Case study: Woodside leadership development program

Building a high performance culture to deliver on an aggressive growth strategy.

Building a high performing organisation

Since 2005 Woodside Energy Ltd (Woodside) has had a strong focus on executing a cultural change to build a high performance culture in order to deliver its aggressive growth strategy. This was desired in order to achieve outstanding business performance and top quartile total shareholder returns. In line with extensive Hay Group research which established the links between leadership, organisational climate, and organisational performance, Woodside has invested in building the leadership capability of its top 600 leaders and assisting leaders to create a climate where their people can do their best work.

Background: Helping Woodside deliver growth

In 2004, Woodside set a strategy that would see the organisation more than triple in size over 10 years and become a major player in the global Liquid Natural Gas (LNG) market. The first project to be developed in Woodside’s portfolio to lead its growth strategy was the development of the gas reserves in the Pluto field; which initially would include an offshore processing platform, a subsea structure connecting the five subsea wells and a 180km pipeline taking the gas to the new Gas Processing Plant in Karratha. The Pluto project also had an aggressive target of becoming the fastest developed liquefied natural gas project in the world from discovery of the field in 2005 to first gas from the field by the end of 2010 and first LNG in 2011 and will almost double Woodside’s LNG sales volumes. The company was preparing to take the bold action of ‘going it alone’ in terms of not farming down the risk to a variety of Joint Venture partners (which is the common practice in the industry).

The market at the time was in the middle of a global resources boom that meant that mining and oil & gas companies around the world were all competing for resources to bring on line new assets to take advantage of record commodity prices. Woodside leaders not only had to manage their own staff of over 3,300 but they had to work through a contracting workforce of up to 25,000, on any given day, to deliver the growth. Leaders in the business also needed to manage within a matrix organisation which was designed to optimise resources across a complex array of projects and on going production requirements.

The leadership team recognised that if they were going to achieve this audacious strategy, they needed to develop a culture of high performance and a business which was nimble and commercially astute that safely and reliably delivers on customer needs. This would require leaders who could equip their staff to experience the stretch growth goals as energising and engaging, and an employment strategy around attracting and retaining the best talent in an industry which was already experiencing significant talent shortages.

The VP Human Resources came to Hay Group seeking help in building the capability of the leaders in the organisation. The CEO and the board wanted a leadership group that could drive aggressive business growth. A key issue was our ability to engage a group who have very strong technical capabilities and are often cynical about the relevance of the ‘soft fluffy stuff’ such as leadership. We agreed to run a pilot group through a program using the four circle model of Organisational Performance Framework to ensure that our approach would be effective.

The program received very positive feedback and we worked with the HR team and the business unit leaders to develop a more tailored twelve month program which involved participants developing learning contracts with their managers, two workshops, a range of leadership diagnostic surveys, learning groups and an end-of-year diagnostic survey retest to review progress and set a development plan for the future. The program, called Leadership for High Performance (LHP) program was rolled out to the top 600 leaders across the organisation. This involved programs being run in Perth, Karratha, Houston USA, and Reading UK.

A number of the Woodside HR team were trained in different aspects of the program to enable them to co-facilitate the programs with Hay Group consultants. In 2007 Hay Group ran the Employee Survey which reinforced the need to continue to build leadership capability in the organisation. The HR team built a comprehensive Management Development curriculum which included the Leadership for High Performance program and a range of skill modules.

The impact on Woodside has been significant with the Pluto project still on track to deliver against such an aggressive schedule. The leadership team continually reinforce the learnings from LHP – clarity of purpose, alignment of team outcomes, setting and continually reviewing high standards, rewarding exceptional results, taking known risks to improve performance and giving and receiving regular feedback – all of which have resulted in high levels of team commitment who are energised and driven to achieving.

Impact on organisational outcomes

The goals of the program were:

1. To create an organisational climate that attracted and retained the best people.
2. To develop a culture of high performance.
3. To equip the business to sustainably and profitably achieve its growth ambitions.

Building and maintaining a high performance culture is a continuous process. This said, the impact of the program so far has been experienced in a number of ways, as detailed below:

  • Voluntary turnover has reduced by 25% over three years.
  • Climate has improved significantly in a short space of time against internal and external benchmarks; in fact Woodside is performing at higher levels than other Australian organisations
  • Leaders are demonstrating leadership styles which are more appropriate and impactful to the business situation
  • The feedback from the organisation through the Employee Survey is that the quality of leadership has materially improved
  • Employees understand the business direction and strategy generally, and their contribution to it specifically via the business plans
  • Woodside has improved its ability to engage and retain quality individuals and differentiate itself in the employment market
  • Employees feel equipped and energised to deliver to stretch targets

Comments from Woodside on the impact of the program

“Attendees of the LHP, often feedback that it’s the best leadership program they have ever attended. As a model it is so simple and easily understood, but it’s also a practical tool that can be implemented immediately in every aspect of our work practices.Having a common language that is used from our CEO to our front line supervisors has notably improved communication and provided high levels of clarity across the organisation, regardless of where people work – onshore, offshore or internationally.”