Realize that this is a new reality

Psychologist and entrepreneur Nashater Solheim has worked closely with leaders in the oil and gas industry for several years. Here is her advice to leaders in an oil business in crisis.

- Leaders in the oil business have to motivate their employees and keep a long-term perspective – at the same time as discussing short-term workforce reductions and cost cuts. It is a difficult situation to be in, Solheim says.

After completing a PhD in Clinical Psychology, and working for, amongst others, the UK’s Ministry of Defence, she started working for Statoil in 2009.

There she worked with leadership development and established a corporate university, before later joining Petoro in 2014.

Now, she has launched her own company Progressing Minds, which offers advice and training for leaders, both on strategy development and leadership.

- Some people talk about “good” and “bad” leaders, but for me, there is no such thing as “bad” leadership. If you use your influence in a negative way, then you’re simply not leading. You may hold the title of leader, but if your employees are not following you voluntarily, but only because they are paid, then you are not a leader, says Solheim.

In Progressing Minds, which was first founded in 2001, she draws on her experience within psychology, leadership and business. Now Solheim offers four key pieces of advice for today’s leaders in the oil business.

1. Realize that this is a new reality

- It is important not to think about the low oil price as a short-term crisis. Many leaders and companies in such situations enter into acute crisis mode, looking for short -term solutions, cutting costs you later see as unnecessary.

Solheim believes that many companies remain in that short-term phase for too long, and remove costs that would be valuable in the long run.

- If we believe that this is a temporary crisis, the risk is that in time, there will be return to the same poor practices that exacerbated the crisis to start with. But if we move away from a crisis attitude to adjusting to the new reality, companies will work in new and more efficient ways even if the oil price rises again, says Solheim.

She underlines that companies who recovered well from the financial crisis in 2008 were those who also managed to engage their employees and were open to new ideas. We can learn from those experiences, Solheim believes.

2. Involve your employees

This is an opportunity to sharpen the business’ competitive edge. Companies can change the rules, reshape parts of the business, and redefine what they do. At the same time what is core and is actually working should be preserved. And you really need to involve your employees, as they are the ones who really know your business. They are your business, says Solheim.

When she started working for Petoro two years ago, developing the business strategy with the management team, it was important to include employees in the process. We were open, conducted workshops and worked on building a bridge between strategy and employees.

- Of most importance was that employees felt ownership to the strategy and felt thereby a part of the company. One has to be open about the challenges but at the same time communicate a clear idea about your own strategy, how you will get beyond the crisis. That builds trust, she says.

- During her time in Statoil, Solheim was the founder and leader for Statoil’s own university LEAP, which offered internal training and development across all technical and leadership skills. When the university needed to reduce costs by 40% they asked the trainers to take a lead in advising how.

- We asked them to find ways in which the training they offered could be delivered more efficiently. We looked to other companies, also outside the oil and gas industry, for inspiration. Leaders cannot solve all challenges alone. By involving employees across the organisation, in helping to find solutions, a sustainable leadership culture prevails, she says.

And such a culture is about more than just saving money. Learning from others mistakes and successes is essential.

- The oil and gas industry is not the first to face such a crisis, and it won’t be the last. There is a wealth of expertise and experience to learn from out there, says Solheim

3. Develop sustainable habits

In April, Tord Lien, Norway’s Minister for Petroleum and Energy, highlighted the 60 varieties of yellow paint “that only the fish see” which are used today on the Norwegian Continental Shelf , as examples of the many surplus habits that drive cost and could easily be cut. Solheim also believes that the industry has established some routines that are unnecessary in production of the final product.

- In good times, those types of costs are not attended to. However, if those costs were impacting you personally and you saw it as: “This is my money”, then the type of yellow paint is not important, says Solheim.

She believes for instance that standardising techology is a way of lowering costs in the industry.

In general in the industry, we see a good deal of custom-made technology that drives prices up. Standardising technology is an enormous opportunity for cost efficiency, but operators need to be better at asking for standardized solutions, and suppliers better at offering them.

4. Take risks!

- Right now, risk is something companies perhaps think that they shouldn’t take, but this is not a time to be conservative or inflexible! In an uncertain time in the industry, it is necessary to improvise and experiment with how to do things differently, Solheim Says.

She underlines that this is not about asking companies to take large strategic or safety related risks, but rather to think anew, beyond what has been before and then set such goals for the whole organisation.

- It is a natural reaction to find security in what you know when times are tough. But that is not what is needed, Solheim says.

She refers to Aker as an example of a company that has begun to diversify, and enter into business areas other than oil and gas.

- It is a survival strategy. They need to make money, and their technology can be used in other industries. For me that’s smart innovation.

A privilege

Solheim says that she has met both naturally talented leaders, and those who perhaps should not have been leaders. For her there is one quality that is particularly important: Humility.

- Leadership is a privilege. If you treat the role as such, you behave in a different way than if you feel entitled to it. And then you’ll notice others will follow you, not because they have to but because they want to.