Switch - Chip Heath [37]
As explorers began talking about “No dry holes,” they started taking off their explorer hats and putting on their geologist hats. Lots of things had to go right to create a productive oil field, and geologists had previously devised different tests to evaluate every geologic feature: Was the right carbon-rich substrate available to form oil? Was there a harder, impermeable base layer underneath the oil to capture and contain it if it formed? Even if the oil had formed at some point in geologic history, could subsequent underground pressures or temperatures have degraded the oil?
The idea of eliminating dry holes prompted geologists to become more systematic about mapping and aggregating the information they had. They color-coded maps—green for aspects that might support an oil field, amber for areas where information was missing, and red for clear counter indications. Then they overlaid the color-coded maps on top of one another, each layer representing a different geologic test. They decided to drill only in regions that were green on every conceivable dimension.
“No dry holes” was effective in stamping out two kinds of rationalizations for poorly conceived drilling operations. One was “learning”—the convenient notion that even if a particular well doesn’t hit, the team will learn so much from the process that future operations will be more successful. Vann said, “I can give you a hundred examples where people made a mistake because they didn’t use knowledge they already had, for every one example where we learn something that is valuable for next time.” The other common rationalization was that certain wells had “strategic value.” Callagher said, “The last defense of the charlatan is always that something is ‘strategic.’ ‘This is a strategic well, so we have to drill it.’” “No dry holes” removed the fudge room. A well might be strategic, or it might not be, but either way, it better not be dry.
David Bamford, BP’s chief geophysicist during much of this period, said, “I can think of several examples of where technical teams knew a proposed well would be dry and yet senior management wanted to drill it because of pressure from government or business partners.” Previously it was hard for front line people to object to these decisions. When your manager is the only one who knows what the “partner pressure” consists of, how can you possibly raise a credible objection?
The “No dry holes” goal boosted the confidence of the frontline employees. The Exploration Forum—the peer group accountable for exploration decisions—became more outspoken and pushed back on “strategic reasons” to engage in low-probability explorations. After all, the strategy was “No dry holes,” not “No dry holes unless drilling helps to placate an important partner.” The strategy had changed in a way that gave lower-level employees an equally credible voice in the decision.
The B&W goal worked exactly as the management team had intended. When BP left nowhere for people to hide, its people stopped trying to hide. They tightened up their analyses, and they made fewer “play-the-odds” decisions. They got serious about using every available scrap of data in their decisions. And they toughened up their resistance to governmental and partner pressure.
By 2000, BP’s hit rate was an industry-leading 2 in 3. That’s triple the success rate of 1989. BP was still hitting dry holes, but the goal had stirred improvements that many had considered impossible. BP transformed itself when it eliminated its own wiggle room. When we drill a hole, it better not be dry.
Note that the leaders at BP didn’t say, “Two out of three—that’s close enough. Let’s celebrate!” Every dry hole was a failure, and there was no dodging