By Geoffrey Cann
Digital innovations are slowly unleashing the digital front line oil worker, but are the workers ready to deal with the change?
The Digital Front Line Oil Worker
Two recent interactions with managers in front line work in oil and gas prompted this week’s article.
In the first instance, a corporate group asked me to present to a group of refinery workers about digital innovations impacting refinery operations. The pandemic highlighted to their Board how digital businesses fared much better during the downturn. Certainly the reduction in demand for refined petroleum products contributed to their depressed financial results, but those businesses in the group that were more digital in their operations seemed better able to pivot and turn what was the worst trading environment in memory into a growth opportunity.
We have all been party to this shift. Amazon has grown dramatically, as has Zoom, along with home food delivery, on-line ordering of all kinds, digital entertainment, streaming services, and a host of other innovations.
The Board and management team had been promoting digital innovations outward from the corporate center, but digital innovation in the front line of the business (refineries, power generation, renewables), was lagging, and the pandemic had forced a reckoning.
In the second case, a front line manager in a midstream business wants to advance the ability of her team to cope with changes coming at them from the corporate center, and to boost the ability of the front line to innovate directly. The front line team consists of a handful of supervisors and a platoon of maintenance operators who carry out a daily program of service activities on the equipment under their mandate.
This group, and many others in similar settings on thousands of industrial sites, is on the receiving end of an ongoing stream of corporate initiatives to boost performance, improve productivity and cut costs, which they slowly and begrudgingly embrace. But the latest innovations are all digital, and unlike classic engineered works (which are essentially frozen in time once implemented), these digital solutions continue to evolve as new features are added. Change campaigns themselves are changing from the Big Bang model of the 1990s and 2000’s to a continuous change model. The ability to embrace change needs to speed up and become ingrained, or the unit will continue to fall behind. Attracting new talent to work in this setting will become increasingly difficult as its work practices fall further and further behind.
The Non Digital Front Line Oil Worker
Many years ago I was working with a multinational oil company on a project to transform the customer retail experience in their convenience store network. This multi-faceted program involved a full redesign of the retail experience — all new signage, displays, uniforms and in-store technology. Over 6000 front line workers were impacted.
A key part of the transformation was the new customer experience — the interaction between the customer and the retail worker needed to fit the new retail design, and it was here that problems began to surface. The old retail design was based on a human control model, since the store processes were clunky and manual, the cash register and pump technology old and limited, and there were few security measures to deter theft. The retail workers were hired because they were great at controlling this obsolete business. Recruiting emphasized those with policing, accounting and comptrollership backgrounds. Employees were subtly taught that the customers were borderline criminals, intent on petty theft and drive offs.
Not surprisingly, the company’s efforts to retrain the front line staff to deliver the new customer experience were fraught. Despite a world-class training program, most of the employees were simply not able to internalize the new values, which wasn’t surprising since they had a lifetime of dealing with shoplifters. Even simple measures, such as making eye contact, smiling and engaging in friendly talk with the customer, proved to be nigh impossible for many. The company found itself saddled with a perfectly good workforce for a business it no longer wanted.
There were lots of caring voices internally that appealed to sentimentality and compassion, of the need to train, and train, and continue to train to get the right outcome. Like all employers, the company wanted to avoid the hard decision to simply replace the workers.
The problem was not in the training. The roots of the problem were in recruiting. The company found itself having to rethink its recruiting model, instituting all new recruiting campaigns, new filtering tests, and new interviewing techniques, looking for individuals who excelled in customer service. Fortunately, the high turnover rates endemic to the retail industry turned into an advantage as the company was able to replace its retail workforce in just a few years.
Our Industrial Hangover
This underscores the key problem that most industrial businesses need to address. For the past 20 years, hiring practices for front-line oil and gas (and probably lots of other heavy industries such as power utilities), have been careful to recruit individuals with the requisite hard skills (safety-conscious, instrumentation, mechanical and electrical know how, maintenance practices, asset servicing, tools use, documentation), but not the soft skills (adaptability, controlled risk taking, experimentation, trial and error, openness, continuous learning, curiousity, problem solving) for a new digital world. Many managers even view these soft skills as dangerous if in uncontrolled abundance in an industrial setting.
The education systems that turn out the next generations of workers are in part to blame. The curriculums are already demanding enough, and there’s limited scope to add yet more content to teach these skills.
But it’s these very skills that we now need in industrial settings. They are incredibly hard to teach to mature workers who are set in their ways. Worse, many industrial businesses rely on low turnover rates among their front line staff because front line workers develop deep tacit understanding of the plant under their watch.
Many years ago, I worked on a project at Suncor to stem the turnover in the oil sands operations by developing a new compensation scheme. One of the executives said that 1-2% worker turnover was manageable, but at 7%, the loss of critical industrial knowhow becomes crippling.
Now industrial businesses find themselves wrong-footed as the next wave of change comes crashing through.
Actions to Consider
We are on the horns of a dilemma — on the one hand, industrial settings have not enough of the right skills to cope with the changing nature of change (more digital), and the accelerating rate of change (new releases), and on the other hand, no ability or desire to simply replace the workers (assuming they’re available given vocational and technical training), a natural attrition rate that is both too slow and too risky to ramp up, and new skills that are exceptionally hard to teach.
What can be done? As with all multi-faceted problems, there isn’t a silver bullet.
GET IN FRONT OF THE TALENT PIPELINE.
Find those institutions that have figured out the new soft skills profile, and are embedding the new balance of skills in their curriculums. Place a priority on recruiting from these schools. Don’t assume that your local community college is the leader. It probably isn’t.
Change your recruiting methods to ensure that you are not unintentionally biasing your recruiting to exclude the talent you need.
Adapt your training for industrial leaders to see that they identify and embrace these soft skills in the interviewing and offer stage.
Get involved with the educational institutes to influence programming. Many colleges and institutes have created advisory boards to inject community input into their programs.
MANAGE THE WORKFORCE.
For managers, develop a view as to the kinds of changes you think you need to put in place. Identify peer companies or leaders who are ahead of you, as they will likely be open to site visits and tours.
Take advantage of corporate downsizing events to transition out those least likely to embrace the new skills.
Identify who your industrial laggards are. See if you can move them to roles that leverage their know how but keep them from blocking your change efforts.
Send your key influencers and opinion makers on a structured road trip to expose them to the kinds of changes that you want to deploy. If you can convince them, they will help convince the rest.
Identify anyone on your team who is likely a digital native. There’s a very good chance that on a platoon of 25, at least one of the younger employees is adept with social media, apps, and excel macros. Coupled with domain knowledge, they can be very helpful in sorting out change issues.
IMPROVE YOUR LEADERS.
For unit managers, the supervisors and team leads are your change force. Raise their digital awareness so that they are at least literate on the topic. Help them see the art of the possible for the work under their control.
And for everyone, take a hard look in the mirror and ask if you’re the problem. Are you the hedgehog, who curls up in a ball at the first sign of change, projecting your quills to try to repel the change? If you are, beware your personal brand. As Jack Welch used to say, in any change effort, you carry your wounded, but you shoot the stragglers.
Check out my book, ‘Bits, Bytes, and Barrels: The Digital Transformation of Oil and Gas’, available on Amazon and other on-line bookshops.
Take Digital Oil and Gas, the one-day on-line digital oil and gas awareness course.
email: [email protected]