Monday, September 17, 2012

Global Leadership-Operational Excellence and Project Execution

As I mentioned last Friday, I intend to use Steve Coll's book on ExxonMobil as a vehicle to explore some dimensions of leadership.  Coll's book isn't about leadership per se, but does tell the story of ExxonMobil and in so doing I think some important leadership issues emerge.

Although one can tell from my bio that I worked for a competitor to ExxonMobil, I don't come to this subject with any real bias one way or the other.  I really don't know the company well...just know them as tough competitors. In the industry they had a reputation for excellence in project execution and an insular, not-very-transparent, somewhat rigid culture....points Coll makes very well.

At the very heart of what makes ExxonMobil work is their Operational Integrity Management System or OIMS.   You can read it in full at the attached link.

There are eleven elements to the OIMS.
1.  Management, Leadership and Accountability
2.  Risk assessment and management
3.  Facilities design and construction
4.  Information/documentation
5.  Personnel and Training
6.  Operations and Maintenance
7.  Management of change
8.  Third party services
9.  Incident investigation and analysis
10.  Community Awareness and Emergency preparedness
11.  Operations integrity Assessment and Improvement.

Each element has an underlying principle and a set of expectations.  In addition to the eleven elements there is a requirement for each operating unit to establish a management system(the required elements of the management system are also enumerated) to ensure all expectations are assessed and measured.

The entire OIMS is subject to periodic internal and external evaluation to include a scoring system.

As I mentioned in my 24 July blog entry a system like Exxon's OIMS is an important systemic barrier to errors and misjudgments.  It's also key to consistent execution and delivery of results.  Those who operate a global enterprise...particularly one with the technical challenges and inherent risks in the oil and gas business...  have to have something like the OIMS. There are a couple of comments to make from a leadership perspective.

First, creating such a framework in a company with over 100,000 employees and several hundred thousand other contract workers is no small task.  I don't know the history of OIMS in ExxonMobil.  I do know how hard it is to create a single, global standard that works in every business unit and every country.  Varying regulatory regimes and standards in different countries is one challenge to standardization. Increasingly global companies find themselves in joint ventures with multiple partners with divergent views on a standard.  Last but not least, it takes strong, confident leaders to overcome the "we're different... it's different here...those-in-Headquarters-don't-know-what-it's-like-down-here" resistance to change.  Creating a standard that is specific enough to be meaningful and flexible enough to work in all circumstances isn't's tough to find that balance and the difficulty cannot be overemphasized.

Second, you may wonder if such a system is so valuable, why a company like ExxonMobil, with their well earned reputation for secrecy,  would publish it in a public domain?  The answer is the value isn't in the's in the disciplined execution of the system the document describes.  I suspect they'd say, "We're happy to share it because we know we can execute it better than anyone else".  The competitive advantage is in disciplined execution and disciplined execution is a function of leadership.  Making sure the system is implemented and leaders at every level are held accountable is key to its effectiveness.

The bottom line is you have to be really good at whatever it is that you do, and you have to have a systemic approach to ensure you can do it every time, in every country, in every circumstance.

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