Leadership in the User Community Part IV

Yesterday we discussed the career risks to those that may take the plunge and join the user community in one of the many leadership positions that are open. Today I want to discuss what it is these people will be doing if they do join. And what impact they will have on the oil and gas industry in the mid to long term. It would be my opinion that the work that is being done in People, Ideas & Objects and the user community will be some of the most interesting work that has ever been undertaken in the oil and gas industry. Few opportunities of this scale would come around within the lifetime of an individuals career, if at all. I have stated before this may be a once in a century type of opportunity.

The bureaucracy has been the prevalent form of organization in business since they took over from the merchants in the late 1800’s and early 1900’s. What we are doing with People, Ideas & Objects and the user community is retiring the bureaucracy and replacing it with a new form of organization primarily focused around the Internet. This is the trend that is happening in all industries as the Internet is capable of providing greater efficiency in terms of the management of our organizations. This is the scale of the changes that are being made through the implementation of the Preliminary Specification and the development of the user community.

To participate in this level of revolutionary change. That is on such a scale, is a once in a century type of opportunity. The opportunity to take today’s prototypical producer firm and convert it to the one that operates under the Preliminary Specification and the user community doesn’t exist. The scope of change necessary is beyond what is humanly possible. The forces of inertia from the bureaucracy would need to be fought at every step and our energy would be wasted in such battles. So we chose not to concern ourselves with such battles and instead rely on the forces of creative destruction to make the choice between the performance that the bureaucracy provides, and the solution that we present here with the Preliminary Specification and the user community.

The transition from the bureaucracy to the Preliminary Specification may be as a result of successful producers buying out laggard firms that refuse to change. That is the normal course of change as a result of creative destruction. We don't know and we certainly don’t care. What we are concerned with is that we provide the most profitable means of oil and gas operations. And with the Preliminary Specification we already have a material difference in our value proposition. This will be the focus of the development of the user community and particularly the leadership. One area of our value proposition that we are unable to quantify is the value that we will be able to provide the dynamic, innovative and profitable producer due to the toolset that we implement within the Preliminary Specification. And that toolset currently consists of automation of the business process, specialization and the division of labor. With the configuration of the industry into service providers there is ripe material here for the ability to significantly add more value to the industry.

So it is these topics and areas of focus that will be the domain of the leadership within the user community. Very high level, once in a century type of work that will be something an individual can highlight their career with. The changes we are making are dramatic and will have a material effect on the performance, makeup and manner of how the oil and gas operates for the next 50 to 60 years. Foundational work that is material to how the producer performs, and since our organizations are a critical part of our society, healthy organizations lead to healthy societies which lead to healthy individuals.

The Preliminary Specification provides the oil and gas producer with the most profitable means of oil and gas operations. People, Ideas & Objects Revenue Model specifies the means in which investors can participate in these user defined software developments. Users are welcome to join me here. Together we can begin to meet the future demands for energy. And don't forget to join our network on Twitter @piobiz anyone can contact me at 403-200-2302 or email here. 

Organizations Don't Change, But People Do

In yesterday’s discussion we noted that the bureaucracy was up to its typical actions of trying to put a plan together to deal with the issues in the oil and gas industry. The fact that this plan would violate our copyright was morally and ethically a non-issue to the bureaucrats and that they didn't really have any “plans” to implement the ideas, they just need to have a “plan.” Which are really our plans. Today I want to talk about the fact that bureaucracies and organizations don't change. However, people do. And that is why we are focused on the development of the user community as the alternative organizational means for the oil and gas industry. One in which the individual investors can choose to have their oil and gas assets managed by, as opposed to the current bureaucracy. In essence people, in the user community, being chosen by people, the investors, to manage their assets. Change that is real and leaves the baggage with the bureaucracy.

This is how industries are disintermediated. It used to be the record studio that had all the power in the relationship. Dictating to the artists to produce ten hit songs a year, and the consumer to purchase 10 hit songs a year. Now the artist and the consumer can produce and purchase whatever songs they like. The bureaucracy tells the oil and gas investor that they are the only means in which to have their oil and gas assets managed. And they are correct in that assertion. And therefore have the administrative power to dictate just how that will be done. And if its not profitable, well there never was any guarantee was there.

