Digital Oilfield (DOF) project implementation and operations have a hard time dealing with the people management side of projects ever since the first projects kicked off some 15 years ago. Still, today projects don’t always deliver against expectations. Research and experience show that this has seldom a relation with every year improving technology, but often with managers and employees not engaging, amongst other critical reasons like obsolete company cultures or organizational limitations. The interest in digitalization of oilfields is bigger than ever so it’s about time to find better ways to deal with people issues.
Around the same time change management was globally developing into a professional discipline, National Oil Companies (NOCs) started to become aware that DOF projects didn’t deliver against expectations, often as a result of people management issues. The new discipline called Change Management was identified as a possible solution to the challenge. That thinking was correct, but the execution wasn’t. Change management wasn’t understood or identified as a critical company matter, but seen as part of the project solution ending up in DOF tenders as an ad on, thus overnight becoming the responsibility of vendors. No need to say that they initially didn’t have a clue how to deal with it either or how to knit CM into their technology-based projects. On their turn, they passed the issue on to free-lance consultants and when that didn’t work either, to the leading consultancies and when that didn’t work either, the whole industry scratched its head. What was wrong?.
Change Leadership Office
The thinking error of the early DOF days, never adjusted, is that Vendors can do change management! That was a mistake by all means. They themselves were subject to large internal innovation processes and often unable to help themselves, let not only say their clients. Ad on change managers had littñle or no authority or power to come even close to any chance of delivering outcomes. And even large consultancies didn’t stand a chance against immovable legacy based dinosaurs like NOCs.
At the moment there are many attempts in the industry to inject Change or Innovation Leadership into the company’s DNA, even with a formalized Change Leadership Office that delivers know-how, expertise, capacity and planning and budgeting while coaching and training all managers on all business-critical company projects. This could be part of a way forward for the O&G industry and DOF projects, but I have no information of such attempts so far.
Technology providers have a stakeholder role and responsibility in this area, but it was a misconception at the time to ask them to take the innovation lead. They cannot be responsible for defining the company’s values around new technology usage, or influence managers or employees on shifting roles or even suggest organizational or cultural changes. Informing and motivating employees is the sole responsibility of the leadership team and its chain of command. They have the authority, the respect and the trust of their employees to lead them. Not the vendor or a consultancy! NOCs can do two things right now, both critical to the business and DOF: 1) stop asking vendors to deliver change leadership and 2) build in-house competency and experience that can feed into the chain of command and take the corrective actions surely needed.
That’s a paradigm shift in DOF after 15 years of trying to do it through the vendors and a chain that NOCs need to break, assuming own responsibility.
Start building own change leadership competence and expertise
I am convinced that legacy companies like most O&G industries need to build up internal change leadership competence and know-how, supported by external service capability and muscle and cross-related to Human Resources, Communications and Marketing capability. This will bring line and consistency in approach, strategies and policies, no matter what the next project will be or which vendor is selected. Such unit delivers companywide change leadership:
- Develop and own the company innovation methodology
- Develop and own the toolset
- Continuous improvement focus on tool development
- Developing and owning the training plan
- Developing and maintaining communities of stakeholders
- Coach Sponsors
- Coach managers and supervisors
- Provide change management resources (people) to specific projects
- Provide advisory CM support to teams
- Portfolio management of all change projects in company.
- Financial planning and budgeting
- Performance Monitoring
- Risk and Benefits management
- Central repository of information from all change managers (internal and vendors)
This new development brings up the question where to concentrate such expertise. The common solution in many other industries is setting up a Change Leadership Office (CLO). As all new developments, its “ownership” is subject to discussions in many companies and the three most obvious solutions are the Project Management Office, Human Resources or a stand-alone independent unit that reports into the Boardroom. In still transactional cultures I recommend the last option as the CLO will not only play a role in organisational change, but also in cultural shifts which implies taking difficult decisions that will only be possible to execute if fully backed up by the Board Room.
What about the vendors?*)
Vendors will be asked to deliver what they do best: state-of-the-art technology. In the new work process it will be the NOC’s Change Leadership Office (CLO) who will guide the vendor – not the other way around – and assess them about the company CM standard and how to organize and coordinate with the Office and all other involved service units, like Project Office, Communications Department, Learning & Performance, Organizational Design, Lean management, SHE and such. All need to deliver to the project at some point to make DOF work. Building up own CM expertise and execution capacity to the level of becoming a business standard with defined work processes, controlled by the company, is probably the best way out of the woods into professionalization and education of the chain of command and the vendors!
What about company managers?
The NOCs chain of command holds the final responsibility for successful DOF operations, and for that sake, any other project. That’s why you have managers! The role of the CLO is to enable them to assume and execute new roles and responsibilities properly. If your managers are well prepared in their CM sponsorship-, coaching-, teaching- and communications roles, they will have gained the trust and respect of their employees, who will move with them towards whatever new ways of behaving and working are needed as a result of ever changing technologies and market conditions.
Who is DOFAS?
DOFAS helps Companies to develop in-house CM expertise, organize their CLO and embed it into the business, helping companies move towards improved cultures and operations, including professional DOF operations away from empty RTOCs, unwilling employees or resistant managers.
- Gain better understanding of Change Management principles and methods and Team Work, on top of their technical expertise. This is something that will soon become the new requisite in DOF tenders anyway as CLO’s will not ask vendors to take responsibility for change management, but deliver consultants prepared to team up quickly with internal staff and collaborate in constructive ways. In a way, all vendor consultants need to gain much deeper understanding of change management and their project managers will need to become also change managers.
This means that vendors will need to:
- give their client facing consultants and project managers emotional education and
- teach them empathy, while becoming
- much stronger in communications (dialogue, presentation, negotiation, conflict handling…).
What about today?
The above new ways will develop over the next years. In the meanwhile DOFAS helps all find and apply the possible improvements on change leadership, within existing scopes and budgets, while preparing the ground for future structural solutions.
For more information or a personal interview, give me a call (+34 667631510) or send a mail firstname.lastname@example.org