When your company’s been through the punishing rounds of the Business Storm Cycle – from the high-growth Tornado where sales are climbing so fast you can’t keep up, to the Avalanche of high inventory and shrinking margins that follow – how you deal with the consolidation phase that follows can mean life or death for your enterprise. Make the wrong choices, and you may not survive the next cycle. Make the right ones, and you’ll be prepared to weather that next Tornado.
When Devon Energy went through their Avalanche phase, they were able to consolidate in a new way that allowed them to move forward. They merged with another company, Ocean Energy, using the merger as an opportunity to take on a company-wide transformation project across every process. The two companies were able to blend the best of both companies. They took people from both companies from different departments, both operations and administration. At the same time, they identified the best practices from both companies that would best serve the new company going forward. In the end, they had some people from Ocean, some from Devon, and some new people they brought in from outside. They also used processes from both companies, streamlined to work for the new and much-larger Devon, and they worked with consultants to develop their best practices. They made all their new processes scalable so that when they had their next growth spurt, they’d be ready.
It was a long, arduous process that took a lot of work, time, and leadership in organizational change. The company was in a whole new world, and that’s always hard for people. Human beings don’t like change. They like to do things the way they’ve always done them. But Devon Energy took the time to do it right. Devon Energy’s leadership understood that the only way you’re ever going to experience another Tornado is if you consolidate after the Avalanche—and then prepare yourself for new growth when it comes. First, they brought people from every piece of the business, backfilled their normal roles, and gathered them together in a big room. Then together they went through each and every process within the company. They listed every single role and figured out where there wasn’t integration between various roles and also between roles and processes. Then they redefined each role to make them all work.Once that was done, they implemented everything that they had redefined and reshaped. They used the technology they had that did work, and they got rid of the technology that didn’t work. Now they could see where they had gaps—and then they could get the technology that was truly needed to fill those empty spaces. Devon Energy’s story is an excellent example of an executive team realizing that what they were facing wasn’t just an IT problem. It also wasn’t only an operational problem. Instead, in order to survive, they had to look at how all the pieces fit together—and how they could scale to weather the next Tornado.
Once that was done, they implemented everything that they had redefined and reshaped. They used the technology they had that did work, and they got rid of the technology that didn’t work. Now they could see where they had gaps—and then they could get the technology that was truly needed to fill those empty spaces. Devon Energy’s story is an excellent example of an executive team realizing that what they were facing wasn’t just an IT problem. It also wasn’t only an operational problem. Instead, in order to survive, they had to look at how all the pieces fit together—and how they could scale to weather the next Tornado.
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