Now is the time in which we, People, Ideas & Objects, the user community and the service providers. Or as we refer to them here as the user community. Provides the investors with the alternative in how to administer their oil and gas asset. One with the explicit guarantee that we provide the oil and gas producer with the most profitable means of oil and gas operations. Where the investor can dump the bureaucracy and proceed with us as the administrator of their oil and gas assets.

There is no way in which the level of change that is implemented in the Preliminary Specification can be “managed” within an organization. The resistance to such changes would be so strong that we would all die of stress related illnesses. An unpleasant thought, a more unpleasant reality. Particularly unnecessary when creating the environment for the Preliminary Specification, the user community and the service providers would be seen as an opportunity by most of the people that would want to work there. If we built the Preliminary Specification and user community in an environment where we did not have to constrain ourselves with the bureaucracy, it would truly be an enjoyable task. And one whose success would be most assured.

Its the people who can make the transition to this kind of environment quickly and efficiently. Given the opportunity to work for either one of the organizations, the user community or the bureaucracy, I would think most people would take the user community. And that would be the same for the investors. If they understood the impact of the Preliminary Specifications decentralized production model there would be no question as to which method of administration they would take.

Disintermediation of the oil and gas industry is simply a matter of choice then. And since there only exists one choice at the present time. Our first priority must be to organize the alternative for the investors to know and understand, and that is the user community.

The Preliminary Specification provides the oil and gas producer with the most profitable means of oil and gas operations. People, Ideas & Objects Revenue Model specifies the means in which investors can participate in these user defined software developments. Users are welcome to join me here. Together we can begin to meet the future demands for energy. And don't forget to join our network on Twitter @piobiz anyone can contact me at 403-200-2302 or email here. 

Brick by Brick, and Stick by Stick

People, Ideas & Objects have ambitious plans in terms of what we are setting out to do. Using Oracle Fusion Applications with the Preliminary Specification as a vision of what the industry could operate as, and the user community vision providing the means in which it would operate. How is it that this user community is going to develop, and particularly without the help or resources of the industry as it stands today? Well the long and short answer is I don't necessarily know. It hasn't been done before, and what we are setting out to do will have never even been tried before, anywhere. What I do know is that it will be built brick by brick and stick by stick over the next five years, and lead into the time we start the software developments in 2019. Thats the plan.

What I am finding is that there are not a lot of people in oil and gas that are using Twitter. That is both a good thing and a bad thing. I assume they are using Facebook as their social network and the majority of that use would be for personal reasons. For us to use Facebook would therefore interfere with the personal nature of that medium and by using Twitter we are establishing a purpose built network for the user communities needs. Therefore your first step should be to set up a Twitter account and Follow @piobiz as the beginning of this user communities development. Then we can have a means in which we can communicate with other members of the user community and the beginnings of the collaborations can begin. Don't expect too much at first, this is just the beginning, and we have a lot of work ahead.

Our objective is to establish the capabilities necessary to provide the oil and gas producers with the means of organization for the oil and gas industry. If the bureaucracy was to fail completely in the near future. Or if they just decided they had had enough and quit. Not something to take lightly, that has happened before. Then our capabilities would be something that the industry could turn too to provide a solution the industry found itself in. And in turn would find a group of like minded people committed to providing the oil and gas producer with the most profitable means of oil and gas operations. Complete with a technological base in Oracle, and a product vision in the Preliminary Specification. This is what I think it will take in order to make the change away from the current muddling along strategy and the mindless, self-centered bureaucracy.

The need for change in the oil and gas industry has been evident for many years. And it hasn't happened. Low natural gas prices are not even seen as an issue by the bureaucracy. They certainly have no plans to deal with any of the problems that the industry is facing. And technology is used in its most basic and elementary way. I have been an outcast for over ten years now since I published the idea of using the Joint Operating Committee as the key organizational construct of the innovative producer. Plenty of time for industry to have acted positively. But they never will as it eliminates the bureaucracy as its key side effect. That and we use the Internet which also reduces the demand for the bureaucracy. Two good reasons that the bureaucrats will never fund these developments. They will either fail, as a result of their inability to deal with the speed and complexity of the business, or they will quit through attrition, retirement or greener pastures. They are more dangerous than useful at this point in time.

And that is why we need to organize ourselves now. To ensure that the industry will be able to continue to function. This all sounds quite surreal and probably a bit on the crazy side of the scale. I however would prefer we had a solution available for the marketplace to pick up when the bureaucracy does decide to take that permanent vacation.

