The Case of ChevronTexaco Driving operational excellence through Communities of Practice

The Case of ChevronTexaco

Like many organisations, ChevronTexaco has had informal communities in place for a

number of years. Taking the drive for improved health and safety as a starting point,

Jeff Stemke explains the company’s decision to develop a more formal approach to

community development, in turn outlining some of the success stories that have helped

to justify the central role networks now play.

Context

Operational excellence (OE), one of ChevronTexaco’s central business strategies,

focuses on building world-class performance in safety, health, working environment,

reliability and efficiency. Our objectives are to:

 Achieve an injury-free workplace;

 Identify and mitigate key environmental risks, including eliminating spills and environmental incidents;

 Promote a healthy workplace and mitigate significant health risks;

 Operate incident free with industry-leading asset reliability;

 Maximise the efficient use of resources and assets.

Safety is a shared value at ChevronTexaco. We want people to go home safely every

day. To deliver and sustain high levels of performance, we must engage employees

throughout the organisation to develop a culture where everyone believes that all

accidents are preventable and that the reality of ‘zero incidents’ is a real possibility.

We can also significantly improve reliability and efficiency by avoiding unplanned

events, reducing disruptions from external events, and more effectively scheduling and

optimising planned downtime. This requires an understanding of critical systems and

processes, and the people involved in them, to identify recurring problems, their root

causes and corrective measures.

The role and structure of networks

Networks are a critical component for connecting our people, processes and culture to

achieve OE objectives. ChevronTexaco sponsors a number of global networks in areas

such as health and safety, exploration and production, refining, and information

technology. These networks have proliferated significantly since our recent merger as

we explore ways to integrate our varied cultures, businesses and work processes into a

new, seamless organisation of 53,000 employees operating in 180 countries.

We have identified three types of networks in the company. The most common type is

the community of practice. It connects people with similar skills or work

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responsibilities. Each network/community typically has a leader and voluntary

membership. They differ in accountability, sponsorship and funding, and in the ways

members interact (from annual forums to collaborative websites, document libraries to

regular teleconferences). These networks help members locate and consult with

experts, find solutions to common problems, share and adopt successful practices and

lessons learnt, and suggest improvements to current tools and processes in their

domain. Our directory currently lists over 100 such communities.

Groups that focus on critical competencies and core processes may use a more formal

or ‘strategic’ network structure. These networks have formal charters and annual

operating plans, business unit (BU) sponsors, selected leaders and core-team members,

with performance agreements, network funding, clear deliverables and metrics.

Regular teleconferences, workshops and moderated collaborative websites are also

part of the network operations. We have assembled an online toolkit that guides a

group in the design, launch and sustain phases of the network lifecycle. The toolkit

contains example documents and processes contributed by existing networks. We also

provide networks with facilitators, who work with new communities to accelerate the

design and launch phases. For example, I personally helped the OE networks get

started. Nobody on the corresponding project team knew much about a network, so the

facilitation helped them to get their feet on the ground very quickly. The upstream and

downstream networks have all used facilitators in the same way. There are currently

over 30 of these networks either already launched or in design.

A third type of network is an organisational unit that provides expertise in a specific

domain to the corporation – effectively internal consultants. We class these

associations as networks because members fulfil the typical roles of a network core

team. Interestingly, a growing number of our global BUs are using the toolkit to

organise as virtual teams with distributed responsibilities and work processes.

Networks have been developing for some time within the organisation. Like many

companies, we have had informal networks in place for a while, usually made up of

technical specialists who meet to help each other solve problems or discuss new ideas.

In the early 1990s, we formed some of the first strategic networks for refining good

practices. They were created in much the same way as the OE networks outlined

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above. In the mid-90s we launched a number of informal communities of practice

based around technical specialties. But after a few years of operation we saw that we

weren’t achieving all the value we expected. Today’s OE-network model contains

some of the key value-driving success factors and we use what is appropriate from the

toolkit as we design and launch new networks.

Each type of network has its own level of resources in terms of senior-management

support, corporate funding and people.

For the strategic OE networks, senior-management support was the critical first step.

The need for the networks was identified by managers at this level and they have

continued to champion them. Since these networks were perceived as critical and had

specific deliverables, they obtained corporate funding. This is largely allocated to time

spent by the moderator (a 25-50 per cent commitment during the initial network

phases), core-team experts, whose time is billable, and to a lesser extent a knowledge-

management facilitator. Network members were selected by their local managers and

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are expected to make participation a part of their job, so no extra funding was

budgeted. Our less formal communities also typically receive funding for a moderator,

teleconferences and a website. Many of the newer communities have had charters

approved by management, but active management engagement is less visible.

