En Español



Very usefull links



PW
Bookstore





News links

AP

AFP

Aljazeera

Dow Jones

Oil price

Reuters

Bloomberg

Views and News
from
Norway

 

 

 

 

Oil company management under pressure for non competitive human resources, recruitment, innovation - McKinsey

 

 

 

By Libby George

LONDON
Petroleumworld 12 04 2017

Oil and gas companies' rigid structures are putting them at a disadvantage to other industries, according to at McKinsey study, threatening to knock recruitment, worker retention and returns to investors.

In a survey of “organisational health” - a kind of stress test for company resilience and workforce well-being - the management consultants found that oil and gas companies scored worryingly below the global median average.

Unless oil and gas companies adapt, “they're going to find it increasingly hard to compete, both in performance and the war for talent,” said Christopher Handscomb, a McKinsey partner.

The survey included staff at all levels of roughly 30 companies, from “supermajors” at the level of ExxonMobil and Shell to national oil companies to smaller integrated players. McKinsey declined to specify which companies were involved to protect their clients.

Oil and gas companies scored particularly poorly on leadership and innovation, the survey found, flagging worries that they are not allowing workers to grow in their roles - a key problem now that top energy companies compete with the likes of Apple and Google for the brightest workers.

One issue, Handscomb said, is oil companies' top-down, standardised operations for everything from refinery maintenance to the structure of meetings.

“Almost by design, it squeezes out bottom-up innovation,” Handscomb said of the structure.

The report found that the median organisational health index of the oil and gas company sample came in four points below the average of all companies surveyed.

Sectors that did well included scientific and consulting firms and multi-sector conglomerates.

While energy companies' structure is designed for the unique safety concerns of an industry working to prevent the next Exxon Valdez or Deepwater Horizon disaster, companies must find a way to stop it blocking cutting-edge ideas or crushing worker progress, the survey said.

McKinsey found a “powerful, proven relationship” between organisational health and average return to shareholders, with “unhealthy” companies some four times lower.

Handscomb warned that since the oil price crash and the shale boom significantly narrowed oil and gas profit margins, companies will need to improve to weather what comes next.

“In a higher oil price environment...you can make a lot of money even if you're not top class in terms of organisational health,” he said. “As you enter more turbulent times, you need a healthy organisation to adapt and be successful.”

At least some company bosses are already concerned. Speaking at a conference in the Scottish oil capital of Aberdeen in September, Shell chief executive Ben van Beurden listed both safety and worker satisfaction as the sort of challenges that keep him up at night.

“If you want to continue to attract the talent...we have to be attuned with what people think and say,” he said.



Story by Libby George; Additional reporting by Ron Bousso; Editing by Adrian Croft from Reuters.

reuters.com 12 01 2017

We invite all our readers to share with us
their views and comments about this article.
Write to editor@petroleumworld.com

By using this link, you agree to allow PW
to publish your comments on our letters page.

Any question or suggestions,
please write to: editor@petroleumworld.com

Best Viewed with IE 5.01+ Windows NT 4.0, '95,
'98,ME,XP, Vista, Windows 7,8,10 +/ 800x600 pixels

 

 


 

TOP

Contact: editor@petroleumworld.com,

Editor & Publisher:Elio Ohep/
Contact Email: editor@petroleumworld.com

CopyRight © 1999-2016, Paul Ohep F. - All Rights Reserved. Legal Information

PW in Top 100 Energy Sites

CopyRight©1999-2017, Petroleumworld ™  / Elio Ohep - All rights reservedThis site is a public free site and it contains copyrighted material the use of which has not always been specifically authorized by the copyright owner.We are making such material available in our efforts to advance understanding of business, environmental, political, human rights, economic, democracy, scientific, and social justice issues, etc. We believe this constitutes a 'fair use' of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have chosen to view the included information for research, information, and educational purposes. For more information go to: http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this site for purposes of your own that go beyond 'fair use', you must obtain permission fromPetroleumworld or the copyright owner of the material.