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Teekay Case Study
A services provider to the offshore oil industry begins an exciting new chapter
Situation
A leading international midstream services provider (i.e., storage, processing, and transportation of petroleum products) to the offshore oil production industry was grappling with several critical realities that compromised its ambitious growth strategy.
- The CEO was averse to holding people accountable. In effect, the CEO preferred to rely on people’s sense of personal responsibility.
- There was no reliable process for assessing employee effectiveness, essentially preventing meaningful development and accountability.
- There was a pervasive lack of clarity regarding which roles were accountable for ship performance: i.e., onshore vs. offshore.
- A major ship construction project required strategic business-unit (SBU) level capabilities, but it was driven by a lower-level engineering manager subordinated to another SBU-level manager.
The company was comprised of 56 offshore assets, including floating production, storage and offloading units, shuttle tankers (including six new buildings), floating storage and offtake units, long-distance towing and offshore installation vessels, and a unit for maintenance and safety. The majority of the company’s fleet was employed on medium-term, stable contracts. The company had consolidated assets of approximately $5.2 billion.
Solution
Strategic Organization™ consultants worked to solve these realities by addressing the following structural issues:
- Helped separate shared services from the corporate parent and designed new finance, IT, etc., functions;
Applied Strategic Organization™ design principles to the corporate and three SBU entities to enhance capability, efficiency, and accountability;
- Clarified the accountabilities and authorities for functions shared by the SBUs; and
- Clarified the organizational structure required to effectively manage major capital-intensive shipbuilding projects.
In addition, Strategic Organization™ consultants supported the systematic assessment of talent with the goal of ensuring the optimal fit of people to newly defined or newly created roles. They also developed recruitment and succession plans aligned with strategic talent requirements.
Value Provided
By implementing a systematic Strategic Organization™ transformation, the company was able to get back on track with its growth strategy. Specifically, they:
- Helped develop and implement systems supported by more effective managers who were held accountable for leading effectively;
- Resolved the major project issue by careful reassessment of the complexity of work required and the authorities in relation to that function by the SBU heads; and
- Eliminated several layers of management that didn’t allow for optimized developmental opportunities. This delayering also provided considerable cost-saving to the company.