Managing Change: Out With The Old (Ways, Workers), In With The …?

OKLAHOMA CITY—Take a look at the American Petroleum Institute’s (API) slick “Power Past Impossible” video to see how civilization’s rapid progress is fueled by the oil and gas industry. The world relies on energy to develop technology and solve problems. We are the world’s go-to industry. We are so, so cool.

Then why does this industry rely on an antiquated system of sending somebody in a white truck out to a lonely facility on the plains not simply to fix what’s not working, but just to figure out what’s not working? And why can’t the industry resolve its most profound existential threat: the inability to attract a new generation of talent to replace the aging generation on the cusp of retirement?

“Between 40% and 60% of our aging employees will retire in the next five years,” said Mark Sutton, president and CEO of the GPA Midstream Association, as he led off the DUG Midcontinent Conference’s midstream technical forum on Nov. 13. “That’s significant.”

And it’s not just the employees who are old. In the following session, Tauna Rignall of DCP Midstream LP (NYSE: DCP) addressed issues of old work processes. In 2015, in the midst of the most recent downcycle, her company started asking some tough questions.

“Our leadership really looked at this and said, ‘we’ve changed all of our lives with technology,’” said Rignall, director of operations for DCP’s integrated collaboration center. “We do our business from our phones—15 years ago that just wasn’t a thing. Yet we are running our business back in the stone age, per se.”

A small group composed of representatives of various company functions—technology, human resources, finance, operations—set out to find answers. They talked to people at Google, Facebook, Uber and in the downstream and utility sectors. They submitted a plan to management and management agreed to fund it with $25 million—with the caveat that the plan would pay for itself through savings in a single year.

In 2017, the team introduced the Imagine DCP platform to the company’s workforce and encouraged employees to use it to submit ideas on what the company needed to do so that they could do their jobs better.

“Who better to know how to work a field differently than a field operator?” Rignall said. “Who better to know what kind of technology is out there than the people doing business every day, talking with vendors every day?”

But convincing folks to engage was in itself a challenge.

“Technology is easy,” said Rignall, who supervised operations for three gas plants in the Denver-Julesberg (D-J) Basin before taking on her present role. “We can overlay new platforms on something, we can overlay applications on something. But getting people to buy in, getting people to get on board, getting people to want to change … change is really hard.”

DCP turned to social media to connect its workforce. A Facebook product, Workplace, allowed employees to share data and information with other members of their group and avoid unwieldy email chains.

But when DCP focused on giving its workers access to information, it was also addressing a universal problem in the industry.

“Keep the industry veterans as long as it is feasible to help train these new employees,” Sutton advised. “The company needs to keep track of its best practices that were developed by its own industry veterans on staff and make sure the knowledge is transferred down to these employees.”

The trade association is not sitting by passively. GPA Midstream committees are intent on developing develop and maintaining technical standards and practices that reflect industry needs going into the future, Sutton said.

The association provides education and training to more than 2,000 industry professionals at its annual convention, and publishes the most relevant physical data through its cooperative research program.

GPA Midstream also works with educational institutions such as Oklahoma State University and the University of Tulsa to funnel engineering and business school graduates into the industry.

Managing change—whether a massive overhaul of the workforce or a massive overhaul of internal processes to accomplish the work—might seem an insurmountable challenge for an industry that is huge and moves slowly. Then again, that same industry also powered past impossible by figuring out how to get oil out of shale rock.

Oh, and that investment in the change plan from DCP Midstream’s management?

“We did make full payback in one year,” Rignall said. “We did make $25 million in one year.”

Joseph Markman can be reached at jmarkman@hartenergy.com or @JHMarkman.