Back to the floor: A voyeur’s view of leadership in the upstream E&P

Managers in today’s corporate environment have to balance the objectives and demands of their company’s stakeholders with broader business and community priorities. In order to meet this challenge more effectively argue Michael J. Ring and Ted Lumley company leaders should take the time to become more involved with business operations at every level.

This paper presents a voyeur’s view of management and leadership in the exploration and producing (E&P) industry from a systems viewpoint and follows a similar article published in TLE1. Managers today are asked to harmonise their staff customers clients partners technology and processes with business environmental and community objectives while in a state of constant change. Imaging playing pool on the surface of a sphere where all the balls are in continuous motion and you are asked both to sink a shot and to leave the cue ball in position for those who follow you. It is the thesis of this paper that managers must morph into team players reducing hierarchical differences to zero. In their capacity as team players managers will spend most of their time performing and contributing to the various tasks in their business operations. Direct involvement will result in a better understanding of the critical issues and build trust within the group.

Context

We are all ‘voyeurs’ because as Hiesenberg realised one can never become an outside observer without affecting what is being observed. And importantly our observation affects what we observe. Embedded in this paper is the concept of primacy whereby some ‘things’ have a primacy over other things. For example: experience has primacy over knowledge2; implicit knowledge has primacy over tacit knowledge; knowledge has primacy over data and information; understanding has primacy over words; and direct person-to-person contact has primacy over all other forms of communication.

An understanding about the E&P industrial sector should be taken in light of the surrounding complex socio-economic systems interacting and therefore interfering with each other. Complex systems include the communications system (internal/external and informal/formal); organisational systems; learning systems; sharing systems; social systems (teams groups); community systems; ecological systems; economic systems (capital finance banking); social moral systems; and many others. Since all these systems interact with each other ‘strip-mining’ a narrow segment such as technology or organisation or e-business for analysis should be viewed with caution. One should not think in terms of these concepts in isolation. It should be considered in light of the surrounding systems and how it might interact/interfere with each for a more comprehensive understanding. There is a danger of splitting out any of these elements from the greater contextual socio-economic systems in the sense that we may rationalise infer deduce and conclude certain things that may ‘work’ in the strip-mined context but will fail in the overall complex systems interactions.

To paraphrase Wittgenstein accept the propositions ideas and notions in this paper as ladders to give you a sense of what is going on and then throw the ladders away once you have ‘tuned in’.

‘Management’ leadership and high performance teams

We’ve all been involved in situations where a person(s) arises from the group to take charge and lead. Often this leader is not challenged and the rest of the group follows their leadership. These natural leaders represent the collective thinking opinions and sentiments of a particular group. In this sense natural leaders are icons around which the group condenses. Nearly every group has some ‘go-to’ leaders and often this is not the project manager. Positioned managers on the other hand represent hierarchical position power. In the upstream E&P industry most managers rise through the ranks from some specialised discipline such as engineering accounting physical sciences and so on. Their academic strength is based in the sciences – not in business. Furthermore most technical professionals in the E&P industry are products of the ‘Sputnik generation’ for whom the concentration was on science often at the expense of the arts and social sciences. For example take a high performing technical professional. What rationale presumes that this performance should translate into the management/business side? The correlation between outstanding technical performance and de facto management skills has never been rationalised. This is a ceteris paribus issue where one assumes that a technical professional in a certain salary group with consistent outstanding performance ratings is all that is needed to advance that person into a leadership and management role.

Leadership comes in many forms. At the extreme dipoles are managers who exhibit the Warrior Dynasty and those who exhibit the Legacy Builder. This dipole has been previously discussed3 but to summarise Warriors take what they can now. They harvest the fruit for near-term profit and go for quick-fix solutions. In billiard parlance they always try to sink the shots. Legacy Builders are trying to leave something behind when they go. They provide sustenance and growth to the ground that will promote a better harvest. In billiard parlance they look at the placement of balls on the table. Although there are fewer managers within the corporations today all managers will somehow fit into this spectrum. Managers should take care to have a proper balance in their talent bench so as to both ‘deliver the goods’ in the short-term and ‘create sustenance and growth’ in the long-term.

Most management systems are based on causality (management on the basis of material-causal transactions) and its ‘bottom-up’ mode of inquiry. To get an insight into the complexity the behaviours of the whole system are beyond deduction from the behaviours of the parts. In practice exceptional teams do this by ‘managing opportunity’ (potential field configurational transformation) rather than ‘managing causal kinetics’ (explicit work done). High performance teams are greatly influenced by their managers and leaders. More traditional teams use trajectory management which manages people and causal transactions. An analogy would be walking through a crowded piazza. When we walk through each participant manages their movement and space in a way that avoids collisions. These different leadership styles show that ‘shape is everything’ and that one must manage the ‘shape of space’ the ‘possibility space’ or the ‘shape of opportunity’ as seen by each individual. Under pressure managers don’t see these phenomena and revert to their traditional trajectory management4. Draconian focused passionate for technology and relentlessly project-driven; these are the characteristics of many E&P managers today. The bottom line asset-driven focus of most managers does not respond to the practice of knowledge sharing.

