Category Archives: Corporate Change

How change management can help realize organizational goals

Although 2015 has certainly arrived with numerous challenges for the energy industry, in the form of both slipping prices and increased regulation, there are opportunities for organizations that can increase their operational efficiency. Market conditions have squeezed many oil drilling companies' margins, making it necessary to restructure existing processes to weather the current slump. 

However, teams need to understand the motivation for changes, and how they can contribute to their employer's continued success. This requires considerable planning and foresight to ensure that all personnel understand how their daily operations will be impacted by change, and are excited about the prospect, rather than resistant. 

Pursuing change management consulting can supply the following benefits:

  • Provide a detailed change strategy: To be effective, change efforts need to be carefully planned and executed. Outlining the benefits of the change before implementation can help reduce resistance and motivate teams to adopt new processes. 
  • Manage costs of change: When change efforts are pursued without experienced foresight, they take longer and can become more expensive. Organizational development consulting helps control these costs. 
  • Minimum impact on productivity: Operational effectiveness and efficiency is maintained or improved with the proper approach. 

By carefully reviewing existing processes for inefficiencies and including all levels of an organization in the planning stages, organizations can limit their exposure to negative market influences. Just like in the wild oil market swings of the 1980s, companies that are able to successfully weather the existing price slump will emerge more streamlined and competitive. Having experienced change management experts on your side will help your company anticipate challenges and respond effectively. 

Getting management to commit to change efforts

Like any initiative within an organization, change efforts need the support of management to find success. This can be difficult, especially if some managers were left out of the discussions leading up to the decision to pursue change. After all, change is often viewed as a threat when proposed by others, but seen as an opportunity by those involved. 

To get management involved and committed to organizational change management, they need to be shown the advantages of change. Those tasked with leading the effort need to answer the key questions on the minds of management, which include:

  • What do I gain? While many of the benefits of change, especially a culture shift, may be abstract, it is important to provide clear examples of how management will benefit. 
  • What do I lose? The majority of the resistance to change results from fear of loss: loss of influence, loss of responsibilities or loss of certain assets. Addressing these fears early in the process can reassure management and help encourage them to take a more positive view of change.
  • What role can I play? Finally, most managers want to know that they have a voice in shaping the future of their organization. Invite them to strategy meetings and be sure to keep a line of communication open to receive feedback or criticism. 

Remember, it is natural to receive some pushback when asking others to move away from their comfort zone. However, resistance is reduced if teams understand where they are headed, and the benefits they will receive upon reaching the destination. 

Seeking change management consulting can help ensure that teams are aligned to the new vision of your organization, and that change is pursued in a cost-effective and successful manner. 

Despite slipping prices, energy industry still supporting growth in South Texas

It is no secret that falling oil prices have cast a shadow over the economic growth that has taken place in Texas over the past five years. With oil prices slipping more than 50 percent since June, oil companies are looking to become leaner and more efficient to better manage existing investments. 

However, The Dallas Business Journal reports that despite market changes, some areas of the state are still optimistic about growth opportunities. In South Texas, rail yards are blossoming and many ancillary businesses to the energy industry are realizing considerable success.

"Despite oil prices, we still see growth and opportunity at this particular location," Mike Cundiff, owner of Ironhorse Resources, was quoted as saying at the recent Southwest Rail Conference in Dallas. 

Cundiff has found success in providing the extensive amounts of sand required for drilling in the region and hauling off crude oil to processing plants. 

One city in particular was held up as an example for the power of the energy industry to bring economic development. Cotulla, a small town off Interstate 35, is in the midst of building an expanded airport with the longest runway in the region, as well as constructing new railroads, pipelines and highways. Creating this infrastructure will provide necessary support for local energy players, as well as potentially create thousands of new jobs. 

Larry Dovalina, interim city manager for Cotulla, said that potential opportunities to export natural gas are also instilling confidence in residents. 

"As national policy changes and as permitting occurs related to liquid natural gas that all of these elements, rail, aviation, pipelines and highways, are crucial and essential for the cities to grow in an appropriate way," Dovalina told the source.

As market conditions put extra pressure on organizations to better manage costs, some oil drilling companies may experience the need for oil field management consulting to help ensure they are operating at their peak. 

California producers hit hardest by price slump

While many American families are no doubt excited about the prospect of lower prices at the pump, those in the energy industry are bracing for the changes that falling prices will inevitably bring. While states like Texas and North Dakota will certainly be affected, RigZone reports that California oil drilling companies will be among the hardest hit. 

At its current standing, the California rig count is at its lowest since October 2009, according to oilfield services company Baker Hughes. The number of active rigs has fallen from 48 to 21 since June 2014. However, it remains the third-largest oil state, producing approximately 560,000 barrels per day, according to the U.S. Energy Information Administration.

Los Angeles Basin oilfields once ranked among the most productive in the country, but the combination of the high-cost of production and falling demand have made the state less attractive to producers. California wells produce a viscous oil that requires the injection of large amounts of water or steam to bring to the surface. However, this has not deterred all organization. 

Ensign Energy Services said that although market conditions have changed, they will restructure and continue production efforts.

"We are not exiting California," an Ensign spokesperson told the Calgary Herald. "Just looking at the low oil price environment we're in, we're anticipating there will be less demand for drilling services in the future, hopefully not, but we don't know." 

The current volatility in the market necessitates that producers be ready to quickly adjust to changing conditions. Oil and gas strategy consulting can help organizations remain agile and ensure that resources are being utilized in a manner that provides the highest return on investment. 

Is your company’s culture ‘change ready’?

