Guest Column | December 13, 2016

Oil And Water: Lessons For The Water Industry From Oil And Gas

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By Elizabeth Dorey

As water scarcity continues to be a major, ongoing challenge in the U.S., public and private sector leaders are seeking new insights on sustainable solutions. In this work, they are grappling with challenges on a scale that oil and gas organizations have been confronting for decades now. It’s understandable that stakeholders can get caught up in the tactical side of dealing with water crises — but there is also guidance to be gained by taking a high-level view.

My colleagues and I often work with clients in both the energy and water sectors, and we see lessons learned from major oil and gas projects that are clearly applicable to the water industry. That’s hardly surprising when you consider the challenges the two industries share: a tough regulatory environment, the frequent need to partner effectively with other stakeholders, the high-profile nature of such projects and possible public scrutiny, tight budgets and deadlines, and the unpredictable nature of natural resources.

Indeed, we see increasing awareness of the important water-energy nexus. The U.S. Department of Energy has outlined six strategic pillars to address that intersection of interests and shared challenges, emphasizing the need for collaboration between companies within the water and energy industries, as well as across industries. And while it is promising to see increased levels of attention to water issues in the U.S. and around the world, there remains a huge gap when it comes to translating awareness into action and sustainable results.

Whether you’re drilling for oil or addressing aging water infrastructure, you’re working in a high-stakes landscape. A clear thread through the types of challenges I mentioned above is a deep need for strong vision and leadership. The people running the show must understand the big picture if they’re going to get the nitty-gritty right. Here are four steps leaders can take as they combat water scarcity. This guidance draws upon lessons learned from ventures and partnerships my colleagues and I have seen excel in the oil and gas sector.

1. Launch the initiative successfully.

The water industry is rife with critical projects and initiatives, dealing with everything from water recycling to pipeline upgrades, and dire realities arising from drought and erosion. Whatever your objective, I can’t overstate the importance of the launch phase of a project. It’s about far more than getting people together and stating a mission.

A key aspect of this work is getting people’s individual motivations, drivers, and agendas on the table. Then you have the unique opportunity to step back — fully informed — to create a project mentality based on what’s truly fundamental to the project as an entity. If people can constructively air their differences, then they are freed up to participate in the creation of something that reaches beyond their individual interests and agendas. Once that happens, they can come together to generate a collective set of commitments, and can be on their way to making extraordinary things happen.

If this kind of cohesion is missing at the start, it will most likely result in problems later. For example, a colleague and I were recently asked to help intervene in a multi-billion-dollar project that was in trouble. It involved building an energy facility along a waterway on a very ambitious timeline, with close regulatory oversight. The joint venture companies had agreed to a performance-based contract, so failure to deliver on time and on budget could expose both to millions of dollars in liabilities. What soon became apparent to us was that people were working to avoid harsh consequences: No one was “playing for the win.” Only after an intervention — where previously hidden issues and concerns were brought to the surface … did a newly-unified commitment to turning around the project get generated.  As a result, the effort finally got on track.

2. Agree to a roadmap about how to navigate through inevitable problems and difficulties.

Once you have unqualified alignment to a clear set of commitments, another key aspect of the work is establishing a roadmap with ground rules for how people will handle issues and setbacks. Too often, people assume that because they have a contract, they have all contingencies covered. They tend to assume that if difficulties arise, they’ll talk it out. The contract simply doesn’t carry the day. And people definitely don’t always talk things out.

There’s a certain due diligence required here. When my colleagues and I work with struggling projects, we often find that the work has given way to very human tendencies such as justifying deadlines that slip, or ignoring quality issues that arise. Rather than digging in to determine what changes might be needed so that small problems don’t grow into larger ones, people tend to rely on habitual practices such as “flexing” the schedule — often repeatedly — and plowing forward, hoping to make up for delays later on.

But there’s a much better way: You can plan for the unplanned and safeguard your project. For example, you can agree that when a deadline slips or a quality problem surfaces — even just a little — you collectively pause and figure out why. If issues arise and accumulate and there is no agreed method to address them, that’s when projects fall into jeopardy.

My colleagues were part of an historic endeavor to develop a deepwater gas field — something the world’s oil and gas giants had failed to do for decades. As several competitors partnered to finally deliver first oil, they sought guidance on how to proactively agree on their approach to handling obstacles and difficulties as they arose. Despite financial pressures and a myriad of logistical challenges, the partners delivered first oil under budget and ahead of schedule. By negotiating beyond the contract, all parties benefitted, and delivered beyond expectations.

