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A year ago, BP faced challenges well beyond the formidable task of developing ample, reliable, and profitable energy resources. The global energy giant was stabilizing after a 2005 Texas City Refinery incident, which took 15 lives, and leaks in BP's Alaska pipeline had drawn sharp attention to the unglamorous, but essential, operations side of the business.
The resulting corporation-wide focus on safe, reliable operations brought BP, one of the world's largest energy companies, to MIT to build on the success of Projects Academy, an award-winning professional education program that has helped strengthen and standardize the way BP manages billion-dollar-plus projects since 2003.
The new Operations Academy (OA)--founded, like Projects Academy, through the MIT Professional Education Program and the Sloan Executive Education office--is designed to enhance the culture of continuous improvement at BP. Senior managers sharpen their technical and management skills at MIT and help establish the company's Operating Management System (OMS) as the BP way of operating across its global operations.
"We are primarily an oil and gas company," says Ian Livett, a BP term director for the Operations Academy. "Basically, we discover oil and gas, build the facilities to develop the oil and gas, and operate those facilities. With the benefit of hindsight, we didn't always spend enough time focusing on operations as our core activity and discipline and recognizing our operations community to be as important as it is in such a technical and complex business."
He says BP's objective is clear: "OA graduates will be prepared to lead a more systematic and rigorous approach to the management of operations utilizing continuous improvement as the sustainable foundation of technical integrity, reliability, and safety."
To meet BP's goals, the curriculum--for the three-day executive session and the more extensive senior operations managers program--is jointly developed by MIT faculty, George Stephanopoulos from the School of Engineering, Nelson Repenning from the Sloan School of Management, and BP experts including Livett, fellow term directors Susan Kolbush and Ronan O'Neill, and BP's overall OA program director Steve Marshall. BP provides curriculum objectives; MIT presents useful tools and concepts in an educational framework that meets those objectives. Topics include leadership, risk management, systems thinking, and process safety.
BP experts bring hands-on expertise and company context. Senior executives discuss strategy and executive expectations and connect challenges in engineering, for example, to day-to-day operations. MIT faculty brings objective analysis and broad industry knowledge. "We learn a lot about best practices through faculty's work with other businesses and their research," Livett says.
Last fall BP's chief executive officer, Tony Hayward, and 25 senior staff launched the three-day Operations Academy Executive Program, designed to educate top management on how to lead BP to operations excellence in an enterprise that employs over 96,000 people in over 100 countries.
The Operations Academy for Senior Operations Leaders kicked off last July with the first of three, two-week intensive sessions for about 40 managers selected from the refining, chemicals, exploration, production, and alternative energy divisions. This group is set to return for a concluding session in June.
The first term curriculum includes a Deep Dive case study into the 2007 BP U.S. Refineries Independent Safety Review, which examined process safety at Texas City and other BP refineries following the 2005 accident. One finding from the report was that BP had focused on measuring and managing occupational safety at the expense of process safety.
"The report is incredibly important to the company. BP commissioned it, the panel was totally independent, and we committed to implement their recommendations," Livett says. "At MIT, we are able to analyze it deeply and people leave here with a better understanding of how continuous improvement and risk reduction applies to their piece of the business."
Between terms, BP managers are asked to take on an improvement project using the tools and concepts acquired in the campus term. In one example, a senior operations manager in the onshore U.S. business area worked with his team to reduce the number of breakdowns of the pumping units in onshore oil production wells, Livett says, "By being more rigorous in measuring where we are having failures and why, they have been able to significantly increase the annual production of those wells. This manager looked at the problem locally and now we are applying the process to all of our North American onshore assets."
The Operations Academy is central to BP's commitment to improve its vast operations landscape. Hayward's goal is to bring 100 of BP's top executives to campus for the executive program by the end of 2008 and to have up to 350 senior operations managers graduated or participating in the program by 2010. Together, these executives and managers can help seed a culture of continuous improvement across the company's global operations.