Every re-org for decades Chevron has managed to amp-up the matrix element of the organization which blurs lines, confuses priorities and vastly adds cost and complexity. Asset classes is the ultimate matrix and looks to be the ultimate disaster. In locations with multiple asset classes it will be very messy with completely different reporting lines for different classes - Africa shelf vs deepwater for example. Who will the country manager report to? Which asset boss will she seek to please when priorities clash? We will struggle with this for 4-5 years then give up and revert to geography I reckon.
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Makes sense to me. Your examples of dealing with NOCs/governments in a country with multiple streams isn’t a hard problem to solve. Those dealings are mostly BD, commercial and government affairs items. In fact, we already manage them differently in upstream and downstream within countries. The current structure in OPG is stream then region. Asset class in between stream and region (or instead of stream) allows for more focused innovation on common challenges, clear accountability on asset performance, leveraging scale to capture cost synergies, increased standardization. The current model has been in place for decades. As the current leaders keep saying, ‘We need to break some eggs’.
Microsoft doesn’t have a platform/chapter model… lol
@cd, Microsoft use a platform/chapter model similar to the one we copied and are also decimating us on every conceivable financial measure.
Just because another company does something does not mean it is the cause of their success. Nor does replicating what another company does guarantee success.
Maybe we should spend less time fixated on our organizational structure and copying the strategy of others, and more time on actual original strategy and innovative thinking?
Exxon is far more centralized than Chevron and yet is kicking our butt in just about every way. Maybe the BUs need to realize they aren’t all as special and unique as they think they are.
The pendulum swings
Centralization takes away ownership and creates the problems we face today. The ones who knew the area, the process and the equipment have been moved out to provide support for everything and for everywhere. Unfortunately, tribal knowledge is taken for granted and the quality of work suffers.
When your benchmark setters are typically independent basin pure plays, you need to question the value/effort you put into standardizing vs enabling a dynamic business.
This is one of the more foundational issues of the era.
A field in deep water Nigeria has a lot more in common operationally with a shelf asset in Angola than it does a deep water GOM field.
It’s hard to care one way or another when I know I will soon be gone, but Chevron’s hyper fixation with standardisation and repeatable process at scale will be its undoing.
It’s apparent that the people making these decisions completely fail to realise the the effort in making processes sufficiently generalisable to standardise, and then attempting to adapt the standardised processes to local conditions, is actually less efficient than just having fit-for-purpose local implementations instead.
Chevron’s problem is that it values processes over people. They seem to truly believe that with enough engineering and controls, people become completely replaceable and interchangeable - completely commoditised. Whereas they should be focussing on employing and smart, capable people who can adapt and work effectively and safely without process.
I swear, the more people tell me how to do my job under the guise and efficiency and scalability, the less efficient I become because the standards are so divorced from reality, and so abstract as to be meaningless.
its pretty easy. The people that come up with this model are the people in over graded staff functional jobs that are positioning themselves while the folks in the trenches are occupied getting the washing out. We should fire all individuals who have been in staff jobs the last 5 years. They're not experts and in most cases parked employees.
I agree, the problem is, whoever is advising Mike Wirth is just giving him bad ideas. Chevron is on this mantra of centralization and standardization, an example, Wirth probably think since we have all the data in the cloud and anyone can access it, that the business should operate the same globally and use the same canned reports, rt? But Singapore operates differently vs Richmond vs SASBU and et cetera. The way this should work is we have one central repository for data and business units should be able to access it and slice and dice what they need, however they want (nimble, speed, adapt), however, Mike and team have this myopic view of the same everywhere which is a really bad idea, so trying to beat the competition he actually handicaps us and makes us work through these awful central teams. Anyway, I don’t really even give a sh-t anymore, we have normalized lunacy, bad ideas and awful managers, I do most of my work on spreadsheets to get the job done, it’s fast, nimble and I can slice and dice it any way I want. I do dread the day upper management and IT and that god awful Global Advisor group finds out, then it’ll be a painful time.