The Preliminary Specification provides the oil and gas producer with the most profitable means of oil and gas operations. People, Ideas & Objects Revenue Model specifies the means in which investors can participate in these user defined software developments. Users are welcome to join me here. Together we can begin to meet the future demands for energy. And don't forget to join our network on Twitter @piobiz anyone can contact me at 403-200-2302 or email here. 

Modularity in Software and Organizational Design

Among the many areas of research that went into the Preliminary Specification is Professor Richard Langlois’ modularity. Modularity builds on the boundaries between the firm and markets and is the reason that the Preliminary Specification has eleven modules. The primary advantage gained by using modularity is the ability to manage change. By isolating the impact of any change to one module, the impact of the changes are manageable.

Modularity is a very general set of principles for managing complexity. By breaking up a complex system into discrete pieces - which can then communicate with one another only through standardized interfaces within a standardized architecture - one can eliminate what would otherwise be an unmanageable spaghetti tangle of systemic interconnections. p. 1

People, Ideas & Objects impact is beyond just the software that is proposed to be developed. Organizations such as the producer firm, the Joint Operating Committee and the service industries participants are all impacted as a result of the modules in the Preliminary Specification. Dynamic change within each area is a desired characteristic that is necessary for the innovative oil and gas industry.

What is new is the application of the idea of modularity not only to technological design but also to organizational design. Sanchez and Mahoney (1996) go so far as to assert that modularity in the design of products leads to - or at least ought to lead to modularity in the design of the organizations that produce such products. p. 1

and

Why are some (modular) social units governed by the architecture of the organization and some governed by the larger architecture of the market? p. 2

It is in the Revenue Model that People, Ideas & Objects assert that our software developments are not just for the oil and gas producers. They are for individuals, society, and the service industry as well. To focus only on the producers misses some of the “who” we are developing these systems for.

The set of design rules that guide social interaction are what we can generally call social institutions (Langlois 1986). These rules determine (among other things) the extent to which, and the way in which a society is a modular system. The desirability of modular design is a theme with a long history in the theory of social institutions. Adam Smith long ago proposed a decentralization scheme based on what he called "the obvious and simple system of natural liberty," by which he meant a system of private property regulated by common law and subject to minimal central administrative intervention. On the economic level, this approach would lead, he believed, to economic growth spurred by innovation, learning, and an ever increasing division of labor. pp. 14 - 15

and

if we can agree that the economic problem of society is mainly one of rapid adaptation to changes in the particular circumstances of time and place," he wrote, "it would seem to follow that the ultimate decisions must be left to the people who are familiar with these circumstances, who know directly of the relevant changes and of the resources immediately available to meet them. We cannot expect that this problem will be solved by first communicating all this knowledge to a central board which, after integrating all knowledge, issues its order. We must solve it by some form of decentralization" (Hayek 1945, p. 524). p. 15

Change is the one constant throughout the Preliminary Specification. Modularity in the software, and the organizational design of the oil & gas, and service industries is a means in which to deal with change. By moving the compliance and governance frameworks of the hierarchy into alignment with the legal, financial, operational decision making, cultural, communication, innovation and strategic frameworks of the Joint Operating Committee. We set in place significant levels of change where producers, service industry providers and individuals all move closer to the cultural, or natural way of the oil and gas industry. Around the Joint Operating Committee. Adopting modularity within our software and our organizational structures will provide us with the appropriate architecture to deal with change.

The Preliminary Specification provides the oil and gas investor with the business model for profitable exploration and production. People, Ideas & Objects Revenue Model specifies the means in which investors can participate in these user defined software developments. Users are welcome to join me here. Together we can begin to meet the future demands for energy.

McKinsey, On Organizational Health

It’s the weekend, which means its time for some McKinsey content. Today’s post provides some discussion around the topic of organizational health in a paper entitled “Organizational Health: The Ultimate Competitive Advantage.” This paper comes with a short video presentation by the authors and is a summary of their upcoming book. The substance of their work is captured well in this following quote.

Organizational health is about adapting to the present and shaping the future faster and better than the competition. Healthy organizations don’t merely learn to adjust themselves to their current context or to challenges that lie just ahead; they create a capacity to learn and keep changing over time. This, we believe, is where ultimate competitive advantage lies.

