Succession Planning Has Essential Long-Term And Short-Term Benefits
By Vince Dawkins
The oil and gas industry is full of veteran teams leading fresh contingents of bright, young, technically astute minds. Fortunately, with activity steadily increasing across oil and gas fields in America, professionals who left the industry voluntarily or were prompted into early retirement are returning as valued consultants to help leaders bridge knowledge gaps.
With many key executives and professionals approaching retirement, passing on knowledge is vital to both individual companies’ prosperity and the United States’ role in meeting the world’s growing energy demand. Unfortunately, preserving and sharing knowledge can be a challenge given the complexity of the energy sector’s processes, standards and regulations. That complexity can make it difficult to document processes, so knowledge of back office, field automation and financial decision-making tools often ends up institutional or anecdotal in nature, meaning it gets passed down from situation to situation.
Today, much has been written about the environmental and social components of ESG, as well as the governance responsibilities of C-suite executives. But proper governance also reaches into the very core of oil and gas company ranks. For both public and private companies to achieve sustainability goals while delivering much-needed energy, effective strategies for training and succession planning will be essential.
The Barrier To Succession Planning
Oil and gas professionals need a way of handing down knowledge efficiently while recruiting, training and inspiring new workers. But despite–or perhaps because of–succession planning’s critical importance, it can be difficult to do well.
The main obstacle to getting succession planning off the ground is that prioritizing a problem with long-term consequences is challenging. When oil and gas leaders’ days already are full of fighting short-term fires, setting aside time to plan succession is hard, if not impossible, some days. Moreover, succession planning does not seem important until it’s too late. Leaders rarely see the consequences until they wake up and realize most of their team is on the brink of retirement and no one else understands their internal systems.
Succession planning works well only when energy leaders can spend time on it and prioritize it. And it can happen only when leaders’ communication is mature and effective enough to handle making those extra decisions and transmitting their reasoning to the team around them.
Leaders who make time for succession planning will discover that it offers many benefits not only for a company’s longevity, but also its present health and success. For a start, succession planning brings together different age groups and levels of experience to connect and share generational knowledge. A foundation of shared knowledge can become a core of a business, allowing new and seasoned employees and leaders to work with a strong sense of the company’s values and direction.
In short, succession planning fills important skill gaps, creates a stronger culture and ensures a company can last into the future.
Succession Planning Strategies
Industry technical societies such as the Society of Petroleum Engineers, American Association of Petroleum Geologists and Society of Exploration Geophysicists; business organizations such as the American Association of Professional Landmen and American Petroleum Institute; and, of course, the Council of Petroleum Accountants Societies are extremely beneficial for knowledge transfer.
The other components of succession planning vary by organization, but four universal strategies can help any oil and gas leader kick-start succession planning initiatives.
First, set up cross-training opportunities. Cross-training can do wonders for employees and their work, and it’s a great start for ensuring that institutional knowledge stays within a company. Essentially, cross-training involves connecting and empowering different roles. An administrator can learn from a sales representative, for example, about the value of customer contact and empathy, and tech operatives and engineers can cross-train to understand others’ challenges and processes.
Leaders can strengthen all aspects of their companies by enabling workers to teach one another. And cross-training does more than benefit the company’s future; employees will see it as a perk because they will be able to gain skills and perspective that make them more employable. At the same time, cross-training will make employees more engaged with their work, value that work and stick around longer.
Second, identify the tough conversations early. Communicating succession planning is one of the most challenging parts of making it work. Failing to disclose succession plans can lead to misunderstandings and certain team members feeling passed over or edged out.
The first step to having good communication around succession planning is identifying the conversations that are likely to cause harm. Company leaders should spend extra time and care on these conversations early on, keeping all relevant parties in the loop from the beginning of the planning process. The more aware people are of what is ahead and the more included they feel, the less personal and political trouble will arise.
Third, create a mentorship program. Because succession planning involves every level of an organization and all age groups, adopting a programmatic approach to mentorship is a good way to keep everybody on the same page as they learn. Plus, a mentorship program can help organize and deliver different pathways for training and knowledge-sharing.
To start, leaders must work out where the main skill gaps are in their companies and systematically fill those gaps with purpose-designed mentorship. It’s best to pair junior employees with senior ones and then have them work toward both personal and company goals together. Not only will this aid succession planning, but it also promotes team bonding.
Finally, plan for worst-case scenarios. As with most decisions in business, succession planning comes with risks. Oil and gas leaders will encounter, either in theory or in practice, scenarios that threaten their companies’ success or their teams’ togetherness. The only way to conquer these challenges and lower risk is to fire-drill these worst-case scenarios.
As leaders prepare for these situations, they can practice their responses and discover where their companies’ vulnerabilities lie early on. Then leaders can strengthen their succession planning around those issues to ensure future teams have the knowledge to overcome them.
For oil and gas leaders, burying their heads in the challenges of today may be tempting. But by preparing for tomorrow’s challenges through succession planning, leaders can enable future success while shoring up their teams in the present.
VINCE DAWKINS is president and chief executive officer of Enertia Software. Between 1998 and 2008, he influenced engineering, IT and enterprise resource planning solutions at various organizations. In August 2008, Dawkins joined Enertia as a senior business analyst, where he contributed to the design, development and implementation of an enterprise application for upstream oil and gas producers. Since joining the company, he has helped nurture that application’s growth and development into a resource for more than 150 upstream organizations.