Virtually every book, blog, or magazine article on leadership is full of vague, abstract concepts. Terms like “technical debt,” “agility,” “partner shipping,” and “all-in culture” can be understood in the context of a sentence. But when it comes to my personal favorites “business value” and “value creation,” few people can genuinely translate them into a meaningful advantage.
So when a leader is described as “relentlessly focused on value creation,” I often wonder if this is just another way of playing the language game. However, according to Melody Meyer, board member of BP and president of Melody Meyer Energy, value creation is about making decisions that lead to differentiated results.
The importance of immersing culture in value creation
“Oil and gas companies make big investment decisions. There are mega initiatives that cost billions and small workovers with six-figure budgets,” Meyer shared during the keynote presentation at the 2019 Best Practices for Oil & Gas conference. “When leaders look back at every decision made and action taken during these projects, they should be able to stand up in front of their team and say what outcomes are expected and which ones are delivered.”
This leadership style can be quite transformational, especially when a change fails. Businesses have to try new ideas early while remaining open to failure. “How else can leaders know what new ideas will work and which ones won’t?” reflected Meyer. “We learn from our failures, apply those lessons quickly, and try again with accountability and facts.”
Take, for example, an exploratory project that is rendered unsuccessful after a hurricane causes millions in damage to offshore infrastructure. With two out of three platforms lost, systems shut down, and pipelines weakened, the news can be disastrous. But when a culture is relentlessly focused on value creation, moments like this bring an opportunity to step back from the leadership team and reconsider the path forward.
For Meyer, a time like this is best spent reevaluating the direction of the business and its investments. “I like to define a variety of things that have to be done well to become more competitive. This list may include investment performance, exploration performance, safety performance, and workforce culture. This line of thinking even inspired my team to design (and later build) a new LEED-certified building in a location that was more secure,” she shared.
By turning information into a multiyear roadmap, oil and gas providers can get on the path toward restoring exploration operations. “Deliberately following a road map can reinforce a company’s position with every employee interaction, especially when that vision is shared with the entire workforce,” said Meyer. “Whether they were focused on hurricane restoration or business operations, employees know what they have to do to help rebuild the company and make it stronger.”
A level of excellence never before experienced
Oil and gas markets are tremendously volatile and competitive. Gasoline usage is declining. The demand for petrochemicals is growing. And even geopolitically induced changes in supply are keeping oil prices unpredictable. All the while, industry players are just trying to survive by repositioning themselves to be run more efficiently and opportunistically to create an advantage from change.
“By fostering a culture of value creation, oil and gas businesses can operate at a level of excellence that’s never been experienced before,” concluded Meyer. “From price changes and mergers to embargo situations and hurricanes, every change can become an opportunity to become stronger. And with that experience, industry players can make decisions confidently no matter how significant the crisis.”
For more on transformational leadership, see “Organizational Resilience Is A Competitive Advantage.”