The ever-increasing pace of change in modern markets means that today's leaders must be able to take the organization in a new direction swiftly and decisively when the need arrives. However, each organization is unique. There is no universal solution to implementing a successful or seamless change, and this can make preparations difficult.

A company's structure, size, vision, culture and business needs all play a role in determining the change management strategy. These factors must be considered carefully before the transition can move forward. Organizations should strive to remain "change ready," or regularly consider the best means of aligning their company with the pace of change in their industry.

There is a long list of organizations that wrongfully believed their competitive edge would never grow dull: Blockbuster, Borders and Kodak all failed to evolve alongside the needs of their customers, and today serve as a lesson to the importance of remaining agile and driving innovation.

Just as technology has experienced rapid evolution in recent years, so hasn't the discipline of change management. While once efforts were approached ad-hoc and teams were thrown into a "sink-or-swim" scenario when new directives were handed down by management, numerous studies and experienced experts are now available to mitigate risks poised in change efforts

Building a "change ready" culture requires clear channels of communication and flexibility on the part of management. Today, new challenges and competitors can arrive unexpectedly, making it essential to have organizational change management strategies prepared in advance. As the energy industry has recently witnessed, market conditions can change dramatically in just a few short months. Being ready for change and retaining organizational development consulting helps ensure that your organization will adapt successfully.

The importance of a compelling change vision statement

This blog has discussed how important employee buy-in, from all levels of an organization, is to successful change management. If team members are excluded from conversations surrounding the need for change and are simply asked to alter their existing processes with little or no explanation, resistance can endanger the transition to a more competitive company.

This is why making a strong and effective vision statement is so crucial. A vision statement can serve as a starting point for future communication, and remind team members of how their efforts relate to larger organizational goals. A well-crafted vision statement can also aid decision-making and provide a clear picture of the organization's definition of success. 

The vision for the future of an organization needs to be robust and remain relevant for years to come. Market trends can come and go and new technologies can rise and fall, but the vision statement must remain applicable. This is why it is important to think long-term when drafting a vision statement: Your statement must reflect what you provide your clients or customers, and not simply current trends. Take for example Twitter's vision statement, "To be the pulse of the planet." There is no mention of the internet, tweets or social media, as these are subject to change, but the service Twitter provides, information, remains constant. 

When drafting your vision statement to drive change, it is important to keep in mind that professionals with different roles have varying opinions on the key services of an organization. This is why it is important to include a wide range of professionals, from the c-suite to employees on the production floor, in brain-storming sessions. Remember, do not start by focusing on specific phrasing — instead, attempt to gain a consensus on the general content and direction. 

A well-crafted vision statement can help reduce resistance to change efforts and better define where your organization should be heading. Organizational change management consulting can help ensure your company has a statement that will motivate and guide your teams for years to come. 

Texas economy continues upward climb despite price dip

Fears that 2015 would find Texas struggling to keep its economy afloat due to falling oil prices have been assuaged thanks to two recent reports. The Federal Reserve Bank of Dallas has found that Texas' economic situation continues to improve, bolstered by gains in manufacturing and the service sector. 

The Texas Manufacturing Outlook Survey showed that the state production index spiked to a level of 15.8 in December, more than doubling the 6.0 reading from the prior month. This growth suggests an acceleration of statewide manufacturing, and is a positive indication for the broader economy, as payrolls continue to expand. 

In fact, according to CareerBuilder's annual job forecast, many companies in Texas report plans to add to their payroll in 2015. The report showed that 36 percent of employers expect to add full-time, permanent employees in 2015, up from 24 percent last year. This represents the most positive survey outlook since before the recession in 2006.

"The U.S. job market is turning a corner as caution gives way to confidence," CareerBuilder CEO Matt Ferguson was quoted as saying in the report. "The amount of companies planning to hire in 2015 is up 12 percentage points over last year, setting the stage for a more competitive environment for recruiters that may lend itself to some movement in wages."

Texas was among other southern states that showed the most improved confidence in hiring, with a 14 percent increase year-over-year. Roughly a third of Texas employers explain that they will onboard full-time employees in 2015.

While falling oil prices continue to present challenges, Texas continues to offer economic opportunities for those that are able to quickly adjust to changes in the market. Change management consulting can help ensure that your organization enters 2015 with renewed optimism and confidence.  

Successful ‘cultural integration’ during a merger

Typically, a merger or acquisition focuses on identifying overlapping business processes and how departments will be integrated for maximum efficiency and performance. While these are no doubt crucial considerations, another important aspect of successful mergers is usually only considered until it is too late to make actionable decisions. When approaching a potential merger, leadership must be certain they can answer the question: "What challenges will we face in integrating these two distinct organizational cultures?"

Simply because two organizations offer similar products or services, this in no way implies that they share the same internal processes or policies. Many executives seem surprised by this notion, as they have become so entrenched in their own company that they rarely consider how or why another would do it differently. However, these differences need to be weighed carefully before the deal, or organizations can expose their merger efforts to unnecessary risk.

Leadership must understand certain cultural dynamics of the other organization, including any existing morale concerns, talent development initiatives and internal communication pathways. While these may seem like obvious considerations, they are unfortunately often forgotten in the rush of activity and analysis that preludes a merger.

In fact, The Harvard Business Journal reports on the case of the attempted Publicis and Omincom merger, which would have resulted in the world's largest advertising company. However, the $35 billion deal unraveled when both parties failed to consider the management structure of the resulting company and disagreed on the proposed operating strategy.

"We underestimated the cultural differences, and if I had the answer I would have brought it up," Omnicom CEO John Wren told the source.

As a result, shares of both companies saw declines, and months of merger-related activity was wasted. Your organization can avoid similar results by retaining change management consulting to ensure cultural integration receives the attention it deserves.