Really good leadership is a critical issue in the oil and gas industry. The complexity involved in the extraction, transportation, and processing of raw materials call for very reliable performance often in the roughest environments.
Think about it. The oil and gas industry involves the most hazardous work in the world. It doesn’t matter if the resources are offshore, requiring drilling into 6,000 ft of water and inordinate safety risks, the industry will invest billions in extraction projects to bring it to the surface.
They do so under the constraints of being environmentally responsible and without hurting their workforce. For the latter that means they have to establish a culture of error prevention. They have to be good at engineering, and they have to be really good at decision-making, because part of the job is making decisions very quickly about very dangerous circumstances.
That’s where leadership comes in. Because of the exposure they confront every day, workers in the oil and gas industry need leadership that is keyed into doing what is right for safety more than just doing right for production.
For example, the stop work program is designed to mitigate the likelihood of errors that workers can make on the job. Stop-work dictates that if workers confront a problem with the work they are doing, they have a responsibility to stop that work.
Yet if I’m a worker for any major independent or major oil company, I know that at some point, oil prices will drop and my job will be at stake. Therefore, my incentive to stop work despite heightened risk is diminished. I want to always appear productive and compliant so my company will be less likely to lay me off when the bad times roll around.
This is where good leadership comes in. How can leaders know how to get the message across that the thing that makes me a good employee is the
willingness to stop work? Especially when leaders operate in a culture where they often reward people for their productivity?
It is extremely important for leaders to understand the leadership practices and behaviors required to make the workforce believe that when leadership wants them to stop, workers believe it, and they stop. To earn that kind of trust requires an internal assessment of skills, attitudes, and learned experience.
Becoming an Effective Leader
There are three ways to show effective leadership in the oil and gas industry. They can be summed up by three questions leaders should ask themselves:
- Do I know what good leadership consists of?
- Do I know how to do it in a way that is effective?
- Do I know how well I’m doing it?
Let’s start with the first: Do I know what to do?
Leaders who are perceived as not doing the right things won’t be effective, period. Leaders may think they are executing great leadership behaviors and practices, but the workforce may have another interpretation. So the first issue is for the leader is to get honest and accurate feedback. If you don’t get that, you have no way to know how effective you are being.
The second question — do I know how to do it in a way that is effective? — is about understanding right behaviors, practices, and activities. Maybe the leader hasn’t been trained properly, maybe the person who trained them wasn’t effective. Either way, the leader has to have a strong grasp of the best practices and very importantly how to execute them when it comes to safety.
The third question — do I know how well I’m doing it? — is about feedback. The research is clear: if you are going to be an effective leader, there are a set of practices that you have to know. You have to execute them and have to get honest, accurate and anonymous feedback on them. Because it doesn’t matter what you think, workers act on what they think. So leaders need to get feedback on the impact of their direction to make sure they are saying and doing the right things, not the wrong ones.
The Four Pillars of World-Class Safety
The math is simple: If leaders are more effective at leading, reliability and safety will improve. We recognize that this results from leaders making sure they understand best practices and are getting feedback that is transformative. High-quality leadership of this caliber is a necessary ingredient to achieving what we call the four pillars of world-class safety. If leaders in the oil and gas industry embrace these four values, their workforce will respond positively and, as a result, the safety at their organization will improve.
Pillar 1: Have a Passion for People.
Leaders must see it as their personal responsibility to keep people safe every day. For companies that truly excel in safety, the passion for safety must come from a deeper place, from the hearts, as well as the minds, of their leaders. We refer to it as a personal safety ethic. When safety derives from a personal safety ethic, the leader is committed to the safety of people because “the right thing to do” is embedded deeply within their personal values system.
Pillar 2: Focus on Employees at All Levels to Continually Seek to Identify, Control and Reduce Exposure
A focus on exposures is a radical departure from a focus on hazards or unsafe actions. It requires probing deeply into the factors causing vulnerability to address them before incidents and injuries occur. In organizations focused on exposure, people understand that potential matters. They pay disproportionate attention to those exposures with the greatest potential for life-altering injuries and fatalities. Organizations that excel in safety never lose sight of their dedication to eliminating all injuries, but they are proportional in their allocation of resources and in their response.
Pillar 3: Align Resources and Systems to Address Changing Needs
This means having enough trained workers and equipment, as well as supportive safety and performance management systems, to ensure tasks are done safely and on schedule. Organizations that want to consider themselves world class emphasize safety in employee selection, compensation, training and development, and organizational structure. They encourage actions and motivate behaviors that build and sustain a culture of safety excellence.
Pillar 4: Encourage Continuous Improvement and Change
Organizations that consider themselves world class recognize that science, technology and generational change are inevitable and positive. Change is viewed as a chance to further control and reduce exposure. It’s a given that improvement must be never-ending, and that where there are breakthroughs or better ways, they must be welcomed and mastered.
Jim Spigener is chief client officer at DEKRA, which provides safety-related services to various market sectors, including the oil and gas industry.