BP and JLL Partnership Marks a New Era in the Energy Sector
BP and JLL Partnership Marks a New Era in the Energy Sector
In 2020, international energy giant BP (formerly British Petroleum) embarked on a restructuring and rebranding process as an integrated energy company. The company aimed to achieve this transformation through a new product resource mix that would reflect the transition to a low-carbon future. This effort encompassed how BP collaborated with strategic suppliers such as Jones Lang LaSalle (JLL); JLL provides real estate and facilities management services for BP's global workplaces, including small office and capital projects.
BP's global workplace solutions president Wendy Cuthbert encouraged the company's workplace leaders to explore the University of Tennessee's (UT) "vested" methodology, which aims to create highly collaborative business relationships where both parties are mutually committed to each other's success. In spring 2020, BP selected JLL to transition from four primary real estate management suppliers to a single global provider. As the BP-JLL joint deal architecture team (DAT) worked to reduce costs, increase service levels, and achieve workplace sustainability goals, it also ensured that JLL benefited from incentives to increase BP's profits.
In the initial phase, the parties aimed to move from a transaction-based business model to an "outcome-focused" model. An important step in this effort was defining a shared vision built upon six mutually desired outcomes. Subsequently, the way the scope of work would be addressed was reconsidered. BP's operational footprint spans 92 locations across 32 countries worldwide. Facility types range from BP's extensive corporate campuses to major R&D facilities in Pangbourne, United Kingdom, strategic data centers, and even a single-story childcare facility.
The traditional approach involves the buyer creating a detailed Statement of Work (SOW) that defines their requirements. However, the vested methodology required BP to recognize JLL as a true expert in the services it would provide. Together, they developed a taxonomy that created an inventory of the work required to achieve their shared vision and desired outcomes. At the same time, the defined workload distribution articulated not only JLL's responsibilities but also BP's commitment to supporting the partnership. In reconsidering how workplace services could be delivered, a "ponies" list was created to support continuous improvement or larger-scale innovations.
The DAT team began to rethink how success in BP's supplier relationships would be measured. The traditional method involves the buyer measuring the supplier's level of meeting specific requirements through contracts that define service levels. Instead, the parties defined success not on individual tasks but against mutually defined desired outcomes and linked to 11 strategic metrics.
Under an innovative pricing model, the more successfully the parties achieved BP's transformation objectives, the more JLL benefited from the incentives it earned. Key features of the model included creating complete transparency to identify true cost drivers for both organizations and rewarding JLL for achieving non-cost outcomes such as helping BP reach its workplace zero-emission targets. There was also a "safety lock" requiring JLL to exceed a certain safety threshold to earn additional rewards.
Finally, a governance framework was established in which BP and JLL team members worked closely to manage the relationship, transformation initiatives, and comprehensive processes to address compliance and regulatory needs.
As a result of implementing the change program, BP and JLL stated that they had developed a "what's-in-it-for-we" mindset rather than a traditional buyer-supplier approach. This shift enabled team members to question the status quo and continue finding ponies that created value for both parties. Team members use a mobile application and supporting portal to submit, track, and celebrate ponies ranging from process efficiency and system and technology improvements to reducing workplace carbon footprint.
The results underscore what team members call the power of "and"—meaning lower costs for BP's supply organization, record operational results for workplace teams, and higher profits for JLL. In the initiative's first year, the companies implemented more than 100 transformation initiatives designed to create value against desired outcomes. However, partners noted that the most satisfying result was the cultural change stemming from the vested model.
For BP and JLL team members, true innovation lies not in the hundreds of new ideas implemented within the initiative's scope, but in the vested "win-win" business model deployed to foster innovation in everything the companies do. This model enabled the companies to remain innovative by delivering value that transcends any single outcome.
Key Points:
BP underwent restructuring in 2020 on its path to becoming an integrated energy company.
A transition was made to a single global real estate provider through partnership with Jones Lang LaSalle (JLL).
Collaborative relationships were established using the vested methodology.
An outcome-focused model was adopted rather than the traditional business model.
Success was measured through 11 strategic metrics.
An innovative pricing model and incentives were implemented.
More than 100 transformation initiatives were executed within the first year.
Cultural change was highlighted as the most significant achievement.
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