Excerpt: Giant Shifts by Jimmy Vallee
The Great Crew Change
– Heraclitus, Greek Philosopher
According to Heraclitus, the only constant element in life is change itself. Whatever we do, we can’t avoid change. The “good old boys” who profited sometimes from the demise of companies through questionable business practices are not going to live forever. Neither are the ethical baby boomers who contributed to our industry’s brightest moments. Everything changes.
With great change, comes great opportunity. To the external observer, the state of our industry today may appear to be full of threats: low gas prices, massive job cuts, outmoded technology, difficulty to recruit new talent. But these are also opportunities for higher competitiveness, sounder environmental practices, and more efficient technology. And only those who adapt to the changes will thrive.
Change in the oil and gas sector today is multifold. On the one hand, we have market changes, higher productivity, and on the other hand we have the looming retirement boom and the talent gap. These conditions create such a complex dynamic that only those who achieve the right kind of synergy will manage to stay competitive, become attractive for young talent, and efficiently manage the knowledge hand-off from the retiring Baby boomers to the rising Millennials.
What’s in a generation
– Arab proverb
When Strauss and Howe published “Generations” in 1991, much of the press and academia viewed the book as a sort of “horoscope” with little scientific ground. However, as their work in defining the parameters of what each American generation was like progressed with a series of follow-up books, it became apparent just how influential their thinking had been. In fact, it was Strauss and Howe who coined the term Millennials.
It was thanks to Strauss and Howe that the American public began to think of the idea of each age group sharing a belief system simply because of what kind of time they had grown up in. The world was very different before 1991, and the advance of globalization only made generational traits more dramatic. In 1965, trends and ideas took longer to spread, but with the advent of the Internet, younger generations began to be tuned in to the same wavelength in a way the world had never seen before.
Today, understanding generational dynamics is key for any business looking to thrive in our uber-connected world. Thus, one of the keys to success in our industry today is understanding Millennials, allowing them to share with our industry the technology and the knowledge that it needs in the twenty-first century and passing on to them the know-how acquired by senior employees over decades of work. Just by the numbers, Millennials have become the largest generation currently in the workforce in America. As of 2015, there were 53.5 million Millennials working in the US, compared to the baby boomers, which were about 44.6 million. Then, sandwiched in between the Baby boomers and the Millennials is my generation – Generation X, with about 52.7 million people currently in the workforce.
As the Baby boomers, born between 1945 and 1970, reach retirement age, Millennials continue to go into the workforce, graduate from engineering schools and start shopping for opportunities. Meanwhile, Generation X is in its forties, occupying the majority of management positions, in a strategic spot to facilitate the greatest transfer of knowledge and wealth in history. All three generations have very different mentalities and extremely divergent views of the oil and gas industry, and we must be prepared for this massive change. As Heraclitus would have it, it is the only thing we always must be prepared for, and he lived in disconnected, non-globalized ancient Greece.
The skills shortage
The 1980s oil bust is one of the key events that brought us to the complicated demographic shift our industry is facing today. With crude prices plummeting from thirty-five dollars to ten dollars a barrel, massive layoffs presented an image that oil and gas was not the sector to look for job security. At the same time, many companies stopped hiring and less and less people began to matriculate into earth science and geophysics programs in University. To add to the mix, as technology improved personnel efficiency and companies downsized, senior staff had less time on their hands to devote to mentoring newcomers.
After three decades, those conditions and those staffing decisions have created a significant gap in the oil and gas workforce. While it is not too late to adapt and come out victorious, it all boils down to how we manage to fill that gap, attracting skilled laborers, keeping them safe and satisfied for the long-term, and training them efficiently. Safety is one of the pillars of our industry, safety for workers and for the environment as well. One of the mistakes we might easily make, in our urgency to fill the gap, is putting insufficiently trained personnel in sensitive positions. Our future will depend on the path we choose. Filling the gap will require flawless planning, the adoption of new technologies and heavy investments in training and development, and making the industry increasingly attractive to investors is a key element in the equation.
As thousands of experts retire with very few skilled replacements at hand to take over their responsibilities, massive amounts of critical knowledge and experience are at risk of being lost, as insufficient time or budgets make it impossible for the transfer to occur smoothly. Many key processes in our industry require considerable experience to ensure safety and efficiency, and this often needs actual time spent performing the tasks, in addition to whatever degrees new hires may have.
