The 5th edition of China’s Digital Oilfield Conference finished this week in Qingdao. I was invited by the Petroleum Faculty of the organizing University of Xi’an to organize a Workshop on the topic of driving the mainly technology focused DOF projects in China towards more holistic and business wide transformation. The topic has the attention of the Chinese NOC leaders. Over 50 attendees, many of them mid- and higher management from different National Oil Companies, attended the Workshop and showed great interest in the subject.

Re-architecting a digital enterprise – a holistic approach

Dr. Jane Ren (CEO Atomiton), whom I invited to co-host the event, and I gave an overview of how the intra- and interpersonal relations deeply condition and influence IOF outcomes as wins come from deep and cross discipline- and domain collaborations, often in real time. We also addressed how this translates into a structured holistic approach around the technology-, business-, operations- and policy stack with their very own and differentiated speeds of change. On top, Jane’s “Silicon Valley experience and vision” on the current and near digital future impacted the audience as they do not often get such a candid and open look into the kitchen of digital innovation. It’s clear that such innovations are true “globalizers” that will sooner or later sweep across China and impact their enterprises deeply.

The audience was strongly divided over such a “revolutionary” approach (for this audience), especially since the digital transformation may require removing ill-adapted and change-resistant managers and replacing them with transformational leaders. All could relay to the idea, but back in their heads, isn’t it safer to focus on processing “Big Data” than on processing organizational changes? The truth is, we all know that safe paths never lead to revolutions. The entire economy is reshaping itself digitally – by the hour, and it won’t wait for any particular organization, country, or even continent. Although some may argue that this holistic change approach does not apply to Chinese NOCs, many more showed a remarkable flexible mindset and are eager to invite us to engage as soon as possible in follow up meetings to study the opportunities for them.

Attendees engaging in a stand-up collaboration exercise, showing the extreme power of instant collaboration, even without previous preparation.

A cultural perspective

The deep division between those jumping on the innovative bandwagon, which as we presented can boost ROI by billions, and those who prefer to walk the “safe” road, is expected. Some people see what they can gain from change, others see what they may lose from it. And others, unfortunately, see any change as a loss.. Those are the ones that need to be removed soonest to make room for the needed innovations, also in leadership.

One interesting observation from this workshop is that those doubtful about such innovations were not at all showing fear for change or reluctance over new ideas. On the contrary, they most happily engaged in the illustrative activities we scheduled. The hesitations I observed amongst leaders seemed more coming from deeply rooted and “baked in” pre-judgments about how “the highest chain of command” will react to what they heard, expecting maybe a “That’s not for us” as an answer, which could be out of line with their own believes.

It indicates that there might be much more willingness and readiness amongst Chinese NOC leaders than some may think, but the current culture of not sharing information and feelings with each other, as heard several times from conference speakers, is hiding a maybe much more advanced but not outspoken IOF vision? Or at least will give new perspectives a much better head start than some attendees may anticipate?

Billion dollar opportunities

If so, my focus would lay on the improvement of lifting these cultural barriers, while improving the transformational leadership capacity and skillset which all together could turn these NOCs into high-speed business transformers. If IOF can be the trigger of it, it will turn IOF projects from endless budget consumers to lucrative money makers (more stable and safer assets, increased production, decreasing decline rates, less staff…) with the “bonus” of using them as companywide transformation instruments. The difference can be expressed in tens of billions of dollars.

André Baken