I particularly liked the five frames in which the authors used to define the state at which organizations passed through. The Aspire, Assess, Architect, Act and Advance frames accurately capture the long road ahead for us. Looking critically at their chart we could best claim to “Aspire” at this time at People, Ideas & Objects.

This would also leave us looking to perform the next frame which would be to “Assess”. And it is here that we have much to be desired. The oil and gas industry is in no condition to address the markets demands for energy. Its output has been stagnant since 2005 and the sense of urgency to address the problem does not exist.

If not for the global recession, the demand for energy would far outstrip supply and the producers would be scrambling in a very tight market. Nonetheless, I think that day is still ahead of us, and soon. Before we can approach those levels of energy demand we will need to organize ourselves first. That organization begins here at People, Ideas & Objects with building the systems that identify and support the Joint Operating Committee, the key organizational construct of the innovative oil and gas producer.

Building the Preliminary Specification is the focus of People, Ideas & Objects. Producers are encouraged to contact me in order to support our Revenue Model and begin their participation in these communities. Those individuals that are interested in joining People, Ideas & Objects can join me here and begin building the software necessary for the successful and innovative oil and gas industry.

Please note what Google+ provides us is the opportunity to prove that People, Ideas & Objects are committed to developing this community. That this is user developed software, not change that is driven from the top down. Join me on the People, Ideas & Objects Google+ Circle and begin building the community for the development of the Preliminary Specification. Email me here if you need an invite.

McKinsey, Preparing Your Organization For Growth

With the increasing demands in the oil and gas industry of more engineering and earth science effort in each barrel of oil produced. And the marketplaces demands for “more” makes the challenges faced by the industry far more complex then what has been faced in the past. Just standing still requires the producer to attain more capabilities. How does a producer prepare for growth?

In this McKinsey article the authors discuss three “pain points” experienced by three organizations. Although none of the three organizations mentioned are in the oil and gas industry, it is important to think ahead as to what we will face in terms of how the industry will need to change and grow.

For the industry to successfully provide for the consumers energy demands, it’s necessary to build the systems that identify and support the Joint Operating Committee. Building the Preliminary Specification is the focus of People, Ideas & Objects. Producers are encouraged to contact me in order to support our Revenue Model and begin their participation in these communities. Those individuals that are interested in joining People, Ideas & Objects can join me here and begin building the software necessary for the successful and innovative oil and gas industry.

Please note what Google+ provides us is the opportunity to prove that People, Ideas & Objects are committed to developing this community. That this is user developed software, not change that is driven from the top down. Join me on the People, Ideas & Objects Google+ Circle and begin building the community for the development of the Preliminary Specification. Email me here if you need an invite.

Comments From Shell's CEO Peter Voser

The Financial Times were reporting on Shell’s quarterly earnings which were robust to say the least. They noted a comment from Shell’s CEO Peter Voser that I found resonates with the work that we are doing here at People, Ideas and Objects.

The time of low-cost oil and gas is at an end and the world is entering a stage where finding resources will be more “complex” and require more money and investment, according to the head of Europe’s biggest oil company. 

Peter Voser, chief executive of Royal Dutch Shell, said the longer-term trend was for higher costs. “In the longer-term, you will clearly need higher oil and gas prices, or energy prices.”

I believe the transition from the low cost era to this new “complex” era is a fundamental change in the oil and gas business. One that requires we reorganize to focus our efforts on the difficult aspects of finding and producing oil and gas. This change demands that we look at the business and determine the best way in which to organize it for this new challenge. To suggest that the ways and means that provided profitable operations during the low cost era will serve us during the complex era is incorrect.

People, Ideas & Objects suggests we build the systems that identify and support the industry standard Joint Operating Committee. By doing so we are able to align the hierarchies compliance and governance frameworks with the legal, financial, operational decision making, cultural, communication, innovation and strategic frameworks of the Joint Operating Committee. This alignment provides an enhanced speed, accountability and innovativeness that is necessary in this new “complex” oil and gas era.

Building the Preliminary Specification is the focus of People, Ideas & Objects. Producers are encouraged to contact me in order to support our Revenue Model and begin their participation in these communities. Those individuals that are interested in joining People, Ideas & Objects can join me here and begin building the software necessary for the successful and innovative oil and gas industry.

Please note what Google+ provides us is the opportunity to prove that People, Ideas & Objects are committed to developing this community. That this is user developed software, not change that is driven from the top down. Join me on the People, Ideas & Objects Google+ Circle and begin building the community for the development of the Preliminary Specification. Email me here if you need an invite.

