denotes premium content | May 24 2013 Feature
posted 1 Jun 1999 in Volume 2 Issue 9
From Strip-Mining to Sustainability in
E&P Industry
A healthy evolution of Knowledge Management (KM) practice in the
E&P industry is essential to the sustainability of business know-how and
human resources. But this is being impeded by lack of trust in the workplace.
The most significant contributions from KM will come through the dynamic sharing
of knowledge within the operational heart of a multi-disciplinary team.
Knowledge sharing cannot work in the absence of an atmosphere of honesty, trust
and humility. The continuing cycle of mergers, acquisitions and downsizing,
exacerbated by the oil price uncertainty, has destabilized the work ethic with
the result that KM practice has shifted towards a strip-mining mode and a
non-renewing consumption of knowledge assets. According to Michael Ring &
Ted Lumley, while recovery from the deficit spending KM trend is not likely in
the short term, it is important for management to understand their long term KM
processes.
The heart of Knowledge Management is dynamic sharing within teams.
Sharing requires an environment of honesty, humility and trust. But the E&P
industry is currently surfing a trend which undermines the ideal KM environment;
one of MAD-ness (Mergers, Acquisitions, Downsizings) which undermines the
conditions for evolution of KM. In the short term, it is relegated to a
degenerate form of non-sustainable knowledge strip-mining which consumes the
people-resource as it consumes their knowledge.
Today, our E&P teams
are being asked 'to do more with less.' In an increasingly fast-moving pace
of business, questions of sustainability and resilience, of stakeholder
and environmental impact join with mounting financial imperatives to suggest that
'doing things faster, cheaper, better' is no longer sufficient. The issue is no longer
one of 'doing' but one of 'being.'
'Learning to be is essentially a
character building activity. It is about values, worldviews and identities. It
involves desires as opposed to abilities; the capacity rather than the content,
the direction rather than the speed, the why's rather than the how's, the
feeling rather than the thinking, the meaning rather than the action, the
process of becoming rather than the state of having. It is about doing the right
thing rather than doing it right.'1
Instead, we
must allow 'who we are' to evolve so that we 'do the right things' in response to
dynamically defined team level business requirements. This is a knowledge
management requirement that would have us come out of our disciplinary tortoise
shells, expose our ignorance about other aspects of the business processes we
support and allow ourselves to be continuously redefined by the unique and
dynamically changing needs of our trans-disciplinary work processes.
The search for
any understanding begins with an understanding that the subject of the inquiry
is the community itself - us! Not the tools. Not KM. We are all part of this
community and are immersed in a complex system. Knowledge is people sharing
things about what they know; interacting and sharing ideas, good and bad
experiences, stories of success and failure, tales; sharing in the act of doing,
reaching a collective understanding of the issues on the fly. Mutual trust,
honesty, and humility 2are absolutely
essential for this type of sharing to occur.
While the explicit component of
knowledge can be captured in reports and stored in repositories, tacit knowledge
requires immersion, online experience and sharing in the act of doing. Explicit
knowledge can be written down and diagramed because it involves a static,
non-evolving equilibrium process. But the assimilation of tacit knowledge allows
you to tune into the relational geometry of things and how these things react in
given situations; an essential requirement where the ensemble of business
processes are co-evolving. Tacit knowledge can only be accessed
experientially.
Knowledge management & knowledge types
According to Thomas Petzinger,
Knowledge Management is 'an oxymoron & faddish phrase used by vendors to
jazz up computing and consulting products& you can manage information but
not knowledge & instead of trying to categorize knowledge, smart companies
will inspire sharing.'3
The oxymoron critique
associates with the fact that one can't manage tacit knowledge. One can manage
data, information and processes, which can be proceduralised. However, tacit
knowledge enables you to co-adapt your actions in response to the real-time
behavior patterns in your immersing environment. To date, explicit procedures,
including software and hardware routines haven't shown much sensitivity to
what's happening around them and Goedel's Theorem says they never will.4
Many KM software
products are knowledge access oriented, in the form of access maps and
knowledge repositories that attempt to identify, document and catalogue who in the
organization knows what. They document peoples' experiences, and how to contact them
to leverage their knowledge on projects where their experience is relevant.
Knowledge access management equates to 'experience mapping' with people at the
nodes. However, there is no guarantee that resources you locate can be 'managed.'