The past and present

Traditionally large groups of staff and middle management formed the knowledge network within corporations. These units carried a company’s past and present – the lessons learned the heroes the goats and villains past dealing with partners countries and companies. They told the corporate culture stories of people in the company and how they got where they were where they are or where they should have been. These ‘corporate fables’ are an important part of the corporate ritual in the same way that storytelling is to indigenous cultures around the world. The staff provided the support for companies to make large capital intensive and risky investments. These groups were the corporate experience and knowledge base.

Many companies are spending a great deal of money on knowledge management. Some are attempting to replace their staff/middle management experiences and knowledge with software-based KM tools that can store harness and leverage the corporate wisdom. But no KM tool is capable of doing this.

KM jargon differentiates between explicit and tacit knowledge. Explicit knowledge is easily identified captured and communicated in books manuals and reports. Tacit knowledge is in people’s heads – it is their insight intuition experience and perceptions. This knowledge is elusive difficult to capture and communicate. It is also recognised to be the basis of breakthroughs and has the most value. Thus the best hope we can have for KM tools is the ability to point towards individuals who have this tacit knowledge and experience.

Finally as fewer employees are asked to do ‘more with less’ their ability to share experience and knowledge is curtailed by the lack of time to reflect and think about events. This creates stress and office rage. KM systems will only be successful when the rewards systems are aligned to encourage and foster a sharing and learning ethic.

The future

In a connected world there are knowledge brokers skills brokers experience brokers competency brokers data brokers information brokers technology brokers people brokers equipment/parts brokers – brokers for almost every possible taste. The ultimate added value (money-as-ends) of any management system is better decisions. Complexity and speed are the key elements in management systems today. As knowledge workers process filter evaluate and analyse the high volume of data and information they constantly pass on their complete project to another department person organisation in the value chain. Managers are asked to understand this complex and contradictory information and make decisions. Office politics complicate the decision process. Managers are often isolated from key information metadata about the quality of data/information and missing information. Often it’s what you don’t know that impacts decisions...and you can never know everything. So all decisions are incomplete. To meet this challenge managers have to become actively involved in the entire working process. In doing so they will learn about the data and information and by working with their staffs they can build the requisite trust needed for knowledge and experience sharing.

The ‘practice-what-you-preach’ manager

Henri Poincare speaks of how one chooses one’s theory (management approach): “It is not enough for a theory not to affirm false relations; it must not conceal true relations.” Despite the explosion in hardware and software communication tools (intranets extranets the internet voice mail e-mail videoconferencing mobile telephones and so on) a survey5 found the following results when employees were asked to rank the biggest challenges and gaps between employer and employee:

61 per cent – lack of communication between management and staff
19 per cent – lack of recognition and praise
7 per cent – lack of flexibility scheduling hours worked
6 per cent – lack of authority given to employees
4 per cent – other
3 per cent – don’t know.

These results are the product of poor communication and more importantly reflect the lack of credibility and trust between management and staff. This gap represents a disconnection between the value systems of management (money-as-ends) and employees (people-as-ends).

Complexity theory has the concept of emergent properties which occur when ‘things’ and events come together and create something greater than their individual entities. High performance teams and breakthrough technologies are examples. Tomorrow’s manager will be a generalist – one capable of carrying out a variety of tasks. They will need to communicate corporate strategies to their staffs. They will need a grasp of technology and how this technology will impact their business processes and people. They will need to understand the role of business processes on efficiency and productivity. They will need to establish measurements with their teams. And most importantly they will need to have outstanding people skills so as to motivate their staff to produce the quality work needed for better decisions.

Experience and knowledge of the management system components – strategy people technology process and measurement – will be essential for harmonising them in a way that fits the corporate culture and delivers quality results on time and at the right cost. There are no unique formulae. Each project each team each group each culture and each occasion presents unique problems that will need to be dealt with. This is why new management systems must encourage managers to become intimately involved in their projects. Their involvement should include active participation in all phases of the activities. Simply stated managers should be capable of providing back-up to most positions within a project. They will not ‘manage’ per se they will participate as an active team member with additional responsibilities.

