2. How does complexity in business processes, such as procurement

(purchasing), cause an increase in costs? At a March 2008 meeting, CEO (chief executive officer) Tony Hayward warned 500 top BP managers that: “Despite having annual revenue of about $300 billion, BP had become a serial underperformer.” A Morgan Stanley oil and gas analyst further warned that while the rest of the energy industry was undertaking rapid change, “BP will not exist in four to five years’ time in its current form.” The company had become bloated, passive, unfocused, and unconcerned with performance.

Either the energy giant transformed itself or it would be wiped out by competitors.

The strategic goals were to restore revenue growth across the company, refocus the behavior of the company around high performance and accountability, and reduce the complexity in the organization that was driving up costs.