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Not Your Typical Oil Change

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by Peter Block

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Not YourTypical Oil Change

Ft. McMurray has been described as a town that's seven months of winter and five months of bugs. Located in Alberta, Canada, it was once a small town whose main businesses were fur trapping and fishing. But today it is home of a very successful oil refinery - Syncrude Canada, Limited.

Initially, Syncrude's mission was to determine if it was feasible to extract oil from the Athabasca oil sands in North Eastern Alberta. In the 1970s Syncrude became a joint venture of several oil companies and governments intending to mine (versus drill) oil. When actual production began in 1978, in addition to proving that oil could be mined, they also had to prove they could do it safely and reliably, and that it would be profitable. "Many experts considered us to be an R&D curiosity that could never make it in the competitive world," says Don de Guerre, manager of organization effectiveness, "But we proved them wrong."Did they ever.

The Athabasca oil sands contain more known oil than in Saudi Arabia. Since Syncrude's incorporation in 1964, the town's population has grown from 3,500 to 40,000. But when the world oil price fell in 1986, Syncrude faced new competitive challenges and met them in a way that changed the way they are working today. But not with charts, tools, or new management styles. "It's not good enough just to become a facilitative supervisor. It's not good enough to form a traditional quality circle," says de Guerre, "You have to change the way work is done and the way the organization is structured." Syncrude created a direct participatory democracy in which people affected by decisions in the workplace have the right to be involved in those decisions - a process known as participative design.

Here's How They Got There
In order to stay competitive, Syncrude had to reduce the cost of producing oil. In 1989, newly named President and Chief Executive Officer Eric Newell knew that staying competitive meant continuing to cut costs. But how would this affect safety and reliability? Although Syncrude had used teams and innovative techniques starting in the 1970s, Newell knew that they had to change the way they worked and reorganize the workplace to stay competitive and continue to meet their high standards. The problem? He had no idea how to do it.

Searching for a Better Way
The goal was to become a new form of work organization - to build more participation and involvement. Although Syncrude always had team concept values, they were supervisory lead. They wanted to move towards a loose, decentralized, flat organization.
A socio-technical systems analysis pilot test was implemented in the utilities plant in 1990.
It failed for many reasons including confusion in leaders' roles over involvement in decision-making and too much time in meetings (talking about work as opposed to doing work) to name a few.

A new vision and value statement developed by upper management was introduced to everyemployee through mini search conferences. Developed by Fred and Merrelyn Emery, the search conference process entails looking at the environment, looking at the organization, looking at the probable future, the desirable future and the gap. In other words, employees were asked to be proactive in creating their own future and the best workplace for themselves. Syncrude had a vision to "manage change, rather than be managed by it." At first, people didn't see the need for change. The attitude of some was, "Why bother? We don't respond to the market. Sooner or later they come to us." Others said, "They'll never close this place. Look at how much money they've pumped into it already. Plus, it's government owned." But soon these mini search conferences evolved into organization-wide democratic dialogues that didn't stop at the office. They happened at the bowling alley, at restaurants and at parties. What affected Syncrude affected Ft. McMurray. Conversation revolved around what Syncrude was exploring:

1. Who are we? (What do we value? What are our business issues?)
2. Given who we are, how do we best organize ourselves to do what we have to do?
3. How do we make it as profitable and successful as we can?

Moving the Power
According to the Emerys, most corporations operate under Design Principle I (DPI), redundancy of parts - when the responsibility and control of work is located one level above where the work is actually done. Syncrude wanted to reorganize the work under Design Principle II (DPII), redundancy of function. DPII means that the responsibility and control lie within where the work is actually being done. Individuals become teams and learn more skills and have more responsibilities to complete the team's tasks.

To accommodate this shift, several new committees were formed. The Employee Development Steering Committee (EDSC), the Organization Design Steering Committee (ODSC) and a Referent Leaders Team. EDSC was developed to teach employees and teams the new skills needed for the change process and the new organization. The Referent Leaders Team was made up of internal change agents and its function was to resource the participative design process. ODSC's function was to define the new organization based on DPII - redundancy of function. They also created a set of Principles for Organizing Work that was used as a guide for all work and organization design activities.

Along with these guidelines came an umbrella policy framework which included the implementation of semi-autonomous work teams - where the team not only does the work that needs to be done, it also records, analyzes and plans its own work. Also, in addition to managers' regular duties, they had to learn more about training, coaching and leading. Through open book management and business literacy, teams were given more knowledge and responsibility concerning their budgets and financials. Lastly, management provided a gainshairing package and an employment guarantee. The employment guarantee was part of a redeployment program that guaranteed each employee would keep a job at Syncrude, but not necessarily within the same role.

The Redesign Process at a Glance
Eventually, every division (4,700 people) went through the participative search and redesign process. To illustrate the type of impact this process can have, take a look at the pilot group - a division of the mining department called Mine Mobile. They engaged in a two-day participative redesign workshop. When they started their redesign process they had forty different proposed designs. Then a smaller group reduced it to three or four designs. Finally, those designs were taken to a town hall meeting that 275 people attended, and in an hour and a half, selected and committed to one design.

Obviously, not every person present voted for the chosen design. However, when all were asked if they could live with it, not one person said that they could not. The design was implemented the very next week.

Winning the Race
"It's really a matter of heart," says Newell, "you can train people in various techniques, but what it takes is more fundamental. It takes heart to win the race and, believe me, it is a race." The heart is definitely more involved in the redesign process than the brain. It's an emotionally charged process where individuals have to care about their future and what's at stake. Some at Syncrude even refer to it as "painful learning." However, the pain is relieved by the commitment to the new organization and the satisfaction that comes with designing that new organization. Syncrude and the once small fishing village continue to triumph. "I'm proud to be associated with people who are willing to be innovative, willing to break the traditional ways of thinking and really take risks," says Mayor Doug Faulkner, "and that's what we're doing at Ft. McMurray.