The four-generation workplace (going on five)
"It only takes a year to build a billion-dollar ship, but it takes 10, 20, 30 years to build a billion-dollar captain who's going to navigate and command the ship."
John Konrad ('Fire on the Horizon: The Untold Story of the Gulf Oil Disaster')
Today’s workforce presents a singular picture, never seen before in American history. sixty-year old Baby Boomers work side by side with inexperienced new hires who are young enough to be their grandchildren, Generation X managers make decisions that will determine the fate of coworkers who could be their grandparents. Civics are taking orders from Millennials who could be their great-grandchildren. And soon enough, in a few years, a new generation will join in and, for a brief period of time, there will be five generations working side by side.
How can we stimulate Millennials to bring all their technology savvy to our technology-thirsty industry? How to keep Boomers and Civics interested at the end of their careers, so that they can be motivated to pass on their know-how? How can we best enable Generation X-ers to bridge the gap? The problems are complex, but the answer is simple, as long as we keep our focus on all the delicate aspects of the knowledge hand-off, taking into account the generational dynamics created by each group’s characteristics and the present challenges in our industry.
One of the reasons we have so many generations in the workplace is the delayed retirement of Boomers and Civics. While this makes managing the workplace more difficult, it is also a godsend in terms of the skills shortage in our industry: if Boomers were to retire early with no inclination to share their experience over a lengthy transition, our industry would suffer a great loss, one that would be very difficult to recover from. That is why it is so important to get Boomers motivated about the transition and the knowledge hand-off, because if we don’t make it interesting, they would probably rather be lying by the pool somewhere in Florida than mentoring a twenty-five-year old in the nuanced operations of an offshore oil rig.
Top-tier managers and decision makers have the task to make each generation feel important and understood. The industry needs them all to face the challenges of the coming decades, and when we are done with the retirement boom, it will be time to prepare for training and mentoring Generation Z. The skills shortage is in reality an opportunity to put hand-off processes in place that will serve our industry for many years to come. The same can be said of our efforts to attract new graduates and young talent to matriculate into our industry by connecting with Universities and changing the perceptions of oil and gas industry jobs in the public eye.
With boomers trying to get the hang of social networks, civics who appear little inclined to ever retire, Generation X-ers who are all about carpe diem and individual success, Millennials who want every day to be casual Friday, how can decision makers manage such a diverse ensemble?
First, it is important not to focus too much on generational stereotyping. Once we start assuming that people are or should be a certain way because of their age, we have a problem. Whatever generation they might belong to, each worker is an individual, and pigeonholing them into our idea of the typical Boomer or Millennial can only cause trouble.
While it is helpful to understand the general characteristics of each group, making decisions based on these stereotypes can be very damaging for workplace dynamics in our industry. I am offering some information and research findings about each generation because at this critical time, we must know what we are dealing with in order to smooth the transition, but this knowledge has to be put to use with caution, and certainly never used in internal communications; “The Millennials are this and that, the Boomers will be pleased with such and such” is probably not going to roll well with people who have a right to consider themselves unique human beings entitled to their individuality.
Understanding the new generations
Company cultures are key in today’s multi-generational workplace. As competition for talent intensifies, the cost of replacing retiring workers keeps escalating, and productivity is linked to engagement with a healthy work environment, employers need to focus on providing a satisfying workplace experience for workers from all generations. The miscommunication and clashes that can arise from generational differences in a simultaneously aging and diversifying workforce can be catastrophic if we don’t put the organizational cultures in place that can facilitate coexistence and collaboration between boomers, Millennials, Gen Xers, civics, and those to come.
In a cover page article, Time magazine called Millennials the ME, ME, ME generation. They are living with their parents longer, marrying later, and, according to some researchers, they suffer from Narcissistic Personality Disorder more often. Millennials are the iPad and smartphone generation, but they are also the generation that grew up with terrorist threats and frequent news of school shootings. They demonstrated and voted for same sex marriage and marijuana legalization, they sign AVAST petitions to save the dolphins and liberate oppressed Middle East women.
A 2015 report presented at Boston University mentioned that half of the students applying for University had consulted with their parents and also that the prevalence of psychological disorders amongst them had increased when compared to previous generations1. Some argue that the decrease of direct human contact in favor of contact through technology may be playing a role in the generation’s overall mental health.
Millennials are highly connected, engaged, and they place a premium on job satisfaction. RESEARCH showed that company reputation was currently more important than compensation for those matriculating into the oil and gas industry.
