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A Practical Example of OMS Implementation: Coms – The Cenovus Story

Contributor: Tim Haider
Posted: 03/23/2015

In this interview we take a look at the roles of leadership and behavior on the journey towards process excellence. We spoke with Mark Little, VP Business Excellence at integrated oil company Cenovus Energy, about COMS, the Cenovus Operations Management System – a system that was designed and implemented in record time.

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Cenovus was formed in 2009 when Encana Corporation split into two distinct companies: one an integrated oil company (Cenovus), the other a pure play natural gas company (Encana). Little ascribes much of the foundational idea of COMS to his COO, oil industry veteran John Brannan.

"We were growing from a small entrepreneurial oil and gas company into a large integrated company, and the COO, John Brannan, had a background working with large international oil and gas companies. He knows that all large companies eventually get to the state of needing common processes, procedures and controls to manage risk and to ultimately drive operational performance."

Assembling the parts of a functioning operational management system was not all plain sailing though: "Initially, it didn’t have success in its deployment, and it missed some key pieces. It largely missed on change management, it missed on engaging and including operations people in the design, and it missed on governance in terms of linking subject matter experts – which we now call process group owners - to the eventual operationalization of the model. It was a largely a ‘push’ rather than a cooperative co-development."

Little moved from Shell’s Heavy Oil Upstream Americas to Cenovus in 2012. "When I came in, I was asked to take over five departments. And what I realized was that we had an operational excellence team, a continuous improvement team, an operations training team, a management system team and another business solutions team. We merged these into one, and that was the first time we actually said that the management system needed to be an integral part of our journey toward operational excellence and continuous improvement. Rather than competing, they all needed to be working towards the same strategic outcome."

BECOMING A REALITY

The first steps on the road to COMS had been taken. "The first thing was to actually say that if you have a sound strategy and executional excellence, then the combination of the two enables you to consistently and reliably deliver industry-leading performance."

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"COMS is made up of two pieces: the first is a business process model, which lays out what work we do across the value chain. The second key element is actually the management system itself, made up of seven elements and applicable to everybody in the company. This really explains what the expectations are, how we work and how we get results."

The way that responsibilities are delineated within COMS is a key constituent for the system to retain its structural integrity. Little is unequivocal about how this should be carried out: "We don’t want actions from every individual in the company; we want actions at the right levels, with clear accountabilities and responsibilities for everybody."

"Basically, the subject matter experts define what ‘good’ looks like and

what the minimum requirements are. Senior leaders set the vision and establish and champion organizational structures. Asset leaders are a little more hands on, setting targets and accountabilities as well as overseeing compliance, and control. And then there are the supervisors and managers throughout those assets who have very clear definitions of how they’re supposed to implement standards, what controls they need to have in place, and how they should be meeting the expectations of the process group owners."

GETTING THE BUY-IN

As with any large-scale reorganization, once in motion, the wheels would not keep on turning without buy-in into COMS engagement and compliance. Little makes no bones about how demanding this was: "To be perfectly candid, this was probably the hardest piece and took about 18 months."

"It started with the COO and his direct reports. We formed a single steering committee made up of all the senior vice-presidents in operations. At this committee, we discussed what we wanted for COMS and collaboratively built out what we needed."

"We then formed a team to design COMS and brought together working teams that were made up, not only of the management system experts from my team, but also of representatives from every asset and every functional group. They designed the principles and the content, and they reviewed the standards. Our key concern was whether we were building something that would constrain us competitively. How could you make it fit for purpose so that it met minimum requirements and enabled us to continue to be entrepreneurial and flexible without being overly constraining and gold-plating?

"Implementation is done within the assets by the assets, so the governance model around prioritization is actually decided by the asset leadership - a pull relationship rather than a push model."

CONFORMANCE AND METRICS

A system of compliance controls is the ever-ticking metronome that keeps an OMS to speed. At Cenovus, conformance targets are no different. "Within the COMS framework, you have the seven elements," says Little. "Within the elements, you have 21 standards. Within the standards, you have discretely spelt-out minimum requirements. The minimum requirements establish key performance indicators (KPIs). So, depending on the standard, the KPIs will specify a number of measurements or controls that need to be in place and how to check that they are in place. You can then do a self-assessment to see whether you are meeting the minimum requirements and have the required measurements in place."

WHY WALK THE ROAD AT ALL?

Top brass across the business world are asking how important an OMS is in driving operational excellence. Can an organization be operationally excellent with an ineffective OMS system, or does it need one at all? Little is bullishly philosophical on the matter: "We fundamentally believe that only with the execution of a sound strategy can you actually get industry-leading performance. To take that further, you really need to have execution of the business strategy be more consistent and reliable than that of the competition, so it’s a relative factor."

"I would argue that, theoretically, you could have good performance if you didn’t have all the elements of a management system in place. But the competition is not only catching up, the environment is getting more complex, and accordingly you need to be doing your job better than everybody else."

"My argument is that only by delivering on all of the seven elements and all of the management system components are you truly going to be in a position where you’re going to outplay and out manoeuvre your competition. That’s the only way you’re eventually going to become the industry-leading performer you are striving to be."

Hear from Cenovus’ Mark Little at this year’s Operational Excellence in Oil and Gas Summit, June 1-3 at the Downtown Marriott.

The 2015 agenda features and entire track on Operations Management System that will give you an unprecedented opportunity to go inside the Cenovus and Suncor OMS and learn the common characteristics of companies that systematically manage their operations.

Contributor: Tim Haider
Posted: 03/23/2015