Top priorities in the E&R boardroom

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Top priorities in the E&R boardroom

Global Human Capital Trends 2016 in Energy & Resources

For the fourth time in a row, Deloitte has published its Global Human Capital Trends report. Leadership and culture remain two of the most important trends, but organizational design is now clearly the number 1 topic for human resources and business leaders worldwide, both inside and outside Energy & Resources.

Marco Hoogerwaard & Paola Overmars - 20 october 2016

Organizational design: most critical priority

After three years of struggling to drive employee engagement and retention, improve leadership, and build a meaningful culture, executives now consider redesigning the organization itself as the most critical priority. This raises the question of what is going on. Why has organizational design become so important, almost overnight?


Agility and flexibility

First of all, as the world around us is changing faster and faster, new organizations are challenging the current business model of oil and gas companies. In order to survive and thrive, businesses need a more agile way of working, with decentralized multidisciplinary teams that are able to react immediately to change. Second, the oil price crisis requires organizations to reduce their costs and focus on a more flexible workforce than in the past.


Struggling with the implementation

Most oil and gas companies are aware of the urgency of organizational design and have incorporated this topic in their strategy. However, they are struggling with the implementation. Naturally, their people are not used to this new and agile way of working, so how to accomplish a change in mindset in all of them, which will help them work in efficient, agile, and multidisciplinary teams? Also, many companies still develop their own customized products and services. Before the oil price crisis, their engineers could customize everything, as costs were not considered that important. Now that these costs must be reduced, products and services must be standardized. This requires a new mindset as well.


Creating the right mindset

So how to create such a mindset? First of all, it is important to identify and remove hidden costs in the organizational structure. Then agility is introduced by way of programs for an agile way of working. This usually also requires a new approach to talent strategy – what does future talent look like, what capabilities are needed and how to address this topic, not just in the short run, but also and specifically in the long run, which can be quite a challenge for oil and gas companies. Talent management really is an important tool for long term success.


Culture

Culture is another important aspect of creating the right mindset. In order to change and support organizational culture, it is essential to identify cultural values and translate these into the desired behavior of the workforce and future talent. This translation helps to embed the cultural values and enable the company culture to change over the years. Deloitte can help throughout the entire process, from identifying values, defining the right vision and strategy and developing a change program, to embedding and monitoring change in the organization.


Leadership programs

Leadership, which is the second most important topic for the E&R boardroom, can improve largely from leadership programs. Sometimes these programs are aimed at individual leaders, coaching them with their strategy and vision. But leadership programs can also become a journey for e.g. the top 50 leadership within an organization, ranging from executive level to leaders in separate disciplines. Vision and values are enrolled throughout the organization by the ‘followers’, who are as important as their leaders in being a role model and showing others how to embed the company values in day-to-day business.


From silos to teamwork

For instance, we recently helped an organization where the leadership was operating in silos. The oil price crisis more or less forced them to work more closely together and find out how they could empower each other and act as a team. We enabled them to become a team through leadership interventions. These interventions encouraged them to set a good example as leaders and role models, which in turn inspired their employees to work more closely together.


Human Capital Panel for Offshore Industry

On 26th October, Deloitte organizes the Human Capital Panel for the Offshore Industry, which is free of charge and without the need to enter. Please feel free to join us in our discussions on organizational design, leadership and culture, and how these topics can improve oil and gas companies. There is not one particular road to success, so we will share experiences – whether they were successful or not. We are looking forward to welcoming you and inspiring you with many case stories.

Global Human Capital trends 2016 E&R edition
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