Tacit knowledge and experiences themselves resides inside people' heads, and
there's no way to know if it is being used. For example, tacit knowledge may allow
an employee to see that a colleague will be unable to handle a difficult
incoming assignment from a new manager, and he has the transparent options
of 'backstopping' for the colleague or ignoring the manager's mistake and letting
the assignment and assignee fail.
Not only is tacit knowledge
intrinsically unmanageable due to its relational nature, it derives from complex
sharing processes which are beyond the ability of management to orchestrate from
above.
A
people-share model
The common vision in the E&P industry is one
of concurrent, real-time sharing of information within a multi-disciplinary
team. The integration includes both static and dynamic components, optimized
over the entire life cycle from the well bore to the petrol pump. Concurrent
visualisation by these professionals will generate interactive mental creativity
and potential for modifying existing processes. This vision presents the context
from which the impediments to sharing are understood.
In dynamic
systems, there are two things to consider: the way things are 'meant to work,' and
how things 'could work' if some of the work processes in the system were modified. When we
talk of sharing, we want to encompass the sharing of views to support both 'what we
do' as well as 'how things relate' relative to the business opportunity. This opens
the door to 'what could happen,' either positively or negatively. This bears
directly on effectiveness (cost and quality) of the planned development, on the
capture of emergent opportunity, and on issues of safety and environment.
An example
of real-time sharing of information in the Exploration and Producing industry
is illustrated in Figure 1. We show different disciplines, different sources of
data, and importantly, different views of this technical data. Each discipline
has a particular technical 'view' of the data, which ties back to a wealth of
prior experience and business implications. A geophysicist is accustomed to
viewing subsurface layering with acoustic waves (seismic data). Amplitude,
wave character, shapes, continuity etc. all reveal something about the
subsurface. Geophysicists generate depth maps, which are used to define the structural
shape of prospective areas and enable the selection of drilling locations.
A petrophysicist views the rock column in terms of physical responses
to electrical, sonic, nuclear stimuli etc. which yield properties about the
rocks and their physical characteristics. A geologist is accustomed to thinking
about the subsurface as a lithologic depositional process or system model that
shows what types of rock were deposited where and why. The geologist uses
rock samples, depositional models, rock characteristics such as
porosity, permeability, geochemical data, etc. together with knowledge of
natural processes, to reconstruct the genetic history of the rock formations.
He/she then predicts the type of rock within the prospect area and what kind
of production capabilities it might yield. Each discipline has its
own interpretation / prediction of the subsurface. All have different academic
and experiential backgrounds in the sciences; all gather their data from
different sources; all have their own 'view' or disciplinary jargon as well as a 'team
lingua franca' to facilitate knowledge sharing.
E&P business
model
One can model the E&P business in terms of the
harmonization between the technological tools used to solve business problems
(people); the work processes that define the relationships between work
activities (people) and the people / teams. Note that the essential aspects of
technologies and processes are in peoples' heads. We expose this model to
highlight the special space where elements converge in space-time and emergent
properties develop. This special space is the domain of high performance teams
and breakthrough practices.
This often used paradigm shows that,
in order to achieve the breakthrough benefits of these factors, technologies and
processes must be harmonized and coordinated. It is knowledgeable people rather
than technologies and processes who are the orchestrators of harmony. The
central region, where the three circles overlap, is sometimes known as the zone
of emergent properties, and it represents that region where high performance
teams and breakthrough practices come into existence.
A few examples
are given to support the nature of this special space of emergent
properties and its sensitivities. One is the emergence of the Internet. The emergent property
(WWW) is greater than the sum of the contributing parts. All these parts came
together in time and space and formed something entirely new, something that was
significantly more than the parts. The second example comes from Lester Thurow6, which shows the implications of a
mismatch between technology and ideology. He notes that China had invented all
the technologies necessary for the industrial revolution hundreds of years
before Europe, but did not have the supporting ideologies. In China, new
technology was perceived as a threat, not opportunity; innovation was prohibited
as the fear of being wrong dominated the desire to be right; and, finally,
Confucius-ism contained the solution to everything. The way the industrialized
nations are sorting things out today, perhaps China was correct!