Can you imagine the understanding gained by a manager who is backing up the help desk and learns first hand the customer complaints and problems? Can you imagine a manager making calls on potential customers and learning first hand what today’s challenges are in the market space? Can you imagine a manager gathering evaluating and analysing technical data and learning what data to trust and not trust? The impact on their decisions will be dramatic. In addition to bringing a better understanding of the issues they also build trust between themselves and their staff. Ideally the decision process must incorporate the entire team wisdom but ultimately differences in understanding priority and importance lead to the ‘buck stops here’ position. This individual must digest the input weigh the known factors and ponder the unknown before rendering a decision.

Management systems should begin to focus and measure the success and failure of decisions whether made by a team or individual. Rewards systems that encourage employees and managers to share what they know and learn from each other will produce better business results.

Leaders and management must bridge the trust gaps that exist between employer and employee. There are credibility gaps between what managers say (“Employees are our #1 asset…”) and actions (“I’m announcing a 20 per cent reduction in personnel…”). Managers tend to be process-oriented while line personnel are task-oriented. The rewards system manager salary versus employee salary also communicates what the corporation values and how it values employees. At a recent gathering a manager was proudly stating that a recent discovery was ‘his’ because his signature was on the agreement and that he should get the credit. Statements like this create barriers to trust sharing and learning.

Relationships credibility and trust

Clearly connections greatly facilitate companies becoming ‘virtual’ by allowing instantaneous sharing of key data information and knowledge to anyone at any time anywhere in the world. Thus companies avoid carrying the cost of keeping full-time employees for peak times and will in the future rely on virtual knowledge communities to satisfy their pulsating business requirements. This will put a high value on net-based life cycle integrated software products so that these virtual communities can deliver the expected quality results products and decisions6 7.

The downside of virtual companies is the lack of esprit de corps that is associated with company workers who have worked together before. As one brings together specific multidisciplinary skill sets for a project from net-based communities one cannot expect a high level of efficiency productivity or a trustful atmosphere conducive for team sharing. Teams need time to build trust within themselves. In the absence of a commitment to let net-based teams build the necessary trust for project deliverables companies might need to consider whether to maintain the requisite internal resources to handle key projects.

From a systems perspective the drive for reduced costs will exploit technologies and automate processes in such a way as to reduce the number of people in the business system. By connecting consumers directly with sellers there’s no need for a go-between. As technologies improve in sophisticated analysis there will be a need for fewer professionals in the decision process as machines begin to take over. However from a people-as-ends perspective these ‘disintermediated’ people will lose employment directly affecting their self-esteem their family’s prosperity and indirectly the community which ultimately will bear the burden because it is the community that deals with the unemployed and underemployed.

The importance of time

Time management defines the value equation of company culture. The value equation for leaders is measured by the amount of time they spend – or don’t spend – with employees in meetings and on projects. An employee’s value equation reflects a manager’s disposition towards his/her time management. The most effective positive message to an employee is giving and sharing time with them.

Conclusion

The practice leader/manager is a humanistic generalist. They have a lot of experience and can do many things well. They are accustomed to dealing with complex issues and often thrive on the dynamic flux of change. They are practitioners doers and theoreticians. Armed with their experience they are capable of understanding the entire business (depth and breadth) and when they’re faced with decision making they are capable of balancing and weighing the life cycle elements/factors and acknowledging fuzziness and the uncertainty of the problem...and can ultimately make better decisions. By knowing and experiencing the details of each process of their work and continually actively participating they will have a better understanding of their employees their processes and the key elements in business decisions.

Now let’s throw the ladders away and tune in for ourselves.

References

1. Ring M. J. ‘Round Table – A voyeur’s view of people in upstream E&P’ in The Leading Edge (Vol. 19 No. 6 June 2000 p. 660-664)
2. Ring M. J. ‘Why intranets (and knowledge management) won’t work’ in Virtual Business (February 2000)
3. Ring M. J. and Lumley T. ‘From strip-mining to sustainability in the E&P industry’ in Knowledge Management (Vol. 2 Iss. 9 June 1999)
4. Lumley T. ‘Epilogue to A. Hole to testify in discrimination suit’ in Personal Communication (13 March 2000) and www.goodshare.org
5. RHI Management Resources National Business Employment Weekly (3 October 1999)
6. Ring M. J. ‘E-Business voyeurism – A strip-mined perspective from the E&P Industry’ in Virtual Business (Vol. 4 Iss. 5 April 2000 pp. 7-12)
7. Ring M. J. ‘E-Business voyeurism part II – People-power in the E&P Industry’ in Virtual Business (Vol. 4 Iss. 6 May 2000 pp. 11-14)

Michael J. Ring can be contacted at: mring@chromaenergy.com