I know that you are busy, but I wanted to take a moment of your packed schedule to ask a straightforward but very significant question, Are You Ready? Ready for what you are probably asking. You have many issues to deal with, and recently, you have made several promises and commitments to various important stakeholders. Let's start with a few of the big ones:
- Greater Capital Discipline. Just because commodity prices have risen, have you committed to not going on another drilling binge? You have an opportunity to future-proof your operations with the correct technology in place. Do you know where your money is going besides your drilling budget? Where is it being spent? Do you know where it's being spent daily
- Better Environmental Performance speaking to ESG investor community, we will reduce flaring, aim for a Net Carbon scope 1 & 2 operations, follow the OGCI 0.2% methane emissions target, and invest in technology to help capture all data and information. GHG, Water, CCUS.
- Better Decisions and New Insights use advanced analytics (AI/ML) and proven digital technologies to achieve greater production and productivity (more for less).
- Cloud technology, are we leveraging all of the latest cloud capabilities, on-prem / hybrid, AWS or Microsoft, tools available to our company that maximize returns?
- Are all of my company personnel as productive as possible, making the right decisions with the most current data, information, and technology available?
This is a pretty extensive list of corporate-level objectives, so we can better define that original question, are you ready to deliver on these commitments? The promises are out there in your last shareholder meeting, your previous investor call, the previous interview with the financial media, and your previous employee town hall meeting. But how confident are you that you will achieve these goals? You have tied the executive bonus program to these targets, but are you ready?
Some authors have claimed that Data is the New Oil. Data seems to be the new enterprise asset, but are you treating it that way? Have you broken down the functional and regional data silos and created data transparency inside your company? It is not the company with the most data or the newest technology, but the company that makes the better decisions quicker who will win. Are you that company? Are you turning your digitization projects into actionable performance improvements?
You have read articles by several management consultants that talk about the dangers of Dark Data. Why is almost 95% of your data not accessible to analysts across your company or with your supply chain partners that need it? Can you bring together your Big Data (not just volumes but variety and velocity) to make better decisions? Do you have an enterprise data platform (not a data lake)? Is that the data that is most trusted in your firm? You made those promises to the market, so how can you deliver?
Collaboration is essential in this just-in-time world, but often collaboration can be an unnatural act if your experts can't access the data needed to develop a standard, trusted view of your operations. I know this has been your company's goal for several years, but can your data foundation and applications suite bring together operations, engineering, and finance for a holistic asset lifecycle view of your operations? Daily? Or not at all? Is your answer "build it ourselves," which is difficult, expensive, and not core to your organization? Are you still arguing about production figures from spreadsheet analysis when much more powerful machine learning tools are available? Are you set up for success? Will your existing data, communications, application suites, and current workforce digital literacy levels get you where you want to take your company? Do you even know?
When you made these commitments at your last executive retreat, all your top managers nodded in agreement, and no one raised their hands with any questions, but are you (as the CEO) asking the right questions from your staff and suppliers to get to the answers, are you ready to execute on these corporate goals? Here are a few questions for you to think about:
- How are you sharing your strategic vision with your staff? Can a few well-drafted PowerPoint slides be sufficient to get the message across up and down your organization? I assume you review your monthly management dashboard every meeting but are you sure you measure the correct performance indicators? Is the data real-time or months in arrears?
- Are you applauding innovation, thinking outside the box, experimenting with new ideas, or conformity? Are you cutting operating costs, network security, and uptime, adopting next-generation versions of established software from long-standing vendors, or contemplating transformative ideas? How do you incentivize risk-taking? How do you believe your workers see risk-taking? No one has ever been fired for buying from the market leader or name brand consultants (Accenture, BCG, Deloitte), even if their solutions are inferior to those of emerging technology companies.
- Do you have people that wish to protect a domain and have created internal systems that are highly expensive to build and maintain? Why are you squandering important resources on a homegrown, high-maintenance solution?
- Are you providing the essential guidance and support to the change management effort that will be required in your organization? Have you considered that some of your employees may be afraid that technology will replace them when, in reality, it will help them to boost productivity and make better decisions, but they are afraid to embrace "change"? Are you directing and incentivizing them to succeed in adjusting to a new paradigm?
- Is accounting for expenses more essential than trying to improve the main areas of spending and revenue? Is your COO putting in the same amount of effort to maximize output and profitability as they are drilling the wells? You spend a significant portion of your budget drilling wells, but are you considering the long-term demands of maximizing production? Is your asset portfolio appropriate for achieving your accelerated objectives?
Your CFO appears to be doing an excellent job tracking expenses and revenues, but can the same be valid for operations? Have you considered creating or deploying an operational platform similar to what you accomplished for accounting (SAP, Oracle JDE.) Your staff claims that integrating all of the information and data from all functional components is highly complex, if not impossible. Is this true? Or is your workforce hesitant to change the way they operate daily? Are you prepared to answer the question, "Are you ready?"
