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Your Biggest Asset and Challenge

Fast Company articleA client of mine discovered how difficult it can be
to cut through the mindset that prevents inflection points. Yet, as you
will see, turning a potential negative into a positive inflection point
can be done.

I had been hired to work with a large oil and gas operation in the
Americas to determine the value of new technology that had been
mandated by headquarters (outside the country). This was the 2000s and
every major exploration and production company was putting technology
down hole, deep in the ground, to better monitor and model what could
be extracted.

The technology was a major innovation, a breakthrough in how oil and
gas was identified and existing oil wells and gas fields were optimized
for production. Further, this breakthrough was generating a global
inflection point. As underground digital technology became available
around the world, oil and gas operations that adopted it gained a
financial edge – my client’s competitors among them.

Yet some of the folks in the Americas remained unconvinced of the
utility, and as the top-producing division of the company’s global
operations, their resistance was significant. If they denied the
inflection point, not only would they lose the value of the innovation
at the cash register, they could stall the enterprise’s progress around
the world putting them at a major disadvantage in the industry.

Fast Company articleOn the other hand, if they saw the inflection point
and jumped on it, the new technology had the power to propel
significant increases in the amount of oil and gas they retrieved from
existing wells and fields, with great impact for the financial success
of the entire enterprise, propelling them forward as a global leader.
The inflection point had been identified at headquarters, but the folks
in the Americas did not see it yet. To them, it seemed like just
another mandate from above.

Everything came to a head in a meeting I called, bringing the two
groups together. We assembled in New Orleans. Major players were
present. The first two hours were civil even though it was clear that
there was a rift. Slowly the two sides engaged and argued until finally
we reached a point where the tension was palpable.

I thought the guy from the Gulf of Mexico was going to jump out of his
chair and throttle the analyst from head quarters. “You expect me to
believe those numbers? I don’t trust those numbers and I don’t trust
you because you gave me those numbers. There is no way in hell that you
can tell me you know what this technology will do. There are just too
many variables at play. Is that what you believe? I mean do you believe
these numbers?”

The room was dead quiet. Everyone waited to see what the analyst from
headquarters would say.
It had been two years since headquarters had mandated the new
technology that could produce exceptional results. But, it had been
announced with flashy brochures loaded with propaganda and
unsubstantiated claims. The guys in the Gulf didn’t like it then and
they didn’t like it now. They had reluctantly agreed to do a pilot but
made damn sure the rig they tested it on would demonstrate the new
technology’s utter lack of utility. I had seen that before.

Sure enough, their trial proved the technology was not cost justified
on that oil platform. Then Katrina hit. The whole issue was shelved,
pushed to the back burner for well over a year while other more
pressing decisions were made, and while New Orleans began to recover.

But headquarters overseas did not forget. They believed in the
technology. It was already up and running in Africa. Indonesia and the
North Sea were testing it on platforms where it would do well. But the
Gulf of Mexico still rejected the mandate. This was the single most
profitable region and they were not about to be told how to run their
business. They had clout because they generated so much profit. But was
it worth maintaining their independence, if it meant missing the
inflection point that could carry them forward or leave them behind?

The analyst from headquarters caved. “You are right. We cannot say this
technology is solely responsible for those results.” But, he was quick
to add, “In my gut I just know this is the right thing to do; this is
going to change the whole industry and we have to be there, too!” The
guy from the Gulf joined him, “You know, I can respect that. Let’s take
a closer look and see what this can do for us.”

What brought them to agreement was the guy from headquarters saying
that he knew in his gut that an inflection point was on them. Down-hole
technology was changing the oil business. With that admission the
polarization broke down and both sides joined each other to figure out
the way forward.

I ended up taking a lead consulting position with the Americas division
as they implemented the new technology. Two years later there was a
futuristic room in the Gulf of Mexico’s main office that looked like
the bridge on Star Trek. But it was not its looks that made it
innovative – it was the value it brought to operations and the
hydrocarbon they took to the bank as a result. This company used the
inflection point created by down-hole technology and rode it to
increase its position as one of the most profitable oil producers in
the world.

Is there an inflection point you or your staff members are fighting? Is
there a new way of working that it is time you embraced? Now is the
time to get on the right side of the change and figure the way forward.

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In March 2013 my next book, Getting Innovation
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