Organizational and Change Management Resources

Today we have two articles that focus on the topic of change management and organizational change. The first article presents the results from a survey from McKinsey and is entitled “Taking organizational redesigns from plan to practice: McKinsey Global Survey results”

Organizations often redesign themselves to unlock latent value. They typically pay a great deal of attention to the form of the new design, but in our experience, much less to actually making the plan happen—even though only a successfully implemented redesign generates value. A recent McKinsey survey examines the reasons executives cite for successful and unsuccessful implementations, and in doing so, offers one set of explanations for why organizational transformations so rarely succeed. This survey asked why organizations redesigned, what challenges they faced, what tactics they used for implementation, and how the redesign and its delivery affected employee morale and shareholder value.

The second article is from Booz & Co. Strategy + Business and is entitled “Making Change Happen, and Making It Stick”

Few organizations have escaped the need for major change in the past decade, as new technologies and global crises have reshaped entire industries. However, the fact that change has become more frequent does not make such changes any easier.

As we noted this past week, People, Ideas & Objects are not change agents but solutions providers. These documents provide industry with a hint of the organizational and change management resources that are available.

It is now time for producers to act. Review of our Revenue Model will inform producers how they can participate in the development of People, Ideas & Objects Preliminary Specification. Producers can contact me here for further information, or to begin the process of their participation.

Solution Providers, not Change Agents

In our post yesterday we noted that change was what ultimately generated our revenues, and that is the case. However, that does not mean that People, Ideas & Objects are the change agent in the energy industry. Nothing could be further from the role that we will be assuming. For People, Ideas & Objects to be successful, we need to be the solution provider for the changes that industry implements. There is not enough energy in the universe for a third party to exercise change within the oil and gas industry and we will not be the ones to fall within the belief that we could exercise that change.

It is now time for producers to act. Review of our Revenue Model will inform producers how they can participate in the development of People, Ideas & Objects Preliminary Specification. Producers can contact me here for further information, or to begin the process of their participation.

Constraints and Opportunities

Yesterday’s post noted that the start-up software developer, as well as the established SAP and other software vendors, need to provide a comprehensive and compelling vision of how they propose to resolve the issues that producers face in the oil and gas industry. And that only People, Ideas & Objects have provided a comprehensive and compelling vision with the publication of the Draft Specification and the supporting documentation contained within this blog. People, Ideas & Objects vision is an opportunity for the oil and gas producer community to approach resolving its issues in an unconstrained manner.

We have talked about some of the constraints that are inherent in the software business on this blog before. And today I want to reiterate the two that are the greatest impediment to change in the software offering provided by the software vendor. Those two constraints are the software vendors customers and the software code itself. These are the two main causes of failure for most software companies in meeting the needs of their software users.

Simply, changes to the software code are the greatest costs to the software vendor and do not generate any unique revenue streams. Therefore changes are resisted by the software vendor; propagating any of these software changes to the population of customers and users escalates the costs of any change. Is it any wonder that these applications have remained static for all those years.

These and other forces have cemented the existing “established” software vendors offerings in concrete. An innovative oil and gas producer, as documented here in this blog, needs to have the agility in decision making processes and follow through with the appropriate processes that support innovation. These begin with the appropriate organizational structure supported by a dedicated software development capability.

By employing cloud computing and a cost plus software development model People, Ideas & Objects are structured to support the changes in the producer. We are motivated by change, designed to change, accommodate change, and change ultimately generates our revenues. Providing a change oriented software development capability is the purpose behind People, Ideas & Objects.

It is now time for producers to act. Review of our Revenue Model will inform producers how they can participate in the development of People, Ideas & Objects Preliminary Specification. Producers can contact me here for further information, or to begin the process of their participation.

McKinsey, The Psychology of Change Management

McKinsey, once again, have published an article that provides real value and discussion to the work we are doing here at People, Ideas & Objects. Change is a difficult process to manage. This article discusses the psychology around change management within organizations, and therefore is relevant, but I want to mention a few aspects of People, Ideas & Objects unique perspective before we review this paper.

There are two types of changes that affect organizations. The first type of change is to steer the ship in a new direction, one that is believed to be the better choice for all concerned. The second type of change is the type that is forced upon an organization by events that are beyond the control of anyone. People, Ideas & Objects is oriented to the second type of change. One that addresses the scope of the forces of change that are being exercised on the oil and producer.

