The downstream oil and gas industry has faced an extremely
difficult challenge over the past few years from 2015 to 2017. How were companies in this industry going to
survive while the average selling price for a barrel of oil was twenty dollars,
and the business models for many oilfield companies had been built on selling barrels
of oil at eighty to one hundred dollars?
If companies wanted to survive in the longest downturn in industry
history, many company-wide changes had to take place. For a major oil field service company in the Gulf
of Mexico region, this meant merging departments and offices, in addition to laying
off many support staff and management staff. My division lost all in house management,
moved to a new facility, and a leader from a much different department stepped
the new manager, had his work cut out for him.
Being a leader during a major industry transition is problematic enough;
yet Jessie was also taking on a new young team with a culture that was much
different than what he was used to supervising. His previous department was large
with well established procedures and protocols.
They had many global advisors that could answer any questions during any
hour. Our division had the same human
capital, however our knowledge lived in the operations team. Our global advisors were limited, and did not
always answer their phones on nights and weekends. Our field service personnel team had
multitudes of tribal knowledge that didn’t always make it back to the office,
and was not currently included in procedures.
Most of this team had ten plus years of relevant industry experience,
while office personnel had one to five years and most of the global advisors
had less than ten years of experience.
Jessie ignored repeated request from the office personnel to acknowledge
the field service personnel. He felt that the field service personnel were
replaceable and not worth his time. They
made sufficient money for the worked performed, and they should be happy to
have a job with the current industry conditions. By creating a cultural that devalued his employees,
making them seem as only “hired help”, field personnel began leaving to pursue
did not value the human capital he had encountered on his new team. The team realized
that new management believed they were replaceable. They feared for their jobs even though they
were knowledgeable, hardworking and team oriented. Jessie had a Theory X perspective. He assumed all the employees were easily replaced
because they were “just field workers”.
A study by Lawter, Kopelman, and Prottas (2015) looked at both Theory X
and Theory Y management styles with on job performance. They proved that there is not one way to evoke
maximum output from all types of people.
They concluded: (Lawter, Kopelman, and Prottas, 2015) “not only do
managerial attitudes matter, but how managers behave towards employees affects
both individual and group level performance.” As people began to quit, service
quality quickly declined.
second mistake was not valuing and understanding the diversity of his new team. He continued the management style he had
perfected with his previous team. He attempted
to use fear and money as a means to keep employees putting forth their best effort. As the department continued to lose field
personnel, office personnel realized they could no longer be the best in the
field without proper offshore service support.
These employees became disengaged and disgruntled. Within two years the department lost over half
of the original team that was merged with Jessie’s division.
original meeting had started the merge off on a positive note. However, management’s actions and decisions
proved to the team that Jessie was not committed to making the merger beneficial
for both parties. He had good intentions
of bringing the small team mentality to his large group, but he didn’t follow
through on this promise. Olsen and Martin (2012) discussed the importance of
commitment when managing diversity. “Organizations
whose DM Diversity Management approaches focus on leveraging diversity to
achieve business-related outcomes hold diversity as an instrumental value,
because diversity is viewed as instrumental in achieving business success. In
contrast, organizations that view a diverse workforce itself as an objective
without explicitly considering it as a means for achieving business outcomes
hold diversity as a terminal value.” This
was evident when Jessie treated all people as if they were the same. Not all ages,
genders, and cultures hold the same values in high regard. Most were looking for job security, not the uncertainty
Jessie never showed an
interest in the people he was managing. He did not get to know them, their backgrounds,
family, or work ethics. A study by Marquis, Lim, Scott, Harrell, and Kavanagh
(2008) looked at and interviewed CEOs of companies that were highly respected in
regards to diversity. It was noted:
For them, diversity encompassed more than race
and gender; it included age, sexual orientation, disability status, national
origin, and even style of thinking. They believed diversity management was an
essential component of their overall business strategy—enabling them to tap
into diverse labor markets, compete with more innovative products and services,
and market to more diverse customers. These executives believed that diversity
management warranted a considerable expenditure of their time and effort.
It not only made a difference in their business, but helped
them to become leaders in their field.
They also spoke with employees who noted:
… the chief executives in their companies had
established accountability for their diversity initiatives. Either they or
members of their board of directors conducted formal quarterly or semiannual
diversity progress reviews, and they rewarded managers who achieved diversity
objectives with formal recognition, bonuses, and stock options. In two of the
firms we studied, the CEO or president administered sanctions to managers who
failed to meet diversity objectives.
This explains that its not only enough for CEOs to believe
and preach diversity, but to reward those who incorporate it to into everyday business. It is also important to hold everyone responsible
for their actions. If some managers are
not meeting expectations, they should be trained and mentored to help build their
diversity management skills.
Names changed to maintain privacy