PILOT / DTI Business to Business
Mentoring Initiative
CASE STUDY
PHASE 1
October 2000 – May 2002
MENTOR
George Thomson, Shell UK
MENTEE
Phil Murray, Petrotechnics Ltd
Business 2 Business - CASE STUDY
Aim
The following report provides a formal close out summary of the experiences from the
Petrotechnics Ltd – Shell UK Exploration and Production (Shell Expro) pairing progressed as
part of the DTI sponsored business to business (b2b) mentoring initiative run throughout
2001.
The report follows a defined format as requested by the DTI. Although this report signifies the
close out of the matched pairing it is expected that there will be further continued dialogue
within the relationships established from the initiative.
Background
Mentor:
George H. Thomson, a senior engineer with Shell Expro, with over 20 years experience in
offshore structural, pipeline, subsea and marine design, construction, operations and
maintenance. Interested in learning how to help SME company grow business, whilst
achieving some personal growth. A specific request was to be involved with a company in the
e-business sector.
SME:
Petrotechnics Ltd, a small, strategic e-business process company, successfully established
for over 10 years, specialising in integrated web-enabled safety management systems with
majority of work undertaken with one major Operator. Interested in widening customer base
and diversifying their market. Requested a Shell Expro mentor to gain better understanding of
how to tailor their products and services to deliver sales to a wider client base.
Relationships
The first objective for both parties was clearly achieved through the “arranged marriage”,
facilitated by the Urquhart Partnership. A lot of time was then invested between the mentor
and two directors, in 1 – 1 meetings to clarify requirements & expectations, agree a plan and
to build & establish trust.
Open and honest communication was critical to identifying and understanding the challenges
and opportunities within each organization. Initially, progress was slow until it became clear
that the DTI had few specific expectations, preferring to rely on each pairing to agree their
own objectives.
The strength of this initiative was that it enabled organisations to build working relationships
through the specific individuals involved.
Process
A good discipline of weekly meetings achieved early understanding of objectives, although
this discipline lapsed during the summer months and around year-end, when other business
requirements took priority. The lack of face-to-face contact during these periods did not
detrimentally affect the relationship.
After the objectives were agreed, the 1 – 1 meetings tended to progress mostly around
strategic issues, either within Petrotechnics Ltd, or within Shell Expro. A monthly review was
carried out against the action logs. It soon became evident that the more ambitious objectives
would not be achieved quickly, due to many varying and changing circumstances, so the
conclusion was that progress was going to be evolutionary as opposed to revolutionary.
Flexibility was maintained throughout and the objectives were refined over time to address
these changing circumstances.
The Mentor & Mentee (M & M) club meetings were very effective, although they tended to be
over ambitious at times. One thought was that more free discussion time around key topics
should be allowed. Any analytical work could then be done off-line to determine what actions
could be addressed which would deliver benefit to wider industry. The web-site was a good
communication proposal, although it tended to be used more for DTI meeting notifications
than general sharing, primarily because each pairing was probably more focused on their own
learning than wider sharing.
Lessons Learned / Achievements
Some of the more significant achievements and learning opportunities from this relationship
are summarised below, firstly against the respective defined objectives and secondly against
perceived common industry issues. These issues require industry recognition and resolution,
if wider benefits are to be attained from the mentoring initiative for UK plc business.
Personal Mentor Objectives
Objective
Help Petrotechnics help themselves to
grow, diversify and improve.
Self-development, by learning SME
business drivers, increasing external
awareness, improving communication
skills & understanding E- capabilities.
Learn about e-business processes and
share opportunities internally.
Increase understanding of business
drivers that influence supply chain.
Achievement
Open discussion helped to clarify the
diversification objectives of differing business
product lines. Business enquiries are still being
pursued.
The criticality of cash flow, workflow and pace
are more clearly understood. Networks have
grown internally & externally. The M&M
sessions
have
forced
communication
improvements. E-business processes are
being considered for local improvements.
It is clear that e-business is a rapidly changing
area.
Internal
progress
has
been
tentative/cautionary until now.
Industry requires innovation from SMEs, but
current contracts, risk aversion, slow decisionmaking and organisation or personnel changes
can sometimes stifle such development.
Petrotechnics Ltd Objectives
Objective
Improve understanding of Shell Expro’s
needs in the N. Sea, globally, safety
management and e-business.
Following above, understand what
Petrotechnics could offer Shell Expro.
Achievement
A Shell Expro “confidant” has provided a more
intimate knowledge of the organisation. This has
proved useful in an environment of shifting
priorities and organisational change.
