The New Normal
Hire for fresh thinking and tech expertise to solve issues, innovate and grow.
By Kevin Schroeder
Energy companies that survived the downturn and are now operating in the “new normal” have the opportunity not only to recover, but to renew. They can reinvigorate their business, positioning it for new growth and profitability in a lower-price environment. And the timing couldn’t be more important: Success depends on being future-focused and technology-powered.
Companies that are rebuilding their workforce post-downturn have the opportunity to draw upon a generation with analytical and tech skills and fresh ideas.
From Challenges to Advantages
The period of financial doldrums took its toll. Updating legacy tech systems, hiring and conducting activity beyond the status quo were put on hold. Experimentation had to be set aside, and skill gaps widened. Companies fell behind in strength and growth. They now operate in a time where decisions are made faster than ever, finding this problematic when information isn’t at hand and the tried-and-true has become tired and ineffective. The pace of business has radically accelerated, and the current environment does not have patience for companies that coast at a traditional speed and make conventional decisions.
In the realm of technology, energy leaders are slowed in decision-making when their workforce isn’t qualified to collect and interpret data and put it to meaningful use. Robust measuring, monitoring and data analysis are required in business today. In the 2017 Grant Thornton LLP-Hart Energy survey of C-suite and senior executives, 61 percent of respondents said their biggest tech challenge is access to the right information. Primary obstacles, said 42 percent, are dated tech and lack of systems integration and compatibility.
One area appears to have escaped notice: Rigorous cybersecurity is a priority for only 6 percent of respondents. This is likely because the industry hasn’t yet been a major target – and because some do not recognize the threats. But attacks will come, probably beginning with field operations. A company will be vulnerable if it has an antiquated system and unprepared employees.
Adoption of enabling technology is critical throughout the business, but nowhere more than in the field. Most of the oil industry is technologically outfitted for exploration and development. But other needs, such as real-time data on well performance, don’t get this attention. In our survey, respondents identified play/basin analytics as a big miss in effectively running the business. Failing to technologically monitor equipment weaknesses is to blame for significant lost time.
After checking out a well, field managers must go gather tools and equipment and then return. Throughout the enterprise, efficiency is either gained or lost, depending on the availability of tech. There is a direct connection from efficiency/inefficiency to profit/cost in productivity, such as in the correlation between improved drilling efficiencies and well performance and higher margins.
Playing tech catch-up is just part of a winning strategy; the name of the game is innovation. Companies innovating in every possible area of their business will be the ones reaching gold. They must also pursue different strategic business decisions and embrace culture change.
For business to move forward in today’s environment, attracting and retaining new talent is critical. In recouping employee numbers lost in the downturn, companies will need to turn to a younger generation. That turnover has started. The industry as a whole is undergoing a major “crew change” of baby boomer retirement. The transfer of knowledge from experienced workers to new hires is useful in many ways, but real value lies in a reset.
A combination of tech expertise and fresh thinking revitalizes companies that were forced to hunker down in the financial storm. They are investing in tech and talent to cut inefficiency and related costs and rebuild reserves. The payoff of attracting and retaining the right people is thriving in this lower-for-longer commodity price environment.
The natural choice in the talent pool is the millennial generation. Millennials make up about 34 percent of the U.S workforce, according to Pew Research Center, and the percentage will grow. Their tech expertise is undisputed, their youth lends itself to enthusiasm and curiosity, and they constantly hone their collaboration skills through their desire to connect with others. Candidate selection should be based on both hard and soft skills – the ability and the vision to apply technology to challenges.
A reoriented staff won’t be IT specialists exclusively. Instead, every new employee will be respectful of the power of technology to get his or her job done, familiar with at least base-level functions and eager to learn more.
Converting sought-after candidates to employees requires aggressive recruitment activities on three fronts. These involve demonstrating the career opportunities in an exciting and expanding industry, positive changes in key areas and a company culture that mirrors employee values:
- Demonstrating opportunities. Candidates must be assured of an engaging and profitable career in energy and an attractive work setting. Besides competitive advancement, training, salary, benefits and flexible scheduling, a company is wise to upgrade facilities to include quality amenities such as fitness and socializing centers, dining and daycare. A tech-building plan is a must.
- Matching culture to millennial values. If a company’s value proposition doesn’t already contain elements important to millennials – learning, team building, openness to innovation, fair compensation, work-life balance and a service mission – it should seriously consider adopting them. The company can then boldly prove its adherence to a culture worthy of appreciation and loyalty.
- Showing positive change. The energy sector has suffered from unfavorable perceptions. While an individual company can’t engineer a reversal, it can speak to the social interests of millennial workers by identifying activities that address health, safety and environmental issues and commitment to reliably meeting vital energy needs.
A company with a tech-savvy and idea-generating staff in place is well positioned and empowered to surge in operational efficiency, growth and competitiveness.
Kevin Schroeder is the energy industry managing partner for Grant Thornton LLP.