British Petroleum was able to reduce its greenhouse gas emissions by 10% in just four years. For our presentation at OD Network 2012, Solvable built this case study on how BP used a combination of technology and culture change initiatives to meet this ambitious goal. This case study is drawn from research by Michael Goold, “Making Peer Groups Effective: Lessons from BP’s Experiences” in Long Range Planning Journal (2005); and David G. Victor and Joshua C. House, “BP’s Emissions Trading System” in Energy Policy (2006).

1. BRITISH
PETROLEUM
CIRCA 1997*
*CASE STUDY DRAWN FROM RESEARCH BY MICHAEL GOOLD, “MAKING PEER GROUPS EFFECTIVE: LESSONS FROM BP’S
EXPERIENCES” IN LONG RANGE PLANNING JOURNAL (2005) AND DAVID G. VICTOR AND JOSHUA C. HOUSE, “BP’S
EMISSIONS TRADING SYSTEM” IN ENERGY POLICY (2006)
PHOTO: “BP LOGO” © 2011 LOUISE MCLAREN, USED UNDER A CREATIVE COMMONS ATTRIBUTION 2.0 GENERIC

2. BIG HAIRY AUDACIOUS GOAL
10% GREENHOUSE GAS EMISSIONS
REDUCTION ACROSS THE ENTIRE
COMPANY [BASED ON 1990
LEVELS] BY 2010

3. GOAL ACHIEVED 7 YEARS AHEAD
OF SCHEDULE GENERATING $650M
IN SHAREHOLDER VALUE

4. HOW...
TECHNOLOGY
– INTERNAL EMISSIONS TRADING SYSTEM
CULTURE CHANGE
– PEER GROUPS

5. BRITISH
PETROLEUM
CIRCA 1990
“OVER TIME OUR PEER PROCESSES
HAVE BECOME MORE ABOUT
HUDDLING TOGETHER FOR
WARMTH THAN MAKING A REAL
BUSINESS IMPACT”
- BP MANAGER, INTERVIEW BY MICHAEL GOOLD

6. (DE)CENTRALIZATION
CENTRALIZE STRATEGIC CHOICES
BUT DECENTRALIZE CONTROL
OVER DEPLOYMENT

7. STAGING
1 PILOT W 12 LARGE BUSINESS
UNITS
2 ASSIGN BUSINESS UNITS TO
PEER GROUPS WITH COMMON
CHALLENGES

8. MEASUREMENT
1 CREATE A UNIFORM STANDARD
ACROSS THE ORGANIZATION
2 PERFORMANCE CONTRACT
INCENTIVES TIED TO BUSINESS
UNITS + PEER PERFORMANCE
(HIGHER THAN AGGREGATE)
3 PEER GROUPS MET WITH
EXECUTIVE COMMITTEE 4T/YR

9. “PEER ASSISTS”
1 BEST PERFORMERS HELP
WEAKER ONES
2 MOST BUs CONTRIBUTING
RECEIVING ASSISTANCE

10. FUNDING
1 $50M CAPITAL FUND
2 PEERS ENDORSEMENT FOR CAP-
EX PROJECTS
3 A BILITY TO REALLOCATE CAPITAL
AMONGST GROUP MEMBERS

11. SUCCESS FACTORS
1 FORMAL ORG DESIGN RATHER
THAN INFORMAL NETWORKS
2 BUSINESS UNIT LEADERS:
LINE MANAGERS (PL) NOT
FUNCTIONAL MANAGERS
3 CLEAR DELIVERABLES
4 DECISION-MAKING AUTHORITY

12. BRITISH
PETROLEUM
CIRCA 2002
PEER GROUPS DISBANDED,
REVERSING CULTURE
CHANGE INITIATIVES OF
THE PAST 12 YEARS

13. BRITISH
PETROLEUM
CIRCA 2010
DEEPWATER HORIZON
PHOTO: “DEEPWATER HORIZON FLARING OPERATION” © 2010 PATRICK KELLEY (DVIDSHUB), USED UNDER A CREATIVE
COMMONS ATTRIBUTION 2.0 GENERIC