The emergence of an
entirely new business process or activity happens more easily in the free
market, outside of established companies, since old components are dying and new
ones emerging all the time, as evolution requires. The internal politics within
a company must emulate this with a willingness to back off one's traditional
activity and allow new ones to encroach if there is to be a central zone of
emergence. This is far less likely to occur in the absence of an environment of
trust.
Barriers to collaboration, cooperation and
sharing
Below are some factors that are known to influence peoples'
willingness and ability to share:
Honesty about business
priorities
Money-as-ends and people-as-means, or vice versa? This is
the gap between words versus actions. For example, when the company line is that
'people are our number one asset,' yet employees continue to be under the threat
of headcount cuts, the ambiguity of 'which people' erodes trust.
If it is money as ends
and people-as-means then, the central focus is about better decisions; more
money, greater efficiency and effectiveness. If it is about people-as-ends and
money-as-means, then it's about relationships; how the parts fit together and
harmonise with each other. It's about looking at all the stakeholders and at the
whole systemic pie, not just the financial parts. While there seems to be a
definitive shift towards 'people-as-means,' effective sharing is more likely in
people-oriented environments.
Time to think, reflect and
evolve
Knowledge sharing is in conflict with the job
responsibilities of the individual because it takes time to build trust between
people and to give proper consideration to their ideas. And this time is taken
away from the work commitments imposed on the individual. When people are busy
responding to day-to-day individual work commitments, their 'time to think,
reflect and evolve' is diminished.
New knowledge is
created when people have time to think about things. Many people in the E&P industry
do not have this kind of time to be creative and innovative. A Harris pole
shows that in 1973, people worked about 40 hours per week. In 1997, they were
working 51 hours per week. Although knowledge work occurs during the 16 hours of
waking time, productivity and efficiency are impacted by the longer work hours.
Balancing work and leisure has been shown to improve both a person's work output
and their attitude towards work.
Though the requirement for intensified
sharing in teams carries with it some initial investments in interpersonal time
allocation, the individual's available time is typically shrinking in the
current environment.
Exploitative and Nurturing
Employers who strip mine
employees' knowledge and do not re-invest in their continued development, are
exploiting their human resources. Knowledge work requires time to think; without
this, meaningful understanding is very difficult to achieve. Living
hand-to-mouth (ex. Strip-mining) without sewing the seeds for future (ex.
developing people's potentials) use is exploitative.
Employers are not going to achieve the
workplace environment of trust, honesty and humility in a strip-mining shop.
They cannot expect to draw on the benefits of that type of team knowledge
sharing; namely sustainable knowledge development as environmental and business
conditions change.
Warrior dynasty and legacy builder
These are end
members of the management / leadership spectrum. Warriors exist for the
corporate purpose. They take what they can now; they harvest the production;
exploit their resources; focus on near term gratification and, in billiards, are
more interested in sinking as many pool balls as they can, neglecting how they
leave the board after they've completed their run. Legacy builders want to put
back into the system at least as much as they take out, whether that is to the
employee, the customer, the community or the environment. They want to leave
something behind; focus on sustenance and growth of the roots. They encourage
innovation and creativity. They focus on the long term and in billiards, are
more interested in the table shape, leaving set up shots for those who follow.
They are the orchestra leaders who exist to keep the music flowing.
The salient point is
sustainability, which is a major issue in all environmental and business systems
today. The legacy builders' way is the way of sustainability. If new growth
replaces what you take you always keep the ball configuration in harvest-able
shape. Whereas, the warrior is simply interested in getting a bigger share of
the existing pie and does not cares for sustainability. The quick win approach
of the warrior mentality clashes with professionalism, and also with
environmental and stakeholder considerations which are important to
trust-building in team situations.
Monetary rewards
systems
A very important element to encourage sharing is the
rewards system. We believe the most powerful reward is ones' personal development
and the chance to 'do your thing,' except where people are at the survival
threshold. These comments address monetary rewards. This common-sense notion
leverages Adam Smith's7 observation about
the invisible hand and self-interest. In the domain of monetary rewards, the
gap between Senior Management and the professionals doing the work is staggering,
especially in the developed countries. Gaps between the CEO s
package and the average wage in the same company typically vary from 10:1 in
Japan to 20:1 in Europe to 200:1 in USA. The irony is that it is these lower
paid workers, who, through working harder, improve productivity, cut costs, and
deliver the increased earnings. This in turn, not only fuels the continued
separation of 'have-mores' and 'have-lesses' within the company, but also brings
about their own redundancy and boosts shareholder returns to garner continued
support for escalating management compensation.