Inside an Operational Excellence (OE) network

As part of ChevronTexaco’s focus on safety, we have created five strategic networks:

Motor Vehicle Safety (MVS); Contractor Safety Management (CSM); Repetitive Stress Injury Prevention (RSIP); Reliability Improvement (RI)

OE Champions

These networks started as traditional project teams chartered to develop guidelines to establish a consistent approach to addressing risks and opportunities common to

all ChevronTexaco organisations. However, project-team involvement typically

decreases as a project enters its deployment phase. Our Health, Environment and

Safety (HES) Steering Council realised that there was a continuing need for a group

to speed implementation and continually improve the recommendations and tools of

project teams. We therefore transformed the project teams into networks, expanded

them to incorporate members from a range of business units and chartered them to:

 Provide rapid connections between people with questions and those with the appropriate knowledge and expertise;

 Enable and accelerate effective, efficient and timely sharing and adoption of value- adding practices, lessons learnt and new technologies;

 Provide a link to internal and external information sources such as databases, previous studies and benchmarking data;

Why did Ecuador sue Chevron?

 
 
In 2011, an Ecuadorian judge ordered Chevron to pay $18.2 billion for “extensively polluting” the Lago Agrio region in the Ecuadorian Amazon. Ecuador’s highest court upheld the verdict a year later. However, it reduced the amount of compensation to $9.5 billion. Chevron never complied with the ruling.
 

Who won the Chevron Ecuador case?

Steven Donziger, the environmental and human rights lawyer who won a $9.5 billion settlement against Chevron over oil dumped in Indigenous lands in the Amazon rainforest, surrendered himself to the federal authorities on Wednesday to begin a six-month prison sentence

 Enhance the retention of knowledge within ChevronTexaco.

Mid-level management support and sponsorship are critical to a network’s success.

These managers work with subject-matter experts to develop the business case,

nominate a sponsor, help select a leader and core-team members, collaborate with the

network leaders on the charter and operating plan, review progress periodically and

engage peer management to make sure the right people are active network members.

Each network also has a senior-executive sponsor who helps establish the vision,

strategic goals and expected value for the business, assists with acquiring resources

and funding, and looks for ways to gain visibility for, and promote the value of, the

network. Each network’s charter and annual operating plan contains the following

elements:

 Purpose, scope and business case;

 Network goals and deliverables;

 Roles, responsibilities and expected time commitment;

 Network membership and typical member profile;

 Governance;

 Budget;

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 Metrics (process, behaviour and results measures);

 Schedule of activities (monthly teleconferences, workshops, progress reviews).

For example, the Contractor Safety Management (CSM) network has short-term goals

focusing on communication and implementation support:

 Share successful practices, lessons learnt and challenges faced;

 Educate business units about CSM team deliverables;

 Assist BUs with deployment plans (implementation, logistics);

 Develop fluency in operating the network;

 Provide network access to external contractors.

To sustain world-class performance in contractor safety, the network has longer-term

goals focusing on understanding gaps and problems as well as improving practices:

 Maintain and develop standards over time. Proactively identify gaps in the system and develop new practices;

 Develop leading indicators that are predictive of success;

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 Identify what is not working for business units and contractors, and improve implementation effectiveness;

 Identify, validate, transfer and apply new ideas, innovations and technologies.

Network metrics

The OE network’s main objective is to help business units close performance gaps and meet corporate expectations. Metrics that serve as leading indicators of corporate-

safety performance will help the networks adjust their focus or guide members on

practical intervention methods. Since explicit results will take time to materialise, we

also have measures for process and behaviour.

Results

 List of estimated benefits (members describe benefits gained as a result of implementation of a programme, use of a tool or the development of a new practice);

 Pilot project reports (engagements with BUs to create an implementation plan);

 Top-three shared ideas or improvements each quarter.

Process

 Percentage of BUs using the network’s tools and guidelines;

 Number of pilot programmes;

 Number of discussions between network members and BU leadership;

 Survey of perceived value of networks by members and stakeholders.

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Behaviour

Participation statistics (number of members, conference calls and so on); Website usage statistics (items shared, documents read, questions asked and

answered). Monthly teleconferences are an important part of the network’s practice. A

typical two- hour agenda covers such issues as corporate-safety performance and

network-metrics reviews, news of serious incidents and actions taken as a result,

instances of successful practice sharing, as well as time for open dialogue and

questions and answers.

The core team meets prior to the general membership teleconference to plan the

agenda and solicit contributions. The team also conducts periodical one-on-one

interviews of members to better understand their issues and interests, as well as to

collect information on the use of recommended guidelines and tools. Each network is

supported by a collaborative website, which is open to all employees and is used to

publish successful practices, discuss issues, ask and answer questions, post meeting

agendas, track actions, and retain guidance, tools and other subject-matter specific

documentation.

Success stories

Upstream Networks

‘Seek, share and adopt’ is the mantra of the Technology Rapid Execution (TREx)

networks, which help ChevronTexaco’s exploration and production (upstream)

business units develop effective technology-investment strategies and solve day-to-day

operating problems. Capital and operating costs for the front end of our value chain are

tremendous. This provides a large incentive for technical and operations staff to

connect and transfer knowledge on cost-saving and performance-improving

technology innovations.

TREx has two interrelated components: platforms and networks. A platform consists

of a small group of people responsible for crude-producing assets that have common

technical and operational challenges. Example platforms include heavy-oil assets,

shallow-water assets and exploration. Each platform has a technology-management

team made up of people from operating BUs and the organisation’s technology

company, who meet regularly to identify and prioritise common challenges. This team

is guided by a decision-review board, which endorses technology strategies and

approves resources for technical projects.

