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Energy & Utilities Change Adoption

Posters in the break room won’t work anymore: Are you truly investing in organizational change management to ensure a successful transformation?

12/06/2022

by Joe Pruitt

The volatility of the Oil and Gas (O&G) industry is in full effect. Gas prices seem to fluctuate weekly. California moved to ban the sale of new gas-powered cars after 2035 in an effort to accelerate zero-emission objectives. Environmental, Social, and Governance (ESG) performance is top-of-mind for leadership. ‘Net-Zero’ carbon initiatives have become the new focus as companies aim to keep up with both societal and financial pressure. Measuring progress–particularly with the goal of measuring carbon capture– will require infrastructure changes, digital technologies, and vendor alliances. What does this mean for you? There’s a need to change a lot of components across your people, process, and technology–and change fast.

However, these transformative programs continue to encounter missed deadlines, scope creep, changes in project leadership, and multiple restarts. All of these challenges get in the way of a quick, effective pivot. So, why aren’t these transformative programs working? Simply put, it’s a people problem.

Investing in organizational change management and human capital

There has never been, and still isn’t, true investment in organizational change management (OCM) and human capital (HC) initiatives. By definition, human capital is the economic value that comes from the workers’ experience, skills, knowledge, and abilities. Organizational change refers to the actions a company takes when it alters a major component of its organization, such as its culture, technologies, infrastructure, or its internal processes.

People are the glue of any organization and are, more often than not, the most impacted parties in transformative programs. Typical programs will spend a great deal of time and effort mitigating gaps from technology changes. However, that same time and attention is rarely given to understanding existing leadership beliefs, potential misalignment, company culture, performance measures, and reporting structures. Each of these has the potential to sway the employee behaviors needed to ensure lasting, sustainable change.

To get ahead of your competitors, you must deliver transformative technological initiatives that are quick to show a return on the investment. For these initiatives to actually be successful, though, employees need to be trained on how to use these new tools and processes. Many companies will invest in basic training and a few communications, but those fall short when it comes to actually achieving your desired objectives. In order to realize sustainable behavior changes, you need to shift your people infrastructure by investing in both OCM and HC. Here are five foundational ways to invest in OCM and HC:

1. Align key stakeholders across all functions and inform them of impacts from the transformation across people, processes, and technology
2. Ensure leadership understands their responsibilities go deeper than generating awareness
3. Articulate tactical ways leaders at all levels can help drive change
4. Identify change agents and leverage a change network early to help align your employees, generate interest and excitement, and remove roadblocks
5. Engage employees early to understand their concerns so you can solidify a more comprehensive change strategy

Establishing a culture of change

Behavioral change is hard work, but it’s more imperative than ever. Implementing the latest digital technology is becoming an essential component of progress. With the speed of innovation increasing, your long-term success won’t be defined by your next technology implementation progress. Rather, your long-term success will hinge on your company’s change culture. Start by embedding and encouraging change-friendly policies:

• Ensure that employee roles and responsibilities are aligned with new delivery expectations and ways of working. Revisit those roles and responsibilities whenever a new technology or process impacts the company or department.
• Adjust performance metrics and monetary incentives to focus on key components of the operational strategy.
• Establish KPI’s for transformative initiatives that tie directly to the company’s overall strategy and goals.
• Communicate to the entire company how multiple transformative initiatives align with one another and why they are necessary.
• Think of new and creative ways to incentivize employees to adopt new IT elements or process changes.
• Create stakeholder engagement activities that will allow you to truly understand risks that may derail the transformative initiative.
• Consider if your organizational structure has redundant responsibilities across positions.
• Remove approval layers within your procedures to allow for quicker responsiveness to change.
• Make sure your recruitment team focuses on identifying potential employees who exhibit characteristics that will drive desired changes in the company.

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