FOCUS 8
So where do businesses get it wrong?
From our work with multiple operators across the oil and gas value chain, businesses often signifi cantly under deliver on initiatives, failing to achieve their expectations in terms of fi nancial impact. Our work in the sector indicates the same issues coming up again and again:
(i) Use of blunt instruments and focus on short-term actions e.g. unsustainable top-down blanket budget cuts on discretionary spend rapidly unwind once management attention is diverted
(ii) Management ambitions are often limited by organisational and functional silos with personnel unable to take a view across the organisation, while being protective of their areas and worried about their personal careers
(iii) A belief that continuous improvement efforts will solve it all. Often management have ongoing continuous improvement programmes, which ‘whilst useful’ are unlikely to deliver true step change performance
(iv) Management get tied up in analysis paralysis rather than working on 80/20 principles resulting in delays to take action
(v) Management decisions are based on perceptions and individual priorities rather than a robust fact-base with a clear alignment to value
(vi) Management incentives and rewards based on idea-generation but feet are often not held to the fi re in execution
(vii) Relentless waves of initiatives effectively ‘carpet bombing’ the organisation in the hope that something sticks, resulting in duplicated efforts, organisational fatigue and an excuse to keep otherwise unrequired resources.
© 2013 KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and a member fi rm of the KPMG network of independent member fi rms affi liated with KPMG International Cooperative, a Swiss entity. All rights reserved.
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DRIVING VALUE
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