The difference O&G leaders can make during times of change
insights from an HR perspective
Author: Huma Qazi, 9 Apr 2015, London
Every crisis brings with it opportunity. With the changing energy landscape globally, tumbling oil prices, comes the urgent need to revise strategy. Oil & gas companies are reviewing their strategic outlooks and forecasts, and will be taking the time to adapt to the current climate and within it seek opportunities for transformation, innovation and forward planning.
Opportunities are presenting themselves to a wider service industry supplying a variety of solutions for the oil & gas sector. They are reviewing their business models to capture this era of imminent change as corporate spending drastically slows down or is ceased altogether and commitments change for not just 2015 but for the next couple of years.
People as a Strategic Priority
How organisations adapt and align their structures highlights that people are a strategic priority in all of this to deliver this change and sustain the revised business plans. However, this cannot be tactical, rather needs to go back to a core strategic framework along with an interim recovery plan based on growth scenarios in line with approved budgets to rebuild the organisation in a stable manner as activity levels increase again. How many organisations adapting their business strategy and business plans are then in tandem accurately realigning their people strategy into corresponding people plans? How well is that being communicated properly at board level and across the organisation. How equipped are leaders to communicate these messages with authenticity and purpose. Is the partnering between HR and business leaders stronger than ever to ride this wave?
Whether your business is national, regional or global, the building blocks are the same.
Whether you are a large-scale organization, or an SME within the industry, these basics apply and can be built upon. Whether there is a scaling back of CAPEX or OPEX, the fall-out and knock-on effects inevitably have a people impact. Most integrated oil and gas companies are scaling back capital spending and curtailing early-stage projects.
Knee jerk reactions and the immediate scurrying to cut operational costs does not always present a sustainable people solution. The nature of short-termism and call to action in order to demonstrate results can be at the heart of tactical decisions on the people front.
A lack of strategic intent and planning can weaken an organisation in the medium term, when it should focusing on sustaining operational effectiveness and competitive advantage and not having to face more tactical decisions in the medium term to survive the next hurdle.
What are the opportunities being presented? In an industry, where we are in a state of oversupply, this is also the situation from a people perspective. Organisations going through change can inevitably destablise an existing organization. Motivation wanes and engagement levels can be compromised as organisations attempt to do more with less.
Ask….What should I be doing?
As a business leader, ask yourself the question….as we change our strategic forecasts, have we looked at how existing talent will deliver what we need in the short-term and medium term? Challenge yourself and your organisation with your cost cutting exercises and reducing the workforce by 10, 20 or 40% to also ask the question;
‘Have we in parallel identified the top 5% that are our critical resources, or our top talent or our key knowledge owners and what are we actively doing about retaining them?’
The potential damage done by the loss of such talent towards innovation efforts, leadership, operational efficiency is easily underestimated and overlooked during such times. The replacement cost of this talent pool is too high, monetarily and emotionally; it can drain an already strained organisation further.
Be aware of the consequential impact on behaviours, attitude and perception within the organisation. Losing credibility can impact organisational momentum and performance. You’re not only looking to retain. You’re looking to be more effective, efficient and agile in how you run operationally. Downscaling requires reengineering how people work, with less process and more impact and without forsaking compliance, quality or safety.
What about existing top talent and critical resources?
Your top talent are the most likely to leave and their departure will hurt your organisation. It’s not just about seniority, it’s about core competencies, innovation and leadership qualities which can exist even at the most junior levels.
By identifying existing top talent, critical resources and hi-potential employees in a more structured manner, you can solidify succession plans to properly identify skill gaps.
Without fail, during this time you must know:
- Your top talent
- Your business-critical talent
- Your key knowledge owners
Top talent is typically 5% of your total organisation.
- With another 5%-10% allocated to critical resources and your knowledge keepers.
- During this time of uncertainty, it is imperative to identify them, engage them and not lose them to the competition.
Recognition and Feelings
We all tend to forget that people run businesses and ultimately what drives a person to perform and outperform to their utmost potential in any environment is when organisational leaders understand and meet the needs of its people. When an organisation can align what their people value to what an employer values, you create a bond of trust underpinned by a belief system and set of values. You give your employees the right environment to succeed.
When communicating change, step back and take stock of the message that you are giving to those leaving and to those remaining. Are you being consistent with your words and rationale across your organisation. Are you confident that decisions have been taken amidst people strategy revisions and as a consequence, your people plans have been adjusted for the year along with tweaks to your established key performance indicators.
Following through on these doesn’t have to cost money. Retention and recognition doesn’t have to guarantee payouts. Money motivates but true incentivisation and confidence results from relationships, conversations with leadership, openness, integrity, job clarity and with greater autonomy within roles.
Are leaders adequately equipped during these times of change?
Authentic, vocal, visible and authentic leaders need to take stage. In fact their role to step up increases manifold during such times. Have you equipped your leaders to go through this and given them an understanding of the messages that need to be delivered?
Leaders are at the helm and ultimately accountable for ‘how people feel’ during this time.
Communicating with authenticity and consistently requires openness, honesty and integrity.
It requires having conversations that are meaningful, eliminating vagueness and ambiguity, committing to deliver value for these critical resources, yet not overpromising to disappoint.