In this evolving landscape, leaders must balance speed with ethical considerations, ensuring decisions promote both profitability and sustainability. By fostering a culture that values ethics, leaders can build trust and loyalty among stakeholders. Ultimately, the future of the Oil and Gas industry hinges on this delicate interplay of speed, uncertainty, and ethics.
The Oil and Gas industry is volatile and challenging by nature, subject to the currents of geopolitical economies, the omnipresent oversight of government regulation, the incessant scrutiny of environmental interests, the overarching awareness of social responsibility, the unwavering need for capital and human intensiveness, and the unyielding need to continuously improve. Leadership requires the uncanny ability to address external business pressures in combination with internal needs and objectives. Today’s leaders in industry, energy or otherwise, must be resilient to weather the storms of external forces and yet be nimble and adaptable to respond when opportunities present themselves – a unique combination of your favorite Superhero and Gumby.
Traditional leadership approaches relied on well-defined roles and responsibilities, established hierarchies and clear communication channels – at least that was the intent. Performance, and ultimately success, was predicated on clearly defined strategic and tactical plans, directed through an authoritarian chain of command, utilizing established and ingrained business methods and practices. Management by in large was focused on specific goals, controllable costs and desired efficiencies. Organizational leadership tended to rise up through the ranks based on performance related to technical expertise and bottom-line contribution, sprinkled somewhat with a “good ‘ol boy network” component. This leadership style served industry well for many years, but the world has changed as has the need for it, and its leaders, to adapt.
Oil and Gas has a well-chronicled history of “boom and bust” characteristically spotlighted by windfall profits tax proponents and collusion conspiracists during the good times, but also littered with the massive losses of the “would haves and could haves” and the legions of long-time industry faithful as collateral during the bad. However, as painful as it may have been during down cycles, industry demonstrated it resiliency through innovation and technology. Even when times are good, industry leadership has always fostered the need to continuously improve. In essence the industry was forced to re-invent itself or perish. Step-change technical innovations along the upstream value chain from drilling tools and practices (horizontal/extended and steerable systems), completion procedures (fracking), and operations (automation and digitalization) to name just a few have not only rejuvenated industry but re-invented itself.
Business sustainability is driven by leadership’s ability to adapt to industry dynamics and disruptions. There has been much written about “agile” leadership, a new progressive approach to leadership emphasizing attributes such as responsiveness and collaboration, creativity and autonomy, experimentation and decentralized decision-making, mentor and employee empowerment, to list a few – all valued and needed characteristics of leadership given the ever-changing complexities of the business environment and competing internal demands. As much as I am an advocate and supporter of agile leadership, I wanted to highlight the importance of 3 leadership characteristics in particular: speed, uncertainty and ethics.
Speed in decision-making is critical when facing volatile or disruptive business markets and being a leader in capitalizing on business opportunities. Although speed is the desire, sound decision-making is the requisite. Both are achievable when information can be assimilated and assessed quickly and comprehensively by enabling teams, leveraging data management, promoting open communication and streamlining decision processes. Leaders need to also embrace uncertainty, accept it as an inevitable – it’s every bit a part of business as it is in life. Flexibility, risk mitigation and responsiveness needs to be built into strategic planning and business processes, with an emphasis on open-mindedness. In all business endeavors, corporate responsibility is that voice of conscience that serves as the moral compass on which a leader conducts business. It cannot be understated the role Leaders have as stewards of company resources provided (capital and personnel) and impacts company actions have on it business environment and stakeholders.
