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12 October 2017 3 min read

Transformation agenda no.3 in oil and gas: “Be great”

Birte Fehse

Birte Fehse
Senior Manager - Energy, utilities and resources

In this mini-series on organisational transformation in oil and gas, we’ve talked about the importance of companies retaining the focus on “lean”, whilst also introducing changes to become more nimble. Underlying all of this is the ambition to “Be great”. Having a great culture is what can provide purpose and maintain morale through times of change. It can help attract and retain talent and to reassure investors and business partners. Culture has a profound impact on the decisions people make “when no one is looking” and will cripple any strategy that isn’t in line.  A culture of “production over protection” will eat any safety campaigns for breakfast.

So how do you achieve a great culture?

1: Start with a vision. No company can have a strong culture without being clear about where it wants to go, that includes a vision, strategy, target business outcomes etc. Each strategy entails certain values: if you want the best technology, there needs to be a culture that visibly values excellence in engineering and innovation. If your focus is on commercial deal-making, the culture should encourage a certain degree of commercial risk-taking within framework conditions like hurdle rates, risk appetite, operating envelopes etc.

2: Articulate the implications for organisational culture. The vision will determine the target characteristics of the organisational culture. For example: 

  • Values and beliefs: What are they and how are they manifested and communicated?
  • Behaviours: What behaviours are expected from leaders and individuals across the organisation?
  • Routines and rituals: What kind of routines should be in place, how is culture reflected in rituals and special occasions?
  • Processes: What are appropriate structures, accountabilities, decision-making rights and knowledge distribution to enable the culture?

Culture is influenced by many other factors – but leadership needs to set the tone and create the right conditions for the desired culture to thrive.

3: Be clear on the role of safety and risk. Responsible risk and safety management needs to be part of any organisational culture in the oil and gas industry. To reconcile a strong safety culture with innovation and flexibility, organisations need to be clear about baseline safety expectations in different parts of the business, i.e. where a zero-failure/ continuous improvement approach is appropriate vs where “systematic safe failure” is appropriate to optimise a new product or strategy.

4: Continue to shape culture. Culture forms the DNA of an organisation and only changes slowly over time. It needs attention to keep it healthy and should be a topic that people talk about frequently, from the boardroom to the canteen. Employee culture surveys can be used to monitor company culture, but leaders should also consider making honest culture conversations and observations part of performance reviews and organisational KPIs.
 
Culture is a powerful tool in shaping organisational destiny. In the words of Peter Drucker, “culture eats strategy for breakfast, lunch and dinner”. Organisational vision and culture provide the platform to inspire a new generation. Oil and gas companies can do much to improve their attractiveness to employees and investors alike by focussing on the diversification of portfolios beyond hydrocarbon into renewable energies and different business models to position companies at the heart of a sustainable future.