It’s time to reimagine the OFES operating model
March 11, 2021
March 11, 2021
In the energy sector, survival is the name of the game today. Bankruptcies, M&A deals and divestitures of segments... For many oilfield equipment and services (OFES) companies these activities aren’t new; they have sold off parts of their businesses, transformed or restructured recently.
But this time feels different. We can already see them shift toward the future through clean energy initiatives, digital transformations and a renewed focus on innovation. Two recent examples come to mind:
Delivering on these promises will not be easy. OFES companies are required to take on entirely new capabilities, rely on new partnerships to push innovation and work with customers in different ways than in the past. They will need to examine their existing operating models with a fresh eye to determine whether they are still fit for purpose. Kates Kesler, a leading organization design consultancy that is now part of Accenture, has created a simple model for understanding the seven operating model design components: operating framework, organization capabilities, organization model, enterprise roles, function blueprint, decision forums and guidelines and horizontal networks.
Of these components, I believe three are particularly relevant for OFES companies to consider.
1. Organization capabilities
Many OFES players have identified the key capabilities needed for the path forward. These include “green” technology, innovation and product management. Two capabilities requiring a fresh look are customer centricity and digital enablement.
2. Enterprise roles
OFES companies would benefit from a re-evaluation of the enterprise roles tasked to shepherd the execution of the needed operating model shifts. Some questions to ask:
Ensuring roles are configured in a way that enable success across new ways of working and new portfolio areas such as green energy will be essential.
3. Horizontal networks
More than ever before it will be paramount for OFES players to create networks across segments, product lines and divisions. Leveraging scale, collaboration and best practices doesn’t always require the creation of a complex, matrixed organization. There are more informal ways to ensure the right connections and conversations are happening.
<<< Start >>>
<<< End >>>
Many OFES companies want to move up the “ladder” to assume complex integrator roles without fully understanding what is required to successfully execute. More isn’t always better. Taking a fresh look at culture, focusing on connection points and assessing where collaboration adds value for the client can help guide what makes sense from a lateral integration perspective.
OFES companies need to ensure their operating models will adequately support a different future. We’ve looked at three operating model components, but there are more that can (and should) be re-evaluated when it comes to activating a new business strategy. It all starts, as Kates Kesler explains, with asking tough questions:
OFES companies must ask themselves such questions if they want to position themselves for growth in the future. There’s not a moment to waste. The future is fast becoming the now.
Sources:
1. ESG and TechnipFMC presentation, 9 Nov 2020, http://www.technipfmc.com
2.https://www.halliburton.com/content/dam/halliburton/public/news/pubsdata/press_release/2020/halliburton-launches-innovation-lab.pdf
Disclaimer: The views and opinions expressed in this document are meant to stimulate thought and discussion. As each business has unique requirements and objectives, these ideas should not be viewed as professional advice with respect to the business. This document may contain descriptive references to trademarks that may be owned by others. The use of such trademarks herein is not an assertion of ownership of such trademarks by Accenture and is not intended to represent or imply the existence of an association between Accenture and the lawful owners of such trademarks.