning from each other, thinking through the dynamic changes in the company and sharing their judgement of best practices.'
One area where the tri-partite relationship has proved especially fruitful is in the sessions on events like the Texas City refinery explosion and fire in March 2005, and the Thunder Horse incident later that year when a semi-submersible platform in the deepwater Gulf of Mexico listed over during Hurricane Dennis.
'These incidents, though tragic, offer opportunities for significant learning experiences for the cadres,' says Lessard. 'As my colleague Nelson Repenning stresses in his sessions, such major failures usually are the result of systemic issues and not just that so-and-so was a bad manager. The participants say: "We've got good people on these projects, so what went wrong? What drove the outcomes? What needs to be changed and how do we need to change?"'
Cattell, who led the Thunder Horse enquiry, says the Academy helps BP learn from such incidents and build on what has been learned. It was clear from the enquiry that serious quality faults had caused a lot of the damage.
'BP did not have a well developed philosophy for consistent management of quality in our projects,' he notes. 'Already though, three interterm projects have addressed the issue and graduates of the Academy are working on how to develop a quality management system that will work for BP.'
Room for change
The programme at MIT is evolving all the time to meet BP's needs and to lead change. Originally, for example, there was a session on negotiation, but that has now been replaced by a module called 'having difficult conversations', which can mean telling your boss things he or she may not want to hear.Mark Skelton, projects director for BP's Cherry Point refinery in Washington state, who attended the Academy in 2005/6, says that having difficult conversations is one of the project leader's responsibilities.
'Such conversations need to happen in a constructive way. The Academy helped us to develop an understanding of how to approach these conversations. It sounds simple, but when two people argue from an emotional viewpoint it's going to be difficult to reach a constructive outcome. You therefore have to be prepared to talk in terms of the data, you have to understand where your boss might be coming from and then adapt your own style and approach to manage that.'
Something that became clear about the Projects Academy very early on was that if BP was to improve project management, the company's senior managers would also need a better understanding of projects and their potential impact on them. At the design stage of the Academy, says Peter Duff, BP's senior advisor on the Academy, in-depth interviews revealed a tension between senior BP managers and the project leaders.
MIT believed that even if the project leaders were equipped with new tools and techniques and then were sent back into an unchanged organisation, the project leaders might encounter resistance to change, and applying their new skills might become a struggle.
The solution has been to educate BP's senior leaders so that they give project leaders the space to use their new skills. 'The Academy has devised three-day executive sessions - just to give them an idea of what we do and how they impact the leadership of the projects,' says Wagner.
Academy and beyond
To date about 125 students have graduated from the Academy. Around another 60 are going through the programme at this moment, and future programmes are already being planned to maintain the pool of highly experienced project leaders.In parallel with the Academy, BP is developing the Project Management College, which looks after the education of the 2000 or so project staff who support projects and can be a precursor to the Academy for some. The company is also refining the 'BPWay', a two week course that focuses on the nuts and bolts of how BP conducts its projects.
There may too be several new aspects added to the Academy itself, broadening its base to take a more detailed look at the engineering aspects of project leadership. The Projects Academy will eventually become a Projects and Engineering Academy. The watchword, says Wagner, will be relevance.
'We've got to remain relevant to BP's needs, because if we don't, there's no reason to be around.'
Encouraged by its positive experience with the Projects Academy, BP is now considering an Operations Excellence programme, modelled along similar lines, to help bring about a step change in the way BP operates its assets worldwide.
Whatever its future evolution, and whoever chooses to copy the concept - which is occurring in the wider industry - the Projects Academy has already proved to be, and continues to be, a positive influence in delivering improved performance and success for BP's major projects.
