Let’s jump right in! We ended our previous post discussing why energy companies should look outside the energy industry for insights into overcoming barriers to agility, as illustrated in the honeycomb chart below. Some barriers are structural. Some are operational. And some barriers—namely, those that prevent workforces from achieving their full potential—straddle both. It’s this overlapping set of workforce enablement challenges we’re addressing today. 

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Lessons from an “outsider”

It can be challenging for any established/traditional industry to create a culture of agility and enable a workforce environment that nurtures it. Fortunately, there are many examples of companies doing just that including, Microsoft. It has embraced agility while also enabling its workforce to focus on cultural change.  

Prior to transforming its organizational culture, Microsoft suffered from similar growing pains that other companies have experienced, including the proliferation of silos. Its internal silos had developed over time to focus on specific product lines. The pivot to the Microsoft Azure Cloud required a different way of working, with different disciplines working together to invent a new future for the company. Energy companies face a similar situation. The industry has developed deep functional muscles to meet steady demand growth. It now needs to pivot to a different model—one that responds to increased pressures from shareholders and the energy transition agenda with operational and commercial agility. So, what can energy companies learn from Microsoft? 

Honor your past 

“Transformation,” by definition, means changing from one state to another. It’s rarely about starting over from scratch. It’s about building on your legacy to create something better, more resilient, and ultimately more valuable. Microsoft’s transformation involved capitalizing on its legacy of deep functional expertise in software engineering and problem-solving capabilities, and also shifting from a siloed culture to focus on the enterprise vision. To get there, its technology leaders committed to a new set of guiding principles1:

  1. Connecting outcomes to the vision and clearly prioritizing problem-solving based on data 
  2. Placing user experiences at the center of the design process with practices such as Design Thinking, DevOps and Agile  
  3. Building capabilities within role-specific disciplines—eschewing silos in favor of depth and breadth in multiple areas 
  4. Investing in core platforms and systems to drive engineering productivity and set the foundation for speed and agility 
  5. Using data and insights to continually assess, refine and prioritize the approach, ensuring that goals and achievements are aligned with the vision

The result? A new and valuable revenue stream in cloud computing through the Azure platform and a digitally transformed company challenging the traditional orthodoxies of IT operations. 

Oil and gas companies can similarly translate their historic strengths to a new model. Oil companies are pros at developing deep technical skills to enhance production and operations. Energy companies are known for their advanced functional excellence. The challenge isn’t how to scale within a function. Rather, it’s how to realize global workflow enhancements through effective cross-functional scaling. Perhaps the strong engineering and problem-solving muscles built over time could be redirected towards end-to-end workflow optimization efforts and systems thinking. By “honoring their past,” energy companies won’t lose those muscles; they will repurpose them so leaders can more effectively enable the cultural shifts that successful transformation requires. 

Embrace a purpose-driven mission 

A transformational, purpose-driven mission (the “why” statement) can enhance the intrinsic motivation of knowledge workers and ultimately lead to more effective outcomes. Providing that line-of-sight to team members can pay dividends in the long-term. Again, Microsoft provides insights for energy companies looking to reinvent themselves through adopting an effective “why” their workforce can get behind. 

Microsoft’s mission statement is to “empower every person and every organization on the planet to achieve more”.The statement not only addresses the aspirations and needs of all people, but also aligns the enterprise to a common vision.  

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In a highly competitive staffing environment, particularly among Millennials and Gen Z workers, having a purpose-driven mission to recruit and retain talent and inspire and galvanize the workforce is critical. 

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All energy companies are faced with growing requirements to increase profitability and reduce carbon emissions if they expect to play a leading role in the future energy landscape. By embracing and liberally communicating these imperatives, as well as the need to operate in a much nimbler fashion, energy companies can meet their ambitious goals while also attracting the fresh skills needed for agility. Clearly articulating the “why” and working a purpose-driven mission into day-to-day operations can be a catalyst for finding/retaining talent. Which brings us to the next imperative…

You can't fake it

Claiming change and making change are two different things. Microsoft was committed to having everyone in the organization live its new mission. That meant communicating relentlessly to the workforce about the need for, the drivers of, and the potential outcomes of a new direction. Shifting priorities and incentivizing leaders to align with the new culture and its purpose were key concepts to get right.

Microsoft grounded its culture in what the company calls the five “anchors.” These include growth mindset, customer obsessed, one Microsoft, diverse and inclusive, and making a difference.3 These are actualized through a feedback system wherein managers are trained to measure the success of their employees through the lenses of these anchors.

Cultural anchors are non-prescriptive, guiding principles that help individuals navigate the grey spaces around decision making. However, the right performance management metrics are instrumental in driving the right behaviors. Here are the three metrics upon which Microsoft employees are measured:

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1. Your personal impact

What contributions have you made towards your individual goals? 

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2. How you impact the work of others 

What did you contribute to others’ work? 

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3. How you leverage the work of others

How did you make use of, or build upon, what others contributed? 

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These simple metrics are all equally weighted. Without helping others and reusing insights and contributions from peers, the best salesperson in the company wouldn’t be compensated as well as a team player who hit her targets while also demonstrating “one Microsoft” and “growth mindset” behaviors via colleague engagement. That’s what we mean by “you can’t fake it.”  

Management teams in energy companies have often been incented to maximize performance within their siloed organizations (e.g., development and completions teams are rewarded for getting wells in place on time and under budget, regardless of future production impact). If the right performance measures are in place, managers would recognize that taking a hit in areas that may have hurt them in the past will benefit the enterprise in the future. 

Enable your workforce to enable your future

The key challenge for energy companies today is to generate cash—either to fund the energy transition or to boost returns to shareholders. To accomplish that goal and compete in the coming years, energy companies need to become more agile, responsive and purpose-driven organizations.  

The industry can learn from companies like Microsoft. Honoring your past, embracing a purpose-driven mission and backing up your claims are the building blocks of a cultural zeitgeist change that will ultimately prove to be a fiscally responsible decision. But it’s hard. And it means doing all these things consistently and simultaneously. 

In our next blog, we’ll take a closer look at the structural barrier of “Rewiring the Organization” and show how modifying the enterprise’s core structures, processes and capabilities can augment the cultural shifts described above to further promote agility across the organization. 

Special thanks to Uwa Airhiavbere, Director of Strategic Alliances - Worldwide Energy of Microsoft Corporation, for his contributions to this blog.

Disclaimer: This content is provided for general information purposes and is not intended to be used in place of consultation with our professional advisors. This document refers to marks owned by third parties. All such third-party marks are the property of their respective owners. No sponsorship, endorsement or approval of this content by the owners of such marks is intended, expressed or implied. 

Sources:
1Inside the transformation of IT at Microsoft,” Microsoft
2Empowering others,” Microsoft
3Our culture,” Microsoft

Misty Khan

Senior Manager – Strategy & Consulting, Energy


Tommy Ogden

Senior Manager – Strategy & Consulting, Energy


Herve Wilczynski​

Managing Director – Strategy & Consulting, Energy Upstream Lead

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