OPEX: core values and personnel
Thoughts from BP’s Hugo Ashkar
"We are not currently getting the maximum out of our enterprises, or the targets that we set ourselves in the industry," says Hugo Ashkar, Risk Manager for the Global Project Organization at BP. Within his upstream section of BP alone there are three operating entities and seven functions – each with a separate set of targets.
For him, operational excellence cannot begin once an organization has embarked upon a project or scheme, but has to be woven in from the planning phase. With each of these three entities striving toward a separate OPEX target, it must be incredibly difficult to infer how one target, or one missed target, affects the other bodies within the organization.
A range of suggestions
Hugo is speaking at the recent OPEX in Energy, Chemicals, and Resources event in London, fielding questions from a panel of representatives from firms as varied as Total, Thames Water, and Siemens. The first question to come up is one of endpoints – how do you define the point at which you have achieved an OPEX target? Cost is an obvious marker, Hugo believes, while measuring the number of customer complaints is too slow, reactive, and lagging.
The delegates in the room going to agree that striving for constant improvement may be preferable to chasing targets – a proactive and ongoing measurement which allows you to achieve a series of OPEX targets on a monthly basis.
Another question, this time about the extent to which he believes embracing technology is important.
“It depends”, says Hugo, perhaps a surprising answer, which he illustrates with an example from within his own organisation:
A new upstream CEO was appointed and initiated a “modernisation and transformation” scheme, but, like some of his colleagues, he was unsure of what exactly that meant for this particular organisation and leader – something that doesn’t sound like it was defined properly for quite some time! He goes on to speak about his role. How he “streamlines processes so they can be modernised”, and how he strives to “make the process lean and then layer the digital revolution on top”.
See also: A practical guide to OPEX modelling.
It’s clear how difficult that job must be if nobody is singing from the same hymn sheet.
I catch Hugo after the discussion and ask him a few more questions; ask him if he thinks that the human element really is a boundary to OPEX success. No, is the answer. “With the advancement of personnel care”, he says, “we may be facing an instance where we have four generations of a family working in the same industry”. He smiles at this – it is still a little unusual, even for him. He goes on.
“Not necessarily in the same company, but in the same industry – and at the same time, the newer generation of employees have a different perception of longevity at work than my generation has, for instance. So a good company has to adapt to that.
“Their processes have to be nimbler than before, and adapt to the evolving workforce, and the high turnover rate that we expect will happen. That’s one thing. The second thing is that we have to be able to adapt to the wide generational span within the same companies.”
So is turnover higher at the moment?
“It is hard to predict but I expect it will be with time. I would say five to ten years – it will increase.”
Core value structure – does there need to be a shift?
One other thing struck me during my time listening to Hugo speak, and that was the prominence given to core value structures. It seems obvious now, but at the time, I thought he would explain to me which values were important to OPEX. Instead, he explained that “core values are the culture of a company” rather than a set of targets.
“Depending on the industry you’re in – they’re going to be unique to you. For instance, people who work in high-hazard industries will use safety as one of their core values – and that’s understandable, because we play with things that go boom!”
So does he think that we need a paradigm shift in culture? That oil and gas companies need to get with the programme, as it were?
“I think the shift is going to be in the application of the core values. How do you go from a core statement to an annual operating plan? How do you go from an annual operating plan to an individual core value objective statement?”
I nod, and reiterate – does he think that this is where the lion’s share of progress needs to come from?
“How do we measure my performance as an employee against an annual operating plan, and how does that annual operating plan align to the core values. I think that’s the work to be done. Some of it has developed but not all of it.”
If you enjoyed this article, you might be interested in our ebook on OPEX, bringing a fresh perspective to another element of this huge topic.