Today, forty-three percent of the oil and gas industry workforce has been in their current role for less than two years. This puts them at a disadvantage in terms of experience, and the problems arise when seniors try to impose their military line of command management styles on the Millennials in their teams. Millennials believe that whoever knows the answer should be able to contribute to solving a problem. They believe in their right to explore different ways of looking at an issue regardless of what their superiors may have ordered them to do.
In industries where safety is critical, this poses a complex problem. Millennials may know the technology that can save an oil company lots of resources, but if they have not received adequate training, they may not be in a position to collaborate with boomers or Gen Xers to the full extent of their capabilities. Moreover, if the systems in place are bureaucratic and outmoded, they may even be unable to put their skills to work regardless of other conditions.
A good example of this is the issue of paper-based research. Present conditions in our industry indicate that there will be increasing mergers and acquisitions (M&A) and collaborations between different companies as a result of the oil pricing crisis. On the other hand, we are facing this massive knowledge hand-off. Critical information that might pertain to patents and key assets developed in the research labs require security and efficient knowledge transfer protocols. It is not only for the benefit of the Millennials that we need to have these processes in place, but also to stay competitive in our industry. 15 years ago, the pharmaceutical industry successfully underwent a transition similar to the one oil and gas needs today. We are not talking only about data management systems to store and share research findings, but also about intellectual property (IP) data management that can keep track of how a certain experiment was carried out, because this can be essential when it is time to provide proof of invention. It is our task to create a favorable environment to put Millennials` tech savvy to work in our labs and in our data management teams. They may expect all of that to be taken care of and functioning flawlessly from the beginning, but it is our job to motivate them and collaborate with them to transition and thrive.
Millennials on the rise
An estimated 80 million Millennials were born between 1980-2000. By 2015, 53.5 million of them had matriculated into the workforce, surpassing the 52.7 million Gen Xers, the 44.xxx Boomers and a minority of civics, who still have xx million employed in America. Millennials represent thirty-four percent of the people employed in America today, but by 2025, they will represent seventy-five percent of the global workforce. They are a massive generation, and they are going to set the tone of the workplace in the oil and gas industry in the coming decade.
Millennials are children of globalization and multiculturalism. They have seen people who run billion dollar companies from their basements while wearing pajamas, and this has made them goal-oriented rather than obligation-oriented. Because they were raised in child-focused environments, they expect to have coaches and mentors who can teach them the ins and outs of their jobs.
They enjoy multitasking, and they are usually good at it, as opposed to people of previous generations who can sometimes lose track of what they were working on if distracted by something else. This can be a fantastic skill to have, but imagine a boomer who is handling a critical safety process at an oil platform being distracted by a Millennial with a lesser issue, because the Millennial expects the senior employee to be able to focus on the pressing matter at hand again, once she is done answering their question.
This minimal scenario could be the source of a catastrophe. And perhaps one of our key roles as policy makers and leaders is to create an environment where a boomer’s ability to focus and draw from decades of experience to avert a crisis and a Millennial’s ability to multitask and not lose track of the sidelines while keeping his eyes on the prize can work together, in harmony, for the greater good.
Understanding Millennials` diversity is also key to managing the workforce in the oil and gas industry. If we compare the first boomers to the latest Millennials, the boomers are seventy-five percent white, while Millennials are only fifty percent white. Blacks have gone from nine percent to fourteen percent, while Latinos have gone from nine percent to twenty-six percet. How does a Latino Millennial react to the old white boy club that is still running a large part of our industry? How can they feel if managers do not mentor them properly and send them out to perform critical tasks unprepared? What happens when they fail to perform and they have to face their superiors in a military hierarchy? What happens when they observe that their bosses are not using all the technology they could be using to make processes run smoother? And how can we keep them motivated after they realize that top-tier positions in the industry may not be diverse enough?
Diversity by generation graph2
Upstream or downstream, in any area of our industry, if we haven’t faced these problems yet, we are about to face them in the coming years. We need Millennials to make up for a shortage of fifteen thousand skilled laborers in oil and gas, we need to make their prospective workplace in the industry a lot more like what they expect: a collaborative environment with minimalist décor and state-of-the-art technology, where coming to work in flip flops does not disqualify one to offer the solution to a complex problem and where everyone has a voice and a chance to thrive and climb up the ladder based on their skills and attitudes.