One of my pet topics which I bang on about here is the inability of oil companies to recruit people, usually in response to the latest whine from an oil industry executive about how difficult it all is.
But there’s an important point to note here. Oil companies have no difficulty in recruiting people, as demonstrated by the ever-increasing headcount and new departments which appear and bloom like flowers in spring. The problem is these thousands of people they get through the door, and the new departments which they form, are often tangential to the business of getting oil out off the ground. Ask anyone who works for a major oil company to describe what all departments in his organisation actually do, and you’ll see by the blank look on their face that I’m right.
But that’s really a problem of having too much money, which means efficiency is unimportant (see here). But for all that, oil companies do have a serious problem when it comes to recruiting people who they desperately need to run their operations, and once again it is not due to a lack of talent in the marketplace but rather a lack of understanding about what sort of people they actually need.
A mate of mine spent a summer on an internship for an investment bank in London, where he worked his arse off until the early hours every morning on mergers and acquisitions. He told me that the hours were long, and the work intense, but not really difficult. Anybody reasonably bright could have done it, but the investment banks insisted on taking only the cream of the crop from the top universities into their graduate programmes. Why? Because they were paying so much they felt they should only be looking to get the very best people. The result was a lot of very bright, highly educated people attracted by the money found themselves doing jobs they hated and for which they were entirely unsuitable. It’s somewhat of an ego thing on the part of the investment banks (and they’re not alone: I know one London law firm who simultaneously struggles to recruit and insists only Oxbridge graduates are considered).
Oil companies have a similar problem, partly driven by egos and partly by a failure to understand how the role of a major oil company has changed in the past few decades. The major oil companies probably have the best overall employment packages in the world, and their graduate packages are particularly good. As a result, the number of applicants far exceeds the number of places, so the oil companies are in a position to make exacting demands. This means that they generally recruit only the very brightest and best engineers from the top universities (at least this is true for the European majors; the American oil companies tend to recruit from universities with strong oil and gas programmes). Which is great, until you realise that you don’t actually need only the best and brightest engineers as the majority of your operational workforce. More importantly, you don’t want that either.
The best and brightest engineers I knew in university, and later in the workplace, were brilliant problem solvers and liked to deal with numbers and hard facts. In the early years of the oil industry, these were the sort of people who would go to a new location and design, set up, and run an entire operation from the drillbit to the offloading line. The engineering and technical problem-solving was done in-house, and it made sense to employ lots of engineers who were also the managers of the projects and operations. And given the isolation in which some of these guys worked in the Dutch East Indies, Persia, and Venezuela having them super-bright and with fierce egos undoubtedly served the companies well. Faced with a problem, they could resolve it by applying technical principles, skills, and knowledge; or old-fashioned self-assured bloody-mindedness. Therefore, it made sense to recruit chiefly those who had these abilities.
The problem now is that the oil industry is nothing like this any more. Other than in the geosciences (i.e. exploration, reservoir management, geology, etc.) and drilling, the oil companies don’t actually do much engineering any more. They retain a core competence in HQ, and a lesser competence in the operating subsidiaries, for the purposes of providing general oversight, the resolution of a small number of highly specific issues, and some research and development, but otherwise most of the engineering is subcontracted out to specialist companies. Even at the early stages of a project, the engineering is not done in-house. The role of an oil company these days is not to carry out complex engineering, but to manage contractors, partners, investors, governmental authorities, and other stakeholders. The added value which a major oil company brings to the table nowadays is the ability to find and analyse oil and gas reserves; the ability to finance a major project; and the ability to project manage. The engineering and technical expertise they used to supply can now be found elsewhere in the specialist service providers or engineering companies.
So given that one of the main roles of an oil company is to manage the relations between contractors, partners, and stakeholders from a bewildering array of cultures and nationalities, ask yourself this question: what were the social and personal skills of the best and brightest engineers you knew at university like? Exactly.
In effect, you’ve got the college geeks who were playing online Command & Conquer until 3am and attending Star Trek conventions now in charge of managing the complex personal relations of thousands of people in a multi-billion dollar industry. Give them a technical problem to solve, and they’ll get stuck in and give you a cock-on solution the next day. They understand numbers, physics, and hard facts like the relationships between pressure and temperature.
Unfortunately, this is not the skillset which helps in managing people, who tend to be a lot messier and unpredictable than numbers and mathematics. And the majority of oil and gas management in the modern era is managing people, something the oil companies don’t seem to have figured out yet. I recently went on a superb Interpersonal Relations course in Paris (trust me, I needed it) and one of the things we were taught was the difference between a “big picture” person and “details” person; and between high and low context cultures.
Engineers are almost by definition “details” people, and most of them from a low context culture. A manager needs to be a “big picture” person and in the modern oil business have a good understanding of high context environments (I must confess this latter concept was new to me, and I wish I’d been aware of it earlier in my career). The typical career path in an oil company is to be recruited as a super-bright, number-crunching engineer and after a set period of time you’re catapulted into a management position. Here you’re supposed to deal with people and personal relations, whilst maintaining a “big picture” outlook. Unsurprisingly, most of them are fucking awful at it, masked only by the fact that the company is making gazillions no matter who is managing what. Faced with people who aren’t behaving as expected (for whatever reason), the typical ex-engineer manager will think he hasn’t explained himself properly (being completely unaware of the high-context culture he’s in) and start treating people like retarded children. This is coupled with a fear of losing control, and so he attempts to regain control by asking for more and more (and more!) information of an ever-increasing level of detail until the whole operation has been reduced to a bunch of numbers which he can personally “manage”. In other words, he has quickly retreated to his comfort zone and back to crunching numbers. It’s micro-management, which is not management at all.
