Human resources

Addressing the Leadership Gap in the Energy Industry

Business, management, and leadership skills, also known as soft skills or nontechnical skills, can and should be developed early in one’s career, preferably before receiving a promotion to a leadership position. These case studies illustrate the advantages of using business simulations and dedicated learning programs to practice both nontechnical and technical skills in a supportive environment.

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We recently presented our paper “A Competency-Based Approach to Addressing the Leadership Gap in the Oil and Gas Industry” at the 2021 SPE Annual Technical Conference and Exhibition in Dubai in September. It was presented during the session, “Changing Oil Industry Market Map, Innovative Solutions with Intensive Study.” The paper included two case studies of career development initiatives that provide examples of resolving the leadership chasm that threatens the energy industry (SPE 206302). Business, management, and leadership skills, also known as soft skills or nontechnical skills, can and should be developed early in one’s career, preferably before receiving a promotion to a leadership position. These case studies illustrate the advantages of using business simulations and dedicated learning programs to practice both nontechnical and technical skills in a supportive environment.

From the launch of the SPE Soft Skills Council in 2011, renamed the SPE Business Management Leadership Committee in 2017, to the continued emphasis on developing both nontechnical and technical skills in early career professionals, SPE continues to pursue new insights into leadership development. These initiatives are detailed in the paper’s literature review in which several authors have contributed to the SPE literature on best practices in developing leaders.

Employers providing development opportunities to future leaders in their organizations are finding their workforce better prepared for the double black swan events of the oil price crash and the pandemic lockdowns that resulted in industrywide retirements and layoffs. By providing leadership experiences directly related to the future roles of their emerging talent pool, employers are better positioned to source candidates for leadership openings (IPTC 20078). Employers have learned that by launching a human-capital development plan, the priorities for the development of future leaders in the talent pool are identified, ensuring their development is executed consistently year-over-year.

Career development initiatives require precisely designed programs to maximize the impact. The Elements of Adult Learning Programs, provided by Dr. David Donohue, are listed below and depicted in Fig. 1.

  • Learning objectives integrated with competency development. Participants seek to build competency to perform their jobs and advance careers. Program learning objectives should align with job competency needs as defined by competency models.
  • Pre-course learning. Pre-course learning, including e-learning and case study assignments, helps bring all participants to a common knowledge base before formal sessions begin.
  • Experienced in-house instructors and mentors. Experienced instructors and mentors must have deep industry experience, strong communication skills, the ability to stimulate discussion, and have empathy for learners.
  • Crisp and meaningful lecture content. Lectures must be crisp, meaningful, current, well-illustrated, filled with practical examples and multimedia content.
  • Action learning: Serious business simulation games, case studies, board games, and practical assignments. Participants working in teams should be engaged in challenging activities that enhance learning for up to half of the time during the program. These activities include simulation games, realistic project assignments, discussion of case studies, and team-based, blended action e-learning assignments.
  • Assessments and feedback. Assessments encourage active participation in the learning process, enhance internalization, and provide feedback to sponsors to improve the program.
Elements of adult learning programs.
Fig. 1—Elements of adult learning programs. Source: SPE 206302.

The SPE Competency Management Tool (CMT) is a free online SPE member benefit that allows you to assess your current professional capabilities. While it is focused on technical skills, it also includes soft skills such as leadership, communication, problem solving, negotiating, and teamwork. Competency-based development consists of designing the competency assessment in alignment with the skills needed at the levels of awareness, basic application, skilled application, or mastery. Fig. 2 displays the CMT leadership competency.

SPE Competency Management Tool
Fig. 2—SPE Competency Management Tool (CMT). Source: SPE 206302.

Competency-based development utilizes a process to design the competency assessment in alignment with the skills needed at the level required for each job on the career ladder. This cycle of competency assessment, followed by learning and development, is repeated throughout one’s career and can be managed programmatically for a skill pool within a company. A schematic for this iterative process to be used to design learning and development initiatives is depicted in Fig. 3.

Learning and development design process.
Fig. 3—Learning and development design process. Source: SPE 206302.

In the first case study, we conducted surveys of past participants of the Daniel J. Tearpock Geoscience Certification Program (GCP). While the focus of GCP is on developing technical skills, several past participants are now in leadership roles in their organizations. These present-day leaders reported that the GCP was a pivotal event in their career development where they learned vitally important business, management, and leadership skills. We designed the survey for the paper using feedback collected from post-GCP evaluation forms including input from the Subsurface Consultants & Associates (SCA) instructors and mentors who have conducted the programs for more than a decade. The survey provided a unique opportunity to lead a longitudinal study (2008–2020) of the business, management, and leadership skills developed by participating in the GCP.

The GCP was designed to allow early-career geoscientists and engineers to learn by “applying geology, geophysics, and engineering fundamentals in order to accelerate their contributions to exploration or development teams working in the upstream oil and gas industry.” The GCP starts with 6 weeks of classroom training, including exercises. That learning experience is immediately followed by a 6-week business simulation designed to replicate real-world mapping and interpretation experience in exploration and development. Participants learn fundamental interpretation, engineering, and mapping skills and then put those skills to the test using seismic data, well logs, and production information from an actual field development. This business game allows the early-career technical professionals to hone their technical skills and develop soft skills concurrently. Upon completion of this “boot camp,” the participants deliver a presentation describing their interpretation and mapping of the field, resulting in a recommendation for exploration, exploitation, and development of upside potential. The participants then demonstrate their technical and nontechnical skills by defending their results in a technical presentation to a team of seasoned professionals, managers, and executives.

