Continuous Learning:

Learning Organization

Case Study:  British Petroleum (BP)

Unleashing the Power of Corporate Learning

By: Vadim Kotelnikov

Founder, Ten3 Business e-Coach Inspiration and Innovation Unlimited!

 

"The biggest single source of sustainable competitive advantage in the future will be our ability to create and mobilize knowledge in the interest of new products and services."

~ Kent Greenes, Knowledge Management Team Leader, BP Amoco

    

Framework

of the BP Knowledge Management Methodology

  1. A learning cycle before, during and after any event supported by simple process tools

  2. The lessons arising from the learning loop are agreed and distilled by a community of practice peers across the organization who have a stake in agreeing and defining BP's best practice.

  3. The lessons both specific and generic are incorporated into "Knowledge Assets" on the corporate intranet, where they represent a living focus for BP's experience around strategic and operational areas.

 

 

Action Plan for Competitive Learning

By: John Browne, former CEO, British Petroleum

  • Anyone in the company who is not directly accountable for making a profit shall be involved in creating and distributing knowledge that the company can use to make a profit

  • Our philosophy is simple: Every time we do something, we should try to do it better than the last time

  • No matter where the knowledge come from, the key to reaping a big return is to leverage that knowledge by replicating it throughout the company so that each unit is not learning in isolation and reinventing the wheel

  • We must view relationships as a coming together that allows us to do something no other two parties can do, and that is make the pie bigger, to our mutual advantage

 

Dual Citizenship

The need to share and learn drives staff towards dual citizenship:

Co-evolving With Internal and External Players

  • Internally, the organization co-evolves with each business unit, department and function.

  • Externally,  the organization co-evolves with its customers and suppliers.

Global Leader in Knowledge Management (KM)

British Petroleum has a worldwide reputation for commitment to knowledge management (KM).

 

The knowledge management methodology pioneered in BP's is encompassed by a simple framework, which describes a learning cycle before, during and after any event which is supported by simple process tools. The lessons arising from that learning loop are agreed and distilled by a community of practice. Finally, the lessons both specific and generic are incorporated into "Knowledge Assets" on the corporate intranet.

Benefits

The business benefits of applying a consistent approach to knowledge management have been significant. BP business managers attributed hundreds of millions of dollars of added value as a direct result of using this approach.

A practical example of this has been in the cost reduction in the construction of European retail sites:

At the beginning of 1998 a challenge is set of reducing the build costs of retail sites in Europe by 10%. The Alliance (a joint venture between BP and Bovis) is responsible for the management of these activities in Europe. The Alliance was engaged in the benefits of knowledge management and invited the BP KM Team to help them achieve this outcome. Step change in costs was delivered in 1998 (savings of $74 million) due to the harvesting and sharing of knowledge between the project engineers in Europe. This gave BP Downstream Retail competitive advantage in the Mature European Marketplace. This knowledge is now also being leveraged on a global scale by project engineers in Venezuela, China, Poland, and Japan.3

Similar examples of increased performance have come from BP's KM application in speeding up business restructuring, developing new oil & gas fields, improving plant productivity and accelerating new retail market entry.

The Role of Top Leaderships

John Browne, former CEO of British Petroleum is an outspoken enthusiast of the power of corporate learning. From his perspective, learning provides the catalyst and the intellectual resource to create a competitive advantage. "In order to generate extraordinary value for shareholders, a company has to learn better than its competitors and apply that knowledge throughout its businesses faster and more widely than they do. The way we see it, anyone in the organization who is not directly accountable for making a profit should be involved in creating and distributing knowledge that the company can use to make a profit," says John Browne.

Browne has developed an action plan for competitive corporate learning to spur changes in people's attitudes and ultimately formal and informal rules that govern the organization's behavior. "The wonderful thing about knowledge is that it is relatively inexpensive to replicate if you can capture it. Most activities or tasks are not onetime events. Whether it's drilling a well or conducting a transaction at a service station, we do the same things repeatedly. Our philosophy is fairly simple: Every time we do something again, we should do it better than the last time," says John Browne.

Virtual Teamwork Project

BP Exploration (BPX) was reorganized into 42 separate business units. Then, BP launched the Virtual Teamwork Project (VTP), its first major KM initiative. The aim of VTP was to encourage the sharing of knowledge and to motivate the business units to utilize IT tools to improve their business. The VTP was designed to enable employees to share task-specific knowledge and develop partnership relationships with the employees of other units. Later the company launched a series of KM initiatives, which yielded excellent financial results for its business operations. Following the successful implementation of VTP, BP launched various KM tools such as Peer Assist, After Action Review, BP Connect, Retrospect and Human portal.

Knowledge Management Team (KMT)

BP became one of the first few companies to treat KM as a separate discipline when it established a Knowledge Management Team (KMT) in 1997. John Browne, British Petroleum's has a personal interest in the subject, and established KMT to champion and harness the benefits of organizational learning both within and across its flattened hierarchy.

Peer Groups

In order to integrate the efforts of the business units engaged in the same business activities, they were organized into peer groups. They met periodically to discuss the performance of their businesses. The purpose of the reorganization was to facilitate knowledge sharing and build synergies, i.e. to exchange knowledge and synergize creative capabilities and expertise of the employees working in different business units of BP.

Enhancing Organizational Capability

To enhance organizational capability, BP reduced or removed central functions, and business units were empowered to chose their own routes to implement changes. A flat organization was established. The number of management levels was reduced from 13 to 5... More

SYNERGISTIC ORGANIZATION (Ten3 Mini-course) - How To Build a Modern Winning Organization

 

 

References:

  1. "Unleashing the Power of Learning: An Interview with BP's John Browne", John Browne and Steven E. Prokesch, Harvard Business Review

  2. "Extreme Management", Mark Stevens

  3. "KM & British Petroleum," SAIC

Mini-courses:

  1. Synergistic Organization, Vadim Kotelnikov

  2. Inspiring Corporate Culture, Vadim Kotelnikov

  3. 3 Strategies of Market Leaders, Vadim Kotelnikov