Petroleum Industry 2020: Advancing the Spirit of Collaboration

Abstract

The SPE Industry Summit on Talent and Technology will be held 28-29 June of this year. The summit is championed by BP, Total, Shell, Hydro, Repsol, Baker Hughes, Schlumberger, and Weatherford. A total of 100 senior industry executives will be invited to attend this summit. The program committee met in Paris on 16 February and decided to focus on talent and technology, with a theme of "advancing industry collaboration to maintain growth and prosperity." There are excellent examples of industry collaboration, such as professional societies, joint industry projects (JIPs) with academia, data trading, and spinout joint ventures. However, those fall short of meeting the gigantic challenges facing our industry. Why is our aspiration to collaborate extremely high but our real implementation of collaboration is low? Does the industry need to go through a fundamental change to reinvent itself and spearhead a more serious collaboration effort? Before I address industry-wide collaboration, let me first talk about internal collaboration across silos within the same company. Simply, if a company cannot be successful with its internal collaboration, external collaboration is only wishful thinking. Internal Collaboration The best organization in nature is the human body, where the brain instantly assimilates knowledge and makes all decisions. The process takes nanoseconds and actions follow immediately. There are definitely no silos or turfs among all the "business units" of the human body (hands, legs, heart, etc.). There is no bureaucracy and no hierarchy between the CEO (the brain) and the frontline employees (the senses). The transparency, the oneness, and the integrity of this organization are beyond any stretch of imagination. With all our super computing power and the intelligence of organizational behavior, can we assemble a business organization that behaves more like the human body? The objective of collaboration is to capitalize on the multiplying power of synergy among different business units and organizations (the whole is much more valuable than the sum of the parts). This synergy results when senior management infuses and encourages internal collaboration throughout the organization. Such collaboration adds value at the organization level to the value already generated at the business units. Kaplan and Norton eloquently illustrated this concept: Customer added value (at the business units)+Company added value (at the organization levels)=Total value creation. At the business units, the added value is the product or the service delivered to the customer. At the organization level, the company added value is in the form of brand publicity, shared service centers, and financial and human resources that support all business units. In general, if the corporation's headquarters does not add value, then it has to be dissolved to minimize cost and bureaucracy. In our industry, asset teams are the business units responsible for developing, producing, and managing assets. Company added values can be transporting, processing, refining, marketing, accounting, computing, human resources, etc.