Matching the timing of offers with needs is now
better understood, as is the recognition of the
Deliver a process to demonstrate the
benefits of e-business.
Understand the barriers to SMEs
delivering benefits to large companies and
work out how to overcome them.
Diversify clients and market.
role of sponsors when developing e-business
process changes. Some products are currently
under competitive bid.
A Shell Expro mentor has also helped us to
better understand the strategy and position of
Shell Expro on their e-business journey.
Opportunities could yet emerge that might
enable Petrotechnics to potentially assist with
the e-business transition.
The recognition that some barriers and short
term cost cutting still exists within the Industry
and the challenge that this presents is more
clearly understood. Establishing on-going
professional
relationships
with
visionary
sponsors is a preferred approach to overcoming
some of these issues in the short term.
Co-incident with this initiative has been a
company business strategy review. Being able
to test this strategy with a mentor has helped us
shape a strategy that is starting to deliver
success in this area.
Industry Learning Opportunities
Summary Observations
There is continuous and
significant
organizational
change within the upstream
oil and gas sector.
Large and small companies
(especially SMEs) operate at
a very different pace.
Risks, exposures, rewards
and mitigation are not always
widely understood.
Articulating value versus cost
benefits is difficult in an
environment of short term
cost cutting.
Implementation
of
most
innovation appears slow.
Learning Opportunity
Large organisations are often in transition through growth or
rationalisation. Although this can provide new opportunities
and people it can also lead to significant delays or even
cancellation. Companies trading in innovation often rely on
personal relationships. These changing roles require
continual re-building of relationships. If these relationships
were more formalised, the issue of transition would be less
of a challenge for respective organisations.
Delays and deferment have different impacts relating to the
scale of a company, both in terms of cash flow and resource
planning. Businesses need to be absolutely clear that when
initiating an inquiry, there is an expectation and almost an
obligation of an imminent commitment to deliver something,
somewhere in a timely fashion. - Failure to recognise this
leads to increased cost of sales. Industry will be cyclic in
nature depending on global demand and supply. Early
decisions and less procrastination could significantly improve
innovation delivery and the cost base for all North Sea
businesses.
There is an element of risk with any innovation. This risk has
to be balanced against the potential benefits. Large
companies who have access to significant benefits are better
placed to carry the greater burden of this risk.
Many SMEs have to rely on sales based on value versus
costs benefits. There is some question as to whether the
most appropriate contractual mechanisms are employed to
support value based innovation delivery?
Persistence and perseverance are as much of a requirement
as innovation itself, if innovation is to be implemented. When
you innovate, you take risk and when you take risk, you
might experience failure. The key is to recover from failure,
Company cultures, people
and behaviours differ.
E-business equals change
management.
then learn and progress beyond the current limit or barrier.
This is true for supplier and buyer alike. Against a backdrop
of short-term cost cutting, increasing the pace and delivery of
innovation is and will be difficult.
There is huge diversity across the industry and it is therefore
important to recognise and understand these differences
when engaging in any business. This is especially so when
seeking standardisation. It might sometimes be better to take
the lead and encourage others to follow when trying to
establish standards. At other times it may be better to follow,
or adopt a practice, or product that is already proven. It is
conceivable that external SMEs in some niche areas might
help to facilitate this process.
Personnel entering into e-business proposals are contracting
in change management. The implication is that the benefits
of change may be against longer-term returns, as opposed
to simply short-term gains. E-business equates to strategic
change. It is therefore vital that a clear and agreed vision
should exist between all participants in e-business
environments to ensure successful outcomes. A clear
understanding of people, process & technology in that order
is what will deliver results.
Overall Conclusions
The benefits from an individual perspective arising from this initiative have been; a clearer
understanding of self, own company, other company & industry business drivers, learning
about alternative safety systems & e-business capabilities, strategic thinking discussions and
DTI opportunities.
The initial expectation of Petrotechnics was that the relationship would deliver tangible
benefits within the project timeframe. This was found to be overly optimistic, as results have
been limited. The relationship has however enabled improved clarity and shape around offers
being made. It has also highlighted some of the challenges faced when delivering innovation,
together with some means to address these. The net result is that there could yet be some
tangible deliveries after the formal closeout of the project.
There are lessons and observations arising out of the project that are common. It is hoped
that with both ends of the supply chain articulating similar challenges and potential solutions,
there should be an opportunity to change the way that companies access and capitalize on
innovation in the future.
The open and honest discussion has improved understanding of the challenges being faced.
This has helped to better describe and match future needs with potential appropriate offers.
Our final comment based on our learning and experience is therefore to commend this
initiative to the DTI, large & small companies alike and any future individual participants.