Across upstream, 23 technical networks are being created. They are divided into four

subgroups: sub-surface characterisation, reservoir management, drilling and

completions, and facilities and operations. Once an opportunity is identified, network

members are able to efficiently seek input, share experiences and adopt proven

practices. Global communication is facilitated by web-based tools, contact lists and

occasional in-person workshops.

One example in particular illustrates the value of the rapid communication enabled by

the networks. One of our BUs received an incident report from a partner operating an

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oil field. While completing a well, a service contractor was preparing a perforating

gun, which is used to shoot holes in the well casing to allow for gas production. An

electrical problem caused the gun to fire prematurely, resulting in significant damage

to the well. Immediately, three people in the BU entered the report into both the

Drilling and Completions and the Formation Evaluation e-mail networks. Two well-

logging specialists received the note.

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Aware that the same type of job was planned at another location, they contacted an

employee at that unit, who stopped the perforating operation and postponed the work

until his team could address the issues that had arisen. In just four days, the report had

been filed, noted and actioned, potentially saving the company some $30 million.

Global Refining Networks

‘Quality answers in minutes, not days’ is one mantra of Global Refining Knowledge

Management (GRKM). Prior to our merger, Chevron had created a number of good-

practice teams that recommended process equipment, process-operatingimprovements

and shared subject-matter expertise for our US-based refineries. With the additional

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sites outside the US, the merger more than doubled the number of refineries in our

system. As well as expanding the good-practice teams, we realised that the new

refineries were not familiar with, and had difficulty reaching, our technical experts.

The refining leadership team championed the development of a global network to

connect technical experts, refinery engineers and operators, to enable them to search

for answers or ask questions concerning day-to-day operating problems, to share

successful practices and to find a wide variety of refining knowledge in a single

location. To ensure quick response to urgent questions, the web-based portal features

an email-enabled process that directs questions to a subset of over 900 members who

have registered their willingness to provide answers in a few of over 200 subject

categories. Usually, a question receives four or five responses within 24 hours. But if

no answer is submitted, the question is escalated to technical experts who are

responsible for the subject area.

A typical example illustrating cost and time savings involved a recent weather-induced

problem in one of our processing units. A lightning strike caused problems with

instrumentation, leading to a higher feed input and resulting in sooting of the catalyst

bed. The unit’s engineer looked for suggestions to remove the soot and reduce the

resulting pressure drop by posting a question on GRKM. By the time he got to work

the next day, he had received four replies, from an operations superintendent, a

process engineer, a process advisor and a process technical expert, each in a different

location. Based on their feedback, he developed a workable plan to correct the

problem and re-use the catalyst, saving $100,000 and at least a day of research time.

Another example illustrates the potential value of proactive sharing of successful

practices. A catalytic process unit was experiencing fouling of a wet-gas compressor.

The process team tried an online water-washing procedure that hadn’t been used

before. The procedure successfully removed the fouling and avoided a costly

shutdown. The team estimated the potential savings from re-use at $500,000 and over

80 hours of labour. The unit’s engineer commented, “I especially like the global aspect

of GRKM. I’m very used to sharing information with the US refineries, but this really

has opened the door to contacts around the world.”

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In the past few months we have documented many similar examples that have

contributed to operational excellence with multi-million dollar cost savings and

avoidance of incidents and lost production.

Ongoing challenges

Although many of these networks are new, they are already making significant

contributions to operational excellence. We still see gaps in the level of participation

and accountability of members, as well as in the level of support from, and in the

engagement of, business units. As such, there are a number of challenges we are still

looking to address.

Documenting and communicating network successes is an ongoing issue. Many of the

networks already have metrics that include reporting successes involving knowledge

transfer. We will continue to court managerial sponsorship, in the hope of securing

opportunities to tell those stories at management and employee meetings. We will also

become more active in publishing the stories on our corporate intranet. Success in this

area will also help in encouraging and reinforcing members to use network

connections as a part of their normal work process.

A further challenge lies in improving the skills of our network leaders. Two specific

objectives have been set for 2004. One is the network of network leaders. The second

is to identify a practical curriculum in running virtual teams or networks.

Similarly, educating senior management on the importance of networks for short-term

(improving operational excellence) as well as long-term (retention and knowledge-

transfer to new employees as senior staff members retire) benefits remains a

continuing task. The OE-network value proposition is well understood by senior-

management sponsors, and they have been given responsibility to communicate these

successes throughout affected parts of the business to encourage more active

participation.

As for the future, our network model is clear. As more of the company’s managers

understand the value they provide, networks can only proliferate. Indeed, this is

already happening today. Networks will no doubt become an even more valuable tool

for dealing with knowledge retention and transfer, eventually extending beyond the

company itself. The potential contribution they will make to ChevronTexaco as a

whole is truly enormous.

Jeff Stemke is a knowledge strategist for ChevronTexaco’s information-technology

company. He can be contacted at jeff.stemke@chevrontexaco.com

This article was originally published in Communities of Practice Lessons from

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