Switch - Chip Heath [35]
If you’re worried about the possibility of rationalization at home or at work, you need to squeeze out the ambiguity from your goal. You need a black-and-white (B&W) goal. A B&W goal is an all-or-nothing goal, and it’s useful in times when you worry about backsliding. Maybe your B&W goal for your alcohol consumption could be “No wine ever.” No wiggle room there. And what if we changed our New Year’s resolution from “Be healthier” to “Gym every day” or even “No more Cheetos”? Those goals leave nowhere to hide. Either you’ve got damning orange Cheeto dust on your fingers or you don’t.
Note that B&W goals—“No more Cheetos,” “No wine ever”—are not inspiring at all. They’re 100 percent restrictive. Furthermore, they are scripting critical behaviors rather than painting a picture of a destination. Is it possible to combine the emotional power of a destination postcard with the rationalization-squashing strength of a B&W goal? Yes, and to see how, consider the case of British Petroleum (BP). In 1991, BP announced a B&W goal that shocked its employees who had spent years in the oil industry. It was the multi billion-dollar equivalent of “No more Cheetos.”
5.
For most of the twentieth century, oil explorers had trusted their gut, which worked out well, because their gut was pretty smart and oil reserves were largely untapped. In the 1960s, Jim Vanderby, one of the great BP explorers, went to Egypt. The first four or five holes he drilled there were dry. His superiors at BP sent him a telegram and told him to stop trying. He didn’t get the telegram, or so he claimed. Regardless, he drilled again, and on his next try in the Gulf of Suez, he tapped into the world’s first multibillion-barrel oil field.
BP’s good fortune continued in the 1960s and 1970s, with huge discoveries such as Prudhoe Bay in Alaska (1968) and Montrose in the North Sea (1971), among others. Toward the late eighties, though, the mega-hits slowed down. “What was changing was that fields were getting more difficult to find,” said Pete Callagher, a senior leader at Amoco, which merged with BP in the late 1990s. “The older fields were huge, visible on 2-D seismic technology. Targets became smaller and more difficult to see. So the skill sets changed.”
As the landscape changed, BP’s strategy evolved. In 1989, its leaders locked onto the exploration doctrine that would guide them for the next fifteen years. They would focus only on big fields and stop competing for the smaller ones, thereby avoiding competition with hundreds of smaller competitors. They also decided to attack costs. At that time, BP was considered by many to be the world’s most effective exploration company. Even so, BP’s leaders believed it was spending far too much on exploration. They committed to slash exploration costs from $5 per barrel to $1. People inside the company thought this goal was outrageous.
To reduce costs so drastically, BP needed to minimize the number of “dry holes” it drilled. The historical success rate for drilling a new well was roughly 1 out of 8. BP’s rate was much better: 1 out of 5. To cut exploration costs from $5 to $1 per barrel, though, it would have to go from “good” performance to unprecedented performance. (Some said impossible performance.)
Researchers at BP began to investigate past explorations. One thing they studied was whether explorers were good at predicting the success of their wells. They reviewed wells that had been drilled over a 10-year period and found that, on average, explorers’ predictions were extraordinarily accurate. Their average prediction was that a well had a 20