Moving into deeper waters and operating in remote locations are only some of the numerous operational challenges the oil and gas industry are facing while riding the wave of expansion. These challenges require the industry to realign itself in its pursuit of success, becoming more innovative and pushing the envelope on environmental awareness, ethics and legal issues, beyond the obvious technological and operational challenges.
The ability of organizations to successfully maneuver in attaining their ultimate goals is reliant upon its most valuable assets: its people. To engage human capital nowadays, it takes more than just simple strategic planning. One needs to create a conducive working environment that engages members throughout the organization. Members need to feel ownership of the process and participate in the development of SMART (Specific, Measurable, Achievable, Realistic and Timely) objectives along the way.
In today’s economic environment, looking ahead through financial lenses alone may be eclipsed by the shade of a bigger picture. Zooming out reveals additional dimensions that need to be factored into the strategic equation when charting the course for the future, and these dimensions are the subject of this article.
In pursuing a holistic approach to quality culture, and having studied this matter across other industries, we’ve identified twelve core areas that represent the key areas of focus for a thriving business in the Knowledge Era. Efforts should be undertaken to measure and track progress in these areas in order to meet the challenges of today’s business environment. This month, we will review the first six core areas and complete the remainder in next month’s issue.
Core Area # 1 – Stakeholder Loyalty – Focuses on both internal (employees and shareholders) and external (customers, supply chain, professional and social communities) stakeholders. It provides the roadmap for the cultivation and sustainability of authentic, loyal stakeholders through a systematic approach. The emphasis here is “Loyalty” and not just “Satisfaction”.
Core Area # 2: Financial Health and Performance – Focuses on both the long term financial direction of the company as well as spot-checking key indicators. It defines how this core area supports the corporate strategic objectives, the approach to a financially healthy organization, and identifies the key financial metrics that will be used to measure corporate performance.
Core Area # 3: Operation and Business Processes – Focuses on the operation and the business processes of the corporation. It provides an outline of the value stream, details the organization’s performance, and highlights areas that can be improved, including but not limited to, project management, workflow, communication, and quality management. This is the area that provides a clear link between the organization’s strategic objectives and how these objectives are translated into a tactical plan. It also helps a company align its resources to achieve these objectives and links every member to the overall strategic plan.
Core Area # 4: Human Capital and Corporate Wellness – Focuses on the team members (a.k.a. employees). It examines how the organization’s work system and the members’ learning and motivation enables all members to develop and reach their full potential in alignment with the organization’s strategic objectives and action plan. It provides a roadmap for the development of the right social and professional skills to meet future needs, addresses issues such as training and development and job descriptions, and prepares the groundwork for the cultivation of a supportive and sustainable culture and climate.
The industry has seen a major increase in focus on workforce development in the last decade. Whether it is a shipboard crew and pilots, who can benefit from initiative offered by the Center for Maritime Education (CME), or plans such as the National Shipbuilding Research Program – Advanced Shipbuilding Enterprise (NSRP-ASE) to advance the working knowledge of Lean thinking in shipyards, the trend is very apparent. Frameworks are available to enhance current knowledge through a variety of delivery modes, from hands-on experience to online courses, tailored to the individual level of competency.
Core Area # 5: Information Management and Knowledge Leadership -This category addresses the infrastructure of information management, including, but not limited to, the software and hardware required to identify, collect, store and share information and knowledge. It also provides details on how to cultivate a knowledge leadership environment, where knowledge is identified, gathered, analyzed, recorded, filed, managed, and disseminated among the members when most needed.
During a recent NSRP study on knowledge management systems, it was reportedly found that about 30% of an engineer’s time is spent on recreating information or knowledge which already resides within the company. Spectria, a technology consulting firm, has developed a prototype of a new knowledge management-based information portal called SmartShips, for Modern Maritime, Inc., a professional services company for the marine industry. The introduction of this new knowledge management system provides further evidence of the importance of this element in a modern maritime business environment. It would reportedly be the first online regulatory compliance and quality management system in the industry.
Core Area # 6: Organization’s Identity: Structure, Culture, and Social Ergonomics – Focuses on identity, which is the collective “personality” of the organization as derived from the strategic objectives. It provides a plan on how to develop, build and maintain the organization’s structure. In an age of mergers and acquisitions, for example OSG and Maritrans, or MAN and ALSTOM’s Diesel engines business, corporate culture plays a major role in accelerating the M&A process with higher possibilities of success. It provides an overview of the ethical landscape of the organization, and the foundation for the cultivation of an organizational culture. It sets objectives for a desired organizational climate that is conducive to performance excellence and to personal and organizational growth. It is also instrumental in providing guidelines for the cultivation of leaders throughout the organization.