The survey results show that the GCP participants derived technical and nontechnical skills from their “learning by doing” experience. It was remarkable how those who reflected on their GCP experience from the advantage of several years’ perspective saw how it had shaped their professional development regarding their soft and technical skills. SPE 206302 provides several charts of their quantitative feedback as well as samples of the freeform comments that were collected.

In the second case study presented in the paper, IHRDC’s Emerging Leaders Program (ELP) conducted at Level One, is based on six critical foundational leadership competencies:

  • What is leadership? History, styles, philosophies, and examples
  • Communicating collaboratively
  • Emotional intelligence
  • Personal excellence/self-awareness
  • Introduction to critical thinking
  • Leading and managing change

IHRDC’s ELP design involved competencies that were selected by experienced leadership instructors addressing marketplace interest. They consulted extensive research and incorporated articles by leading specialists in leadership issues into the program. Each topic is covered via lecture and discussion, followed by an “office“ hour session to review the previous week’s lecture and evoke discussion among participants. Emails to the instructor/mentor were invited during the program to encourage participants to keep the subject matter top of mind. Additional e-learning modules related to the lecture topics were provided to enhance the learning experience. During the final week of the IHRDC’s ELP, the teams created a presentation with an overall theme of their own choice and presented it in the light of the six competencies. The teams shared their presentations with the rest of their classmates.

IHRDC conducted pre- and post-assessments for four ELPs completed virtually in 2020 and 2021. Our paper includes several charts of their quantitative pre-and post-ELP assessments as samples of the freeform comments that were collected. The survey results show that the program and the content provided participants with the desired results. With 1.00 equaling one improvement level on a scale of 1 to 5, leadership (2.00) and creative thinking (2.00) jumped two complete improvement levels, followed closely by emotional intelligence (1.92) and creative thinking (1.98), then change management (1.76) and communication (1.44). There was a substantial increase in each area in their emerging leadership knowledge. Then the participants were able to retain and implement the learning into their work and personal activities. In several instances, the participants’ comments show that leadership learning has been applied in the workplace to benefit and improve their job functions.

These two case studies demonstrate that competency-based leadership development with business simulations has advantages over simply expecting early-career engineers and geologists to learn nontechnical skills by observing their organization’s leaders or by trial and error. Rather than relying on serendipity to provide opportunities to enhance one’s soft skills, it is value-added to use a systematic approach to concurrently develop business, management, and leadership skills for early-career professionals.

Leadership skills selected for a learning and development initiative may depend on the company type (operator, service provider, consultant) and company size. It is essential to consider corporate culture, such as the company’s mission, vision, and values, as well as the key job responsibilities of the leadership roles for which candidates are being developed.

Benchmarking leadership skills with external world-class industry sources such as SPE ensures that a company’s leadership programs continue to evolve with emerging industry trends such as digital transformation and the energy transition. Employers who deliberately develop leaders with competency-based initiatives will reap employee engagement and retention benefits—using competency-based initiatives as performance improvement plans can level out gaps in pre-employment educational experience. Competency-based learning and development programs can also be used to identify and measure future leaders based on their behaviors during the business simulation.

SPE 206302 A Competency-Based Approach to Addressing the Leadership Gap in the Oil and Gas Industry by S. Howes, SCA, and R. Taylor, IHRDC.

IPTC 20078 Building Technical, Commercial, and Soft Skills in Evolving Organizations by S. Howes, SCA, and R. Taylor, IHRDC.

C. Susan Howes, PE, PHR, SPE, is vice president engineering at Subsurface Consultants & Associates. A petroleum engineering graduate of the University of Texas (UT), Howes started her career at Anadarko, and worked for Chevron as reservoir management consultant and as manager of the Horizons Program. Howes serves on the UT PGE External Advisory Committee, Colorado School of Mines PE Program Advisory Board, and Girl Scouts–SJC Board of Directors. For SPE, Howes chairs the US Advisory Council, served as regional director for SPE Gulf Coast North America, received the SPE DeGolyer Distinguished Service Medal, is an Honorary Member, and was a Distinguished Lecturer for 2019–2020. Howes was named 2020 Woman of Excellence by Houston Professional Women.

Robert W. Taylor is vice president of global business development for IHRDC and an instructor in its energy management programs. Since joining IHRDC in 1999, he has coordinated sales and business opportunities globally, providing learning and competency development advice and ensuring quality products and services for all IHRDC clients. Previously, Taylor held positions of increasing responsibility in sales and management for Otis Engineering and Halliburton Energy Services over a 24-year career. He holds an MS in adult and organizational learning from Suffolk University and a BS in mechanical engineering from the University of Kentucky. Since 2017, Taylor has taken a keen interest in developing leadership skills, especially with emerging leaders by developing programs and using a basis of competency requirements to form and deliver the training.