3. Identify short-term wins.

Achieving early-stage wins which demonstrate that it is possible to realize larger aspirational goals can play a tremendous role in galvanizing people’s actions. And doing so can go a long way towards helping an organization or joint venture hit its stride.  Once people realize a certain level of performance is in fact achievable, it can happen again and again.

So: don’t be afraid to challenge your people right from the start, setting targets for deliverables and deadlines that they may at first perceive to be out of reach. Reaching highly ambitious short-term targets requires ways of working that can be carried forward in an extremely useful way — including very focused daily actions, overcoming obstacles quickly, and measuring progress constantly. Once you inspire people to show that the unachievable target can be achieved, it opens the gate to even greater accomplishments. We see this often in sectors ranging from sports to technology and space exploration: One individual, organization, or nation does something that’s never been done before, then soon thereafter the barrier is broken repeatedly, and the bar for extraordinary is reset even higher.

When a leader has the courage to put a stake in the ground and convey deep conviction that that extraordinary success is possible, it inspires others to follow that lead and alter their behaviors accordingly. When the energy facility venture mentioned earlier submitted the complex engineering designs needed for construction approval, it was a huge short-term win that almost no one involved originally thought was achievable.  But leadership refused to submit to perceived limitations. They leveraged that first big win and pivoted to a round-the-clock effort that would enable them to successfully deliver the facility on time.

4. Manage alignment constantly.

When you’re managing a project, it’s vitally important to continually manage alignment in all directions. That means up and down as well as across teams and sectors.

When it comes to vertical alignment from leadership to the rank and file, it’s about everyone having a clear line of sight to the prize — the ultimate target, or set of targets — that people have committed to achieving.  And this isn’t a one-time event: Alignment ought to be continually emphasized and assessed. You can never really reach a point when you have “done enough” to create and sustain alignment. It would be almost impossible to over-communicate the “big picture” vision of what everyone is there to do, and why.

To maintain communication and alignment across the project, it’s important to not only consistently convey the sense of mission, but also the latest information of interest to all concerned.  When under pressure to deliver, even highly motivated people can (with the best of intentions) fall prey to old habits of being siloed in their work.  If people fail to offer updates — or conversely, fail to ask questions but instead make assumptions — they can revert back to legacy behaviors that impede productivity and stand in the way of high performance.

A New Zealand oil and gas business that had been sold off by its parent company had to emerge as a force in its own right, but its people were stuck in a slow-moving legacy culture, with no history of high performance. The CEO was able to remake the organization from the ground up, in part by getting all hands on deck. He literally brought all key leaders and players to the table, then demanded that they work with him to constantly communicate — with their teams as well as with each other — on progress, on questions, on issues to be resolved, and on successes as they were delivered. In less than two years, the company emerged as the preferred consumer energy company in the country with an award-winning brand.

When you attain this kind of sustainable success, it feels like everyone is pulling in the same direction, and like there is no obstacle they can’t overcome. If you’ve ever worked on a project that reaches this point, you know that it’s a meaningful and memorable experience.  It’s not merely the product of good fortune or good people, it’s a direct result of the people at the top leading the charge with great forethought, courage, and consistency.

In our work with both energy and water organizations, my colleagues and I have seen clients take on daunting challenges under the toughest of circumstances. We have also seen them prevail and achieve breakthroughs, even against great odds. The key is being able to embrace the work in a way that equips people to achieve more than they knew they could. With (1) a successful launch, (2) a roadmap for dealing with inevitable difficulties, (3) short-term wins that alter and inspire people’s actions, and (4) relentless focus on alignment, your next project can be well-positioned for unrivaled results.  It starts at the top — with a new visionary leadership perspective, a resolve to make a significant difference for their company and industry, and a commitment to engage their people to aspire to perform beyond the limits of prior experience — and even beliefs — about what is possible to achieve.

Elizabeth Dorey is an author and capital projects consultant with expertise in both the water and energy sectors. In her work with clients of JMW Consultants, she helps leaders, teams, and organizations deliver large-scale and complex capital projects by strategically overcoming obstacles and elevating performance. Elizabeth also serves as Business Leader for JMW's Americas Group. She holds a Bachelor's degree in Finance with a minor in International Business from Miami University at Oxford, OH, and is based in in Houston, TX.

Image credit: "Pipeline" Ray Bodden © 2008 used under an Attribution 2.0 Generic license: https://creativecommons.org/licenses/by-nc-nd/2.0/