History Offshore: A capital project faces crisis, rises to the occasion

The Work

When a multinational energy company established an alliance to design and build an offshore oil platform, the effort was off to a promising start. The alliance partners had a highly ambitious plan to construct the platform base and support columns from concrete so that oil could be stored in them.

This would require towing the structure thousands of kilometers by sea from the construction facility to the oil field site. With millions of dollars at stake every day, the effort got underway quickly.

Although it was the first venture of its kind in Australia to take a collaborative approach to a capital project, alliance leaders carefully followed the lead of alliances in other parts of the world. They held partnering sessions, agreed to share both risks and rewards, said they would conduct themselves transparently, and committed to working together to address any obstacles in a no-blame, “win-win” culture.

Then three months into the effort came something much more than an obstacle—a catastrophic breach of the casting basin retaining wall, resulting in the loss of the existing casting work. The project was suddenly three months behind schedule. The setback prompted reactions from alliance partners that were far from the agreed-upon alliance principles. Certain partners were blaming others for the disaster, and their lawyers were reviewing contracts and preparing to seek damages. The future of the venture was in serious jeopardy.

A senior executive from the company was determined to salvage the operation and set out to convince the partners that rather than revert to traditional behaviors, they should rely on their alliance principles to address the dire circumstances.

JMW had been hired to support the delivery of the project, and in the face of this major problem realized a powerful intervention was needed to prevent the alliance from disintegrating. Through a series of facilitated discussions and leadership development sessions, the alliance leaders came around to a collective agreement that they would set contracts aside and return to the “win-win” culture they had agreed to at the outset.

With that all-important commitment in place, the work with JMW continued, expanding to include development sessions with middle- and lower-level managers as well as one-on-one coaching of leaders integral to the effort. Then, with the deadline for delivery still in jeopardy, partners on the construction side of the project began to advocate for innovations that could accelerate progress.

For example, one construction manager introduced the notion of commissioning the concrete base of the structure one floor at a time, the way it is typically done with structures on land. Such ideas were initially rejected by the oil and gas alliance partners, who cited the manager’s inexperience with offshore oil and gas projects. But after facilitated conversations adhering to their alliance principles, partners who initially resisted certain innovations were able to look beyond any industry bias and agree that the proposals had merit.

The alliance not only recovered from a daunting setback early on, but proceeded to innovate and accelerate progress, saving both time and money in ways that couldn’t have been predicted at the start of the work. They ultimately delivered the project three months ahead of schedule and $50 million under budget. The alliance partners’ joint decision to come together to overcome their first big setback turned out to be a watershed moment.

In the words of the company’s senior executive who took a stand for the alliance:

The alliance didn’t start when we signed all the contracts and made the agreements. The alliance actually started when we made the decision to really work together to overcome that initial setback. From that point forward, the culture of the project changed completely—to truly match up with our aspirations to work collaboratively….JMW really guided us through that defining moment.

Case study PDF available upon request.  Please contact Jamie Tiska.