“Strategy is not the consequence of planning but the opposite: its starting point. Effective strategists are not people who abstract themselves from the daily detail but quite the opposite: they are the ones who immerse themselves in it, while being able to abstract the strategic message from it”. Henry Mintzberg
The Strategic Processes enable the opportunity to be defined and plans and strategies to be developed to realise the maximum value of the opportunity. The application of all of the Strategic Processes discussed in this chapter is a mandatory requirement for all projects with a total cost in excess of $US 20 million.
While the effective implementation of the Control and Work Processes (Chapters 4 and 5 respectively) are essential to enable the opportunities to achieve their defined objectives, it is the intelligence, competence and clarity of thought in the use of the Strategic Processes at the appropriate time in the project lifecycle that will establish the realisable value of the opportunities.
The required focus on front-end loading in the project’s realisation is achieved by appropriate concentration on the StrategicProcesses. These processes are defined and itemised in the following chart and are discussed in detail in this chapter.
Strategy Formation
Strategy formation lies at the heart of the Opportunity Realisation Process and is one of the fundamental project management processes. The quality and timeliness of the strategy formation for the opportunity will have more impact on the final outcome than any other activity undertaken by the opportunity/project team. The emphasis on Front End Loading (FEL) in the Opportunity Realisation Process is largely about getting the strategy right.
Strategy formation for an opportunity/project takes place throughout its lifecycle – for example, the contracting strategy for the Operations Phase is generally conceived during the Execution Phase – but the most important strategic decisions should have been made by the end of the Select Phase, with adjustment being made in later phases, if necessary, to accommodate any changes in the project environment or in the project objectives etc.
The expected deliverables from the first two phases of the Opportunity Realisation Process, Phase 1-Identify and Assess and Phase 2-Select2, indicate the nature of the strategic thinking needed to set the project on the right lines.
From the list of deliverables, it is apparent that a multi-functional team or group is needed very early in the Opportunity Realisation Process and certainly by Phase 2-Select. Reservoir, well, field and operations engineers all have a major contribution to make at this stage. In addition, marketing staff, corporate affairs staff and others may have significant input, dependent on the nature of the opportunity. It is an essential aspect of strategy formation to identify and obtain the necessary skills to ensure the quality of the strategic planning deliverable. The strategy formation activities are described under the following sub-sections:
- 3.2 – Opportunity Framing
- 3.3 – Sustainable Development
- 3.4 – Asset Reference Planning & Operations Philosophy
- 3.5 – Project Execution Planning
- 3.6 – Contracting Strategy
- 3.7 – Technology Planning
Opportunity Framing
This process has been discussed in 2.2, Defining the Opportunity. It can be used both to identify an opportunity (from, say, a portfolio of opportunities) and, once an opportunity has been identified, to define what that opportunity truly is. Although most importantly used very early in the life of an opportunity, the process is not used just once in a project lifecycle but is applied at the beginning of each of the ORP Phases (and sometimes at intermediate points in a Phase) to re-frame the remainder of the lifecycle and, especially, the next phase in that lifecycle.
As stated previously, it is the starting point for a robust decision-driven process to achieve a declared goal and the starting point for the team’s planning process. Its output is an Opportunity Framing document covering the subjects discussed in 2.2. In Phase 1, Identify and Assess, the Opportunity Framing document will be used in the preparation of the Project Initiation Note.