This page refects viewpoints on the political, economic, cultural, technological, and environmental issues that shape the future of the petroleum industry. Offshore
Magazine invites you to share your thoughts. Email your Beyond the Horizon manuscript to David Paganie at firstname.lastname@example.org.
BEYOND THE HORIZON
Growth and volatility are driving global demand for change in the
energy industry. There is a mission critical need for leaders who can
successfully face persistent and continuously emerging challenges
that drive change in the industry. Nowhere is this more evident than
in today’s offshore E&P environment.
Bruce Bullock, director of SMU Cox’s Maguire Energy Institute,
boils down the industry’s challenges to financial performance: “The
industry has to find ways, through technology, efficiency, science
and other strategies to really improve its financial results over the
next several years.” The drive for financial performance demands
change leadership skills from all levels of management and a new
perspective on change.
Business typically has used three perspectives on change, each
with its own implementation methods. They are:
• Transitional change: implementation of a known new state
• Developmental change: improvement of what is
• Transformational change: emergence of a new state, unknown
until it takes shape, out of the remains of the chaotic death of
the old state.
It can be argued that the US government support for General Motors and Chrysler during the 2008-2010 financial crisis saved these
firms—and the domestic US auto industry—from a chaotic death.
Meanwhile, Ford implemented transitional and developmental changes to effect a transformational change without government support.
The scope and speed of change in today’s energy industry requires a fourth perspective on change. The industry must create an
asset that did not exist before – a learning organization capable of
adapting to a continuously changing competitive environment.
What can oil and gas company leaders do to create such an organization? They must lead change from the periphery. This requires
managers to do two things: create an internal market for change and
use revitalized units as organizational models for the entire company. More specifically, unit managers create ad hoc arrangements
to solve concrete problems by directing employees’ responsibilities
and relationships toward the company’s central goal. Top managers
specify the firm’s general direction without dictating solutions to individual operations, and spread lessons of revitalized units throughout the company.
Change is mobilized by joint diagnosis of business problems,
creating a shared vision of how to organize and manage an op-
eration. This yields consensus for the new approach, requires the
development of new competence to execute it, and results in cohe-
sion to move it along. Then the new idea can be spread to other
departments. After that, formal policies, systems, and structures
can institutionalize revitalization. Ongoing monitoring will allow
for adjustments and responses to new problems and changes in the
Accomplishing this will require new skills of managers. They
must encourage problems to surface and resolve them at the lowest
possible level. In order to promote the skills of problem solving and
teamwork in their employees, managers must abandon a traditional
control orientation for one of involvement. They must become fa-
cilitators rather than “bosses.” They delegate; they maintain open
doors, and they lead by example. They have skills in networking,
trust building, and transparency of communication.
In order to develop these skills in managers, energy firms must
use all the tools at their disposal. Leaders have three primary learn-
ing resources to draw on to help them maintain their competitive
edge. They are:
Workplace. Structured on-the-job situations and projects allow
leaders to apply new learning. Challenging new assignments can
focus on cross-functional growth, multi-cultural experience, busi-
ness opportunities in growth, new ventures, and turn-arounds, plus
informal and formal mentoring relationships.
Classroom. Today’s action-oriented classroom provides access to
subject matter experts and practitioners. It provides new insights
and encourages experimentation with new ways of thinking and
behaving by incorporating assessment instruments, simulations,
exercises, team projects, case studies, executives who serve as
classroom advisors, and instructors who are skilled in facilitating
experienced managers to learn from their past experiences—and
those of their peers.
Community. The most progressive learning organizations are also
using the community as a learning resource to develop critical lead-
ership skills among their managers. These organizations encourage
managers to intentionally pursue volunteer activities and service on
non-profit boards as part of learning and development plans.
Use of all three of these learning resources promotes continuous
learning and develops the skills of flexibility and adaptability. They
also develop leadership skills in trust building, networking, communication, and empowerment needed to promote teamwork and problem solving at all levels. Leaders with these skills will inspire change
from the periphery—a hallmark of organizations capable of adapting to continuous change in an uncertain business environment.
Frank R. Lloyd, Ph. D.
Associate Dean, Executive Education
SMU Cox School of Business
Culture change critical
for offshore competitiveness