E&P professionals are
knowledge workers
Most large organizations in the E&P
industry are legacies of the industrial age mentality of economies of scale;
departments broken down by disciplines, and similar work activities. This legacy no
longer reflects what knowledge workers do. E&P technical professionals
are knowledge workers who 'process' data and information then share the results with
others. A NORSOK study 8showed that
over 50% of the costs associated with an offshore development project are
associated with information handling and work processes. The emerging
efficiencies are associated with economies of integration.
If you accept that timely access to
quality information is the key to better decisions by people in
multidisciplinary teams, then some key questions would be:
'How do I organize around the flow of
data and information to optimize my decisions?'
'How can I efficiently
transform volumes of data and information into something that can be used in my
decision process?'
'What do I know? What do I need to know? Who knows it?'
Regarding
measurement, a 1997 E&P industry study 9, revealed the following breakdown of
activities for employee time allocation in E&P companies:
 |
Looking for information: 60% |
| |
Useful Work: 17% |
| |
Training: 3% |
| |
Meetings: 5% |
| |
Coffee Breaks: 5% |
| |
Vacations: 10% |
It is remarkable that most employees will comment that the most useful information they receive is usually passed between themselves during coffee breaks, and informal discussions. Most geo-scientists will confirm that a good deal of quality checking, filtering, editing, discarding, and generally, high-grading the information is done during the search for information. Sharing can best be measured by the interaction of teams, their relationships and their results; not by measuring how they spend their time.
At a project level, teams start with some knowledge base of how the project is meant to work. The team grows (creates new knowledge) as they discover how the project 'could work.' Both people and knowledge are developed or evolve by the process. This doesn't happen if you don't have good team dynamics (trust, humility and honesty). Knowledge sharing teams get the job done, grow the knowledge and people's experience and tacit knowledge is developed. Ask the right questions and measure the right things.
High performance teams, projects & breakthrough practices
A group of E&P professionals' 10examined the critical success factors required for a successful project. Their list includes the criteria they observed during successful IT/IS software projects:
1. General - business need. Potential for commercialization. Short duration. Clear milestones and deliverables. Clear roles and responsibilities. Champions identified. Cost benefit analysis throughout the project.
2. Project Methodology - Dedicated and effective project manager. Experiences and trusted leader. Prefer skilled project members versus money. Effective and frequent communication. Co-locate project team if possible. Agree on collaborative tools.
3. Post Project Activities - follow up on commercialisation. Broad communication to industry. Presentations on success and failures. Communications on financial benefits.
All these project qualities are important but when they are juxtaposed with people-as-ends, you realize that successful projects are all about the team, i.e. people sharing what they know with others and learning from each other. Trust, honesty and humility are the critical success factors which characterise breakthrough projects. The source of rich knowledge comes from the harmonic interactions of the team and does not accumulate as the sum of the parts of the individuals' knowledge. The cultivation of knowledge sharing as a brewer of new knowledge and new knowledge-producing agents (more experienced team members) is very important.
Imagine taking a fully-qualified professional, testing them as a baseline, then putting them on a high performance team for a year. Bring them back and test them again. It is unlikely they would test any differently in their discipline, but they would be a more valuable resource because of the acquired tacit knowledge of how the overall process works. This new knowledge shows up in the way of working and not in the technical disciplinary area, the manner in which they work to gather only the knowledge necessary to do the right things.
Summary & conclusion
Knowledge sharing occurs in an environment of trust, honesty and humility. Companies who foster this environment will create a suitable state for high performance teams and breakthrough practices to develop. Knowledge management, which contributes to sustainable business and human skills, is predicated on the development of this environment of trust and sharing.
We are all part of a community immersed in a complex system of the E&P industry. We're all intelligent people interpreting the same information differently, prescribing different solutions. There is no recipe that fits everyone. Each individual and company must understand the whole knowledge challenge and decide which parts fits their 'personality.'
Michael Ring has spent over 20 years with a major international oil company and over 4 years with POSC. He is now a Consultant with Good$hare. He can be contacted at: Ring@POSC.org
Ted Lumley is a Consultant at Good$hare. He can be contacted at: emlumley
