Why Networking is Critical in the Latest Oil and Gas Downturn
The Calgary Stampede two-stepped into town again to try to whoop up an oil industry city that is crying into its beer. Like the frantic circles of a chuck wagon race, energy companies try to survive and look ahead, surrounded by fast-paced challenges. Oil prices at half-mast, climate change mandates and even the soggy wake of forest fires are dampening the spirits of the Canadian oilpatch. But let’s raise our heads from our beer glass and look around us. There is much to learn from other industries that wrestle with massive disruptive changes in their markets.
Chapters Indigo and all other bookstores in the world were changed when Amazon altered the publishing industry forever. Some say they destroyed it. Kodak declared bankruptcy in 2012 because it failed to innovate and adapt to digital imaging. Taxi companies are trying to fend off the disruptive onslaught of companies such as Uber and Lyft. Our iconic publisher JWN is transforming itself to stay connected to and inform its readers in a smart-device and online world. From automakers to banks to entertainment, disruptions for businesses, especially from technology, will continue unabated.
Here in Cow Town, we sit on a well-explored sedimentary basin, 750 kilometres from heavy oil reserves that help give Canada a third-place ribbon in the world’s largest oil reserves list. Yet the constraints of a variety of market conditions have oil and gas producers and the service industry focused on operational efficiency to survive. The innovations that have fuelled the Canadian oil industry thus far, although brilliant, have been largely about the engineering of drilling, extraction, and production of oil and gas. Perhaps more transformational innovation for organizations is now required.
As Kodak failed, its rival Fujifilm survived and is thriving today. How? One of the reasons is its management reacted more quickly to changing technology and customers’ demand for it. It also used, or added in-house expertise to develop, new products and services rather than partnering. And it let go of huge but dying profit streams and created new ones. For example, Fujifilm’s expertise in nanotechnology for laying chemicals onto film was carried over to applying cosmetics to skin. Photosensitive materials shifted to industrial chemicals and they created a medical imaging equipment business. Fujifilm reinvented themselves based on external market changes.
According to a recent study Innovation in Oil & Gas: Canada 2016, conducted by Monitor Deloitte, the need for oil and gas companies to pursue innovation broadly and systematically is greater than ever. The report states, “The industry is at a critical juncture where companies must go beyond merely acknowledging the need to innovate and start executing this imperative in a systematic way or else their long-term survival may be in jeopardy.” The authors go on to say, “Despite this urgency, most respondents indicated they presently do not have the resources, capabilities or leadership commitment to innovate to the degree they know they should.” This sounds frighteningly similar to the Kodak and Fujifilm story. But it’s hard to think outside the box when you’re stuck in one and believe so many forces are beyond your control. Rather like riding a bull.
“Stay home, stay stupid” is a favourite phrase of Dennis McKnight, president of The Innovators Ltd., which is based in Vancouver. McKnight specializes in market research and analyzing market trends for clients. He is also a well-known futurist and speaker who captivates audiences with his big-picture insights and ideas and challenging the way things are. Stay home, stay stupid is a phrase that has really stuck with us for our own business. While we struggled financially with the downturn last year, we invested time and money into strategically transforming our business. We reinvented ourselves. And we didn’t stay home. Whether personal or business trips, we went to the U.K. and four different cities in the U.S. We met different people from different countries and cultures with different life experiences and had interesting conversations with them. We learned a lot about them, and as a result, more about ourselves and how we think. Some courageous business conversations were held, new doors were opened and, we realized, others had to be closed. Opportunity appeared, and this year we came galloping out of the chute with several new customers and bucketloads of work.
The lineups for Starbucks and Tim Hortons may be a little shorter, but we wonder and worry about the average oilpatch coffee conversation. If not exactly weeping into lattes, are these conversations the same old thing? “Jeez this bust is a really tough one, ain’t it? When d’ya think oil prices will break 50 bucks?” Sounds like déjà vu all over again. Feels the same as staying home. Like minds think alike. We enjoy the company of people similar to us. Not staying home does have a literal, geographic meaning, but the real point is to create opportunities for you to think differently. To view the world differently and not through your well-established lens and mindset with all its wonderful intelligence and creativity yet handcuffed by beliefs, assumptions, biases and ways of thinking.
So now is not the time to hide in a barrel like a rodeo clown. Now is the time to get out - network - and find and talk to different people working for different companies with different challenges. Time to ask questions and get their views on the world and how they see it. A time to ask how they are solving problems or seizing opportunities in their industry. They are outside your box, so if you want to think that way, listen to how others are thinking. Network with people with a different perspective than you. Your mind will become more open to sparks of inspiration. Perhaps some as bright as the Stampede fireworks.
Whether you are trying to survive the downturn as a leader in an organization, evolving or reinventing your company, creating new products or services, or have lost your job and are stuck for new prospects, incremental change may not be enough. So don’t stay home.
This article first appeared in JWN Energy's online publication July 14, 2016.