2019 AWARD FINALIST SPOTLIGHT: Weatherford - Finalist in the Operational Excellence to deliver Business Transformation Category

Read this article about Weatherford, one of our finalists, in the category Best Achievement in Operational Excellence to deliver Business Transformation, selected by the independent judging panel, for the 2019 Business Transformation & Operational Excellence Industry Awards program. Click here to read articles on other finalists.

As one of the largest global oilfield service companies, Weatherford operates in more than 90 countries; employs approximately 26,500 people*; and leads the oil and gas industry in disciplines such as managed pressure drilling, tubular running, and artificial lift. Over the course of approximately 35 years, the company grew by acquiring more than 250 companies.

Each of these companies presented their own employees, processes, and cultures; however, they were never fully integrated into the parent organization. Varied philosophies and systemic inefficiencies negatively impacted the company’s ability to realize its full potential. Thus, at the time of the former CEO’s departure, the company carried a significant burden of debt and a fractured culture.

With the new President and CEO Mark A. McCollum at the helm, the company embarked on a cultural transformation in April of 2017. The company set out to rebuild its culture with these objectives: 1) transform the business into one defined company, 2) create a collaborative, inclusive, and effective workplace, and 3) empower employees to drive improvements.

At the same time that Weatherford embarked on a cultural transformation, it began a financial one to uncover $1 billion in improved recurring earnings by year-end 2019. In short, it began an aggressive endeavor – two simultaneous transformations across one multinational organization. The cultural transformation, which is the focus here, purports to realize sustainable improvements to business performance in parallel.

In one year and a half period, Weatherford began reshaping its culture. The company defined its mission statement and six core values. It realigned its business organization to clarify responsibilities. It conducted culture-shaping sessions with the top 700 employees and continues with the next 4,000 employees. And, it established four diversity and inclusion (D&I) networks to foster internal collaboration and drive company results.

These changes resulted in substantial improvements to the bottom line. In point of fact, the company implemented transformation initiatives worth an estimated $800 million, or 80%* of the $1 billion goal. To add to that, every quarter the company is executing transformation initiatives worth approximately $200 million. This execution rate gives a clear line of sight to reach the target on schedule with original plans.

Furthermore, EBITDA results so far clearly indicate the positive impacts of the transformation program, of which the cultural program is a large part. By the end of 2018, the company increased EBITDA by 80% compared to year-end 2017 levels. This increase well outpaces the company’s largest peers. Looking ahead to 2019, the company expects to increase EBITDA by approximately 27%, or $330 million, compared to 2018.*

This financial evidence supports the effectiveness of the cultural transformation. Boosted by the progress already made, employees forge ahead with increased productivity, inspired motivation, and a firm commitment to deliver on the ultimate financial goal.

* Numbers have been updated from the initial award entry.