So where do I fit in? Well, I’m a mechanical engineer by degree, but a bloody awful technical engineer who realised pretty quickly that my organisation, administration, and communication skills far outstrip my technical abilities and that a rapid move into project engineering was the way to go. When I once found myself a manager of a dozen or so engineers with very little proper personnel management experience, I just kind of went at it in the way I thought best. Asked about it a couple of years later, I guess I manage people the way I want to be managed myself, i.e. generally left alone to do my job but supported where required. I gave my lot general guidance on what I expected, told them what role they performed in the context of the overall operation (something very few managers do, by the way), told them the door was always open should they need anything, but otherwise left them to get on with their job as they saw fit. Provided the technical drawings came out accurate – and they did – I really wasn’t bothered with exactly what they were doing and how. This is not due to any great managerial insight on my part, it was simply the fact that I had very little knowledge of the discipline engineering they were carrying out. And I had the sense to belt up and listen when one of my lead engineers was telling me something.
My point is that you don’t need to possess great technical ability to be able to manage a technical team. In fact, this is often a hindrance. You usually know what engineering discipline your manager considers his specialty because that’s the area of the plant he wants to design himself, perhaps forgetting that it’s not his job any more. What I did for my lot was to provide the organisation, administration, and direction which engineers much prefer to be provided for them: if this is missing, the engineers cannot perform. And I also kept a lot of the shit off my department, ensuring that they weren’t being handed shit-burgers because some other department was serving them up and needed somebody to help polish them off. I’d say my efforts were more directed towards other departments than downwards through mine, my guys pretty much managed themselves (hence when I went on leave, nobody noticed). The result of this is that I was never really busy. In fact, given my level of authority put me just above office driver in the organisation, I had very little to do. A couple of hours a week at the most. By contrast, most of the other managers were working 12-14 hours per day and weekends, pulling their hair out over a mountain of issues, and telling me I was very lucky that I wasn’t busy.
Lucky? Or just able to delegate? When I looked at what these mega-busy managers were actually doing, I often found they were engaged in fine-detail number crunching which one of their team was paid to do, or they were dealing with an almighty mess which had been passed to them because they hadn’t the balls to say “Don’t think so matey, not in that state. Now off you go and do your job before you pass this shite onto me.” A lot of the time these guys would tell me they had to do the job of their subordinates or it wouldn’t get done at all. Then when you look a bit deeper you find the subordinate has never had his job properly explained to him, his job description is a garbled mess, he is receiving confusing and contradictory instructions, and he has been written off as being useless on Day 1. No wonder the managers are all busy.
This would not be so acute a problem were the only people that need to be managed internal. But unfortunately for us palefaces, gone are the days when we could just rock up unannounced in a country where we’ve bought a tract of land, run the natives out of their ancestral village before setting it ablaze, and go on our merry way with the business of drilling and pumping oil. These days we need the permission of local governments, approval from local authorities and regulatory bodies, we are forced to work in partnership with local engineering contractors, and we need to interface with the local communities and a thousand other interested parties. This doesn’t require technical ability, but it does require one to have a personality, communication skills, and the ability to adapt to whomever is sat in front of you that morning. I’m not saying I could do this job – I really don’t think I could – but when trying to find somebody suitable it probably helps not to have to draw from a pool of people all of whom are brilliant engineers just off the autistic scale who never had a mate they didn’t meet online and have been told on a weekly basis for the past decade that they are smarter than anyone else by virtue of their working for a major oil company. And that the company is never, ever wrong.
Oil companies need to understand that good managers have a different skillset from good engineers, and that good managers will complement good engineers (the former allowing the latter to be used most effectively). The funny thing is, it is extremely difficult to find anyone in the oil companies who is even aware of the problem. Even when they see the mess in front of them, they just assume “that’s just how it is” (and normally shift 100% of the blame onto either the contractor or the local employees). If you were to suggest to any senior manager or HR person that maybe we should be recruiting guys who have run a branch of a service company for 4-5 years and making them managers, instead of promoting the engineer with milk-bottle glasses who gets nervous in groups of more than 3, they’d think you’d gone mad. “Oh no” they say, “we need people who understand the full technical details of the job, otherwise they won’t be able to manage it.” The possibility of the manager shutting the fuck up and listening when those engineers who are paid to understand the full technical details of the job speak, thus negating the need for him to possess the same knowledge independently, doesn’t seem to have occurred to them. Not that I’m saying oil companies should recruit random philosophers, historians, and teachers as their management, far from it. All of them need to be engineers or similar by backgrounds. Just they don’t need to be those that were top of the class, better to get the guy who scraped a 2:1 because he spent a little too much time on the piss and still spends his free time arranging rugby tours.
It’s one thing for oil companies to complain they cannot recruit the right people. It’s quite another for them not to even understand who the right people actually are.