BUILDING CULTURAL CAPITAL IN THE AUSTRALIAN OIL AND GAS INDUSTRY

Abstract

One of the key barriers to significant cost-savings and harnessing opportunities for growth in the Australian oil and gas industry is lack of trust, openness and misalignment between companies, among teams and among individuals.

In research undertaken for APPEA’s Australian Competitive Energy (ACE) initiative over the last three years, one of the top three barriers to growth continually cited by senior and middle level managers has been culture and behaviours. Examples include misalignment between operators and contractors, management and the workforce, joint venture partners, industry and government, and the industry and the community.

In the next five years, the Australian oil and gas industry is facing a skills shortage, technically challenging projects with less people and adaptive challenges. Adaptive challenges (Heifetz and Laurie, 2000) are ones where the:

problems and solutions are unclear;

the solution does not work through command and control;

requires a new way of thinking and acting; and

requires the entire organisation to be engaged.Examples of adaptive challenges for our industry are:

finding new gas markets;

exploration in sensitive areas;

high rig mobilisation costs for a small market; and

retaining a skilled workforce.These challenges require companies to find new ways of:

Attracting and keeping talented people;

Increasing profits and shareholder value; and

Increasing creativity and productivity.

Adaptive challenges can be achieved by building cultural capital.

This paper outlines:

Research and feedback from Australian Operations Managers, Supply Managers, Project Managers and Drilling Managers about the need for improving the culture and behaviours;

The business case for why building a high performance culture is considered the competitive advantage of the 21st century;

How to measure culture including the diagnostic tool used for the CEO workshop;

Results from the diagnostic of the CEO group and implications;and

How to move forward individually, as companies and as an industry.

The purpose of this paper is to foster debate and discussion about developing a high performing culture in the Australian oil and gas industry. We intuitively know that valuing our people makes good business sense. To transform the industry’s culture, it is not the organisations that transform, but the people. Shifting the culture requires leadership, courage and commitment from the industry’s senior management.