Improving Capital Competitiveness Calgary Executive Roundtable - May 17, 2017

Companies are increasingly competing for capital on a global basis.

What is becoming increasingly clear is how this competition for capital investment is occurring between regions - even within a given company. Alberta is experiencing both types of competition, particularly in the energy and petrochemicals sectors.

How can we make Alberta Energy and Petrochemicals more competitive for capital in the long term?

Evolve Partners hosted an Executive Roundtable Event in Calgary, Alberta on Wednesday, May 17, 2017 focused on exploring responses from industry leaders to that question. The event featured a panel discussion with senior leaders in the Alberta Energy and Petrochemicals industry.

The discussion was led by Paul Vander Valk, VP, Cenovus Energy, Kevin Stark, GM, Devon Energy and Bill Greene, Retired Executive, Nova Chemicals, Evolve Advisor, discussing several areas of “Capital Competitiveness” including Recurring Capital, Operational Improvement and Enabling Growth. The participants shared their perspectives and experiences with one another in a lively, informal setting.

Several key themes stood out during the conversations:

  1. The rigorous use of a stage-gate process
  2. Cross-functional collaboration
  3. Breaking down organizational barriers between companies, and
  4. Engaging the entire organization in the competitiveness challenge

Below are a few observations and reflections on the event:

Cal Watson, Retired Executive, Devon Energy and Evolve Advisor
I thought the event held very good value for the attendees. All were engaged, shared freely their perspectives on the various topics and had good questions or builds onto the speaker's thoughts. I like the structured format with the themes of Recurring Capital /Sustaining Capital and Asset Management under the umbrella of Competitiveness for Capital Investment.

There was a lot of enthusiasm and discussion on a few topics such as the stage-gating process, encouraging and supporting innovation at the field level and ensuring we allow people the opportunity to fail without reprisal - (looking to) "fail fast".

Bill Greene, Retired Executive, Nova Chemicals and Evolve Advisor
I found the evening to be very engaging, and relaxed. Perhaps because of the intimate venue, I did not have a sense that folks were holding back, and genuinely wanted to share experiences. I did hear other supportive comments, that folks were very open to follow up discussions to share learnings etc. I saw this as a high-value networking opportunity.

I agree with the key themes that were captured, and was surprised with how early several companies were in the "Stage Gating " journey. I look forward to future panel discussions to share the additional learnings and reach beyond the boundaries of the process, and table how to have a broader capital management portfolio, with emphasis on metrics, longer term planning horizons, benchmarking and more.

Cross-functional collaboration and breaking down organizational barriers is something we always need to work on. There are many examples from organizations of what has worked well, and what has not.

Arun Jeyachandran, Vice President, Canada, Evolve Partners
I felt this event created conversation that was richer, more focused and provided some real takeaways. I felt the greater success was mainly due to how the event was set up – formal and informal at the same time. The formal part being specific topics and a panel to lead the conversation while the informal, relaxed environment allowed the executives to feel comfortable discussing some challenging issues.

It was interesting to discover from industry executives directly, how their companies were adapting to the new level of competition for capital in this market of reduced returns. It was acknowledged by the group that this common global challenge would require regional solutions. Collaboration, innovation and the continuous drive to get better by challenging the status quo, were all key topics of discussion. The diversified industry group provided a range of perspectives that in the end was surprisingly similar with culture and behaviors at the center of much of the discussion.

All in all it was an evening well spent!
John Norcross, SVP Accounts, Evolve Partners
There were three themes that stood out to me with respect to the strategies companies were employing to (in Paul Vander Valk's phrase) “earn the right to grow”.

One was the rigorous use of a stage-gate process to realize operational opportunities.

Heather Scott, VP Oilsands Assets at Brion Energy, emphasized the importance of framing the opportunity to be addressed by capital investment. 'We need to carefully determine the question we're trying to answer?' Jumping straight to solutions means we miss understanding the problem.”

Another was the focus on cross-functional collaboration to develop innovative ideas to increase capital efficiency in the operation.

“(In the past) nobody would talk to anybody else about capital project execution,” said Kevin Stark, GM Capital Projects at Devon Energy. “We started co-locating people - so they can work together and collaborate more freely - and we've already seen significant cost savings. When they have the space to work together they can usually come up with something very effective.”

Lastly, though, there remains the challenge of breaking down organizational barriers to extend the focus on collaborative opportunity finding and problem solving outside of the operating company. Participants felt that collaborating with value-chain partners, service providers and other suppliers was still an under-explored area. Service companies that partner with operators have a unique perspective of operations practices across operating companies. All that the operators need to do is ask their service providers to collaborate with them and they'll likely uncover a lot of improvement ideas that would be mutually beneficial.

• • • • •

For leading Energy & Petrochemicals companies who recognize that a significant part of their strategy execution is realizing the potential of their people, Evolve Partners supports implementation programs which create a culture of problem solving and learning that enables their people to deliver significant value in Capital, Production, Cost and Risk, and continues to grow long term.

The Art of Implementation®

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