In any industry, established best practices are essential for ensuring predictability and mitigating risk. But for oil and gas companies, the layers of irresolvable residual uncertainty that come with every development mean that an over-reliance on set procedures can cause more harm than good.
While standards are important, you also need to have a culture of healthy challenging – one that encourages engineers to ask questions of their peers and senior managers, and prepares teams for thinking beyond fixed mindsets.
The freedom to move in the face of uncertainty
Large companies manage risk with standards and guidelines, providing their engineers with a clearly defined system by which they can deliver predictable outcomes. But in the oil and gas industry, there are too many variables at play for the same formula to apply to every problem.
We’ve seen a case before of two developments that started around the same time and expected first oil within three years.
The first development was undertaken by a company with a strict stage gate process to ensure the design was completed and fixed before embarking on construction. But it was so strict that they didn’t have the culture of flexibility to deviate from their initial plan when the reservoir turned out to be different from their expectations. As a result, they were late on delivery and the company found it difficult, costly and time consuming to change direction.
The second development was in the hands of a company with a very different approach. They included uncertainty management and risk mitigation strategies into the design. So when their project encountered deviations from the base case plan, they were able to quickly assess the situation and change course by implementing their pre-planned risk mitigations.
The challenge of being a petroleum engineer is knowing when to tackle a project with proven methodologies, and when a fluid situation calls for in built flexibility. In order to succeed at that, they have to be able to ask questions – of the process, of their peers, and of their senior managers as well. Likewise Senior managers should encourage an attitude of continual challenge even after decisions have been made.
Keep on learning, inside your organisation and beyond
Even with a culture that welcomes questions, it can be difficult for junior engineers to feel able to challenge established procedures – especially if it means questioning someone with more senior experience.
The confidence to challenge doesn’t just come with maturity, but also with knowledge. What you’ve learned in your years of study before joining a company is only the starting point for your development as an engineer. You have to keep reading throughout your career, and build a library of expertise upon the foundations of your training. This is even more true in today’s new Net Zero environment where the industry will be doing things never done before but building on existing expertise in depth.
It’s also crucial to learn from other engineers outside of your own company cohort. Petroleum engineers come from a wide variety of backgrounds, bringing expertise from mathematics, physics and geology as well as engineering training. No two engineers will approach a project with the same perspective, and learning from the insights of others can help uncover where your own biases lie.
Attend conferences, reach out to communities of engineers and see what others are thinking. There’s tremendous value to be found in not just learning from their ways of working but also letting them challenge yours, and the examples you gather can help back up the questions you ask in your own company.
Set the culture from the top down
Senior and middle managers are critical to the success of peer-to-peer challenging. While experience and education can give junior engineers the tools to ask the right questions, their readiness to use them will live and die by the attitudes of those who set the company culture.
Firstly, managers need to adopt a culture of openness, and show it through their actions as well as their words. At the very least they should have a readiness – if not an expectation – to be challenged by anyone in the company, regardless of seniority. But they could also go further and actively seek the opinions of junior engineers, especially if the company is used to a traditional vertical hierarchy.
Secondly, management should encourage their junior engineers to seek out opportunities to learn from other engineers. Rather than being wary about them discussing your guidelines outside your company, embrace the opportunity that comes from having them broaden their understanding of the industry at large.
Constructive questions generate better outcomes
The ultimate goal of building a culture of challenge is to help engineers move beyond preconceived notions about how projects should be run. The more different perspectives are in play around the table, the richer the variety of technical solutions you have to evaluate.
Those challenges don’t only have to come from inside your company, however. They can also be steered by partners and third party experts you bring in to consult on projects. Whether they’re constructing a technical evaluation or advising on commercial and business strategy, one aspect of the role of a consultant is to ask questions from a different point of view than you have internally.
In this way, their challenges can help you create new workflows and ways of handling uncertainty that don’t rely on ingrained assumptions. Most importantly, they have no personal stake in the internal politics of the company – their interest is in being recognised for doing a good job and finding the best solution for the project.
For more information on how our consultants can support you, take a look at our management advisory services.