Syed Aziz – Design Thinking for Innovation – September 5th, 2020

Example Reflection – Learning Launch

Context:

I am a Business Transformation Director at a major Oil & Gas company which has operations in 170  countries. My task was to develop a new Operating Model for Procurement and Supply Chain  Management (PSCM) Organization, to address feedback from business stakeholders. PSCM organization  has about 900 employees who are located across 14 regions in the world such as US, Canada, Trinidad,  UK, Azerbaijan, Angola, Egypt, Oman, Mauritania & Senegal & India. While the full scope of Operating  model project is outside the scope of this paper, I will describe the relevant elements here.

PSCM organization is responsible for Sourcing, Negotiating and Contracting for all Products and Services  that are utilized in the Exploration, Drilling and Production of Oil & Gas in the company, and they manage  all the resulting contracts as well as transactions (actual buying in the system).

Challenge:

What Is: In the existing model, each of the regions performed its own Sourcing & Contracting activities  based on the local demand. This process is not only inconsistent, but it does not allow for developing and  implementing best practices, scaling the business or for developing talent. This decentralized approach is  also not very efficient and effective. The feedback from business stakeholders was that the process of  sourcing & contracting is too long and has too process oriented, instead it should be fast, and business  focused.

What If/What Wows: After going through a complete design process over many months, reviewing many  concepts and options, our team created a new model that would centralize all Sourcing and Contracting  activities at two global hubs – Western Hemisphere Hub (Houston) and Eastern Hemisphere Hub  (London), this centralization will also be supported by the new Digital tool which will be used by the  Regional businesses to file Sourcing requests and track the progress.

The challenge here was that Sourcing & Contracting was majority of the job for some 900 people across  the globe, centralizing this activity will be hugely disruptive and will also result in the morale loss for the  staff. Secondly each of the regions have their own governmental requirements and governance steps that  have to be considered and can not be violated.

It is also important to recognize that by moving this activity from the regions to central hubs will also  require us to overcome human elements of fear, uncertainty and skepticism that it can be done centrally  without loss of quality and speed.

Selection & Application:

Our initial view was that once we have designed the operating model and the digital system is in place,  we can initiate the organizational change immediately. However, based on some preliminary reviews at  small focused settings it became clear that the wholesale change will not be accepted by the organization  and it will result in massive distraction for the business.

Syed Aziz – Design Thinking for Innovation – September 5th, 2020

It was then that we decided that to go fast, we will have to go slow and voila! We landed on the proof of  concept (MVP) approach or The Learning Launch as we call in this Design Thinking course.

What Works: But how do you do a proof of concept for an organization? we decided that there were  certain categories of Sourcing and contracting that were somewhat centralized and it will be relatively  easy to completely centralize that group (and transfer those people in the new central team at one of the  hubs). We also shortlisted a few ‘tricky’ categories where it will be challenging to centralize, we wanted  to do this to stretch the concept and see if it breaks.

Upon selecting a few categories, we announced the concept to the organization and solicited their  suggestions on how best to approach it as well. We confidentially spoke to the people who were going to  be moved to hubs and worked through the Human Resources nuances to carefully transition them to the  Hub team. Along with these individuals, we also moved their existing Sourcing & Contracting responsibility  to the Hub team, thus “seeding” the group with immediate responsibilities and an experienced team. This  team was then also tasked to develop the new processes to intake work (through the Digital workflow  system) and deliver the work most efficiently).

Insights:

Looking back this was the best decision we made, as expected as soon as the team was stood up, we had  naysayers all over the organization as to why and how it will fail. There was resistance in working through  the new process and transitioning work to this team. Since the team had brought their current  responsibilities with them, they were quickly able to gain credibility with the business stakeholders.

As expected, we did run into challenges related to work flow or better said flow of work – so the team  had to quickly step in and develop new agile processes to intake new demand, complete sourcing and  contracting while ensuring there is no gap in communication with the stakeholders and regional teams.  We also sorted out the quirks with the new digital system and improved the process even further.

During the same time, we unfortunately hit the COVID-19 crisis and that required us to adjust our  contracts and amend contracts with new safety clauses. This central team quickly stepped in and took on  that work, turning it around in record time demonstrating a 500% improvement in cycle time. This was a  huge credibility builder for the remainder of the organization.

Over a period of 6 months, this team meticulously absorbed the work from other teams, refined their  processes and delivered quality products.

Approach:

As mentioned earlier, the initial approach was a wholesale change without testing the new model, if we  had gone through our initial plan, we wouldn’t have been able to prove that the concept truly wows the  organization and that it works. I am fairly certain that it wouldn’t have, not because the concept wasn’t  sound or we didn’t have good team, the human factor and mental inertia from the organization would’ve  been too much to overcome.

What’s next:

We are gearing up for a full-scale launch and ramp up and by the end of this year the new team with  Eastern and Western Hubs will be fully in place.