The forces of change that are currently being asserted on the oil and gas producers are significant. The change in oil and gas prices affects all aspects of a producer firm. At the same time the volume of engineering and earth science effort per barrel of oil continues on a steep upward trajectory. A third major change that is occurring is what I would call the maturation of the Information Technologies (IT), bringing new and innovative ways of doing business. These are of the type of changes that are seen once a century. Fundamental changes that have the power to re-configure the makeup of an industry.

To accommodate the changes that are acting against the producer firm, People, Ideas & Objects prescription is to align the producers internal processes. By simply moving the compliance and governance frameworks to be in alignment with the Joint Operating Committee’s legal, financial, operational decision making, cultural and communications frameworks. Our research has shown that this alignment increases innovativeness and accountability, to name just two of the key benefits.

Alternatively, left unaddressed, these changes will soon cause producers to outspend their revenue streams. These losses will also exercise the type of change that is needed within the producer firm and the oil and gas industry. Producers therefore need to choose to ride these forces or continue to resist them. Either way that these changes are made, People, Ideas & Objects will provide the systems and applications that provide the innovative oil and gas producer with the most profitable means of oil and gas operations.

Our claim to be the most profitable means of oil and gas operations is a bold statement. And we assert that this is provided through our value proposition and the enhanced division of labor the software will identify and support. By allocating the one time development costs across the producer base, the costs of software development will fall to a small percentage of what firms have traditionally paid for ERP systems.

With respect to the second component of our claim to being the most profitable means of oil and gas operations. For any industry to increase its economic output demands that an enhanced division of labor be used. This economic theory has been proven time and again over the last few hundred years. We now live in times where to expand on the current division of labor and specialization requires that advanced Information Technologies be employed to identify and support them. People, Ideas & Objects is configured to develop the software that will provide these to the producer firm. This is our fundamental competitive advantage.

McKinsey’s discussion on change is of the first type, or deliberate change an organization undertakes. Nonetheless it provides us with some valuable information regarding change in general.

Over the past 15 or so years, programs to improve corporate organizational performance have become increasingly common. Yet they are notoriously difficult to carry out. Success depends on persuading hundreds or thousands of groups and individuals to change the way they work, a transformation people will accept only if they can be persuaded to think differently about their jobs. In effect, CEOs must alter the mind-sets of their employees—no easy task.

People, Ideas & Objects have presented a workable vision of how the innovative oil and gas producer would operate. This vision is represented in the Draft Specification. People can then see the effect of working in that environment and adjust their actions to fulfill that vision and enable the innovative oil and gas producer.

But what if the only way a business can reach its higher performance goals is to change the way its people behave across the board? Suppose that it can become more competitive only by changing its culture fundamentally—from being reactive to proactive, hierarchical to collegial, or introspective to externally focused, for instance. Since the collective culture of an organization, strictly speaking, is an aggregate of what is common to all of its group and individual mind-sets, such a transformation entails changing the minds of hundreds or thousands of people. This is the third and deepest level: cultural change.

With the benefits of people having this vision in mind. And using the Joint Operating Committee as the key organizational construct of the innovative producer, people will be able to think differently about their work.

Employees will alter their mind-sets only if they see the point of the change and agree with it—at least enough to give it a try. The surrounding structures (reward and recognition systems, for example) must be in tune with the new behavior. Employees must have the skills to do what it requires. Finally, they must see people they respect modeling it actively. Each of these conditions is realized independently; together they add up to a way of changing the behavior of people in organizations by changing attitudes about what can and should happen at work.

In this next quote McKinsey note that cognitive dissonance will affect the people who believe in our purpose. I can only suggest that those people begin the process of joining People, Ideas & Objects or the Community of Independent Service Providers.

The implication of this finding for an organization is that if its people believe in its overall purpose, they will be happy to change their individual behavior to serve that purpose—indeed, they will suffer from cognitive dissonance if they don’t. But to feel comfortable about change and to carry it out with enthusiasm, people must understand the role of their actions in the unfolding drama of the company’s fortunes and believe that it is worthwhile for them to play a part. It isn’t enough to tell employees that they will have to do things differently. Anyone leading a major change program must take the time to think through its "story"—what makes it worth undertaking—and to explain that story to all of the people involved in making change happen, so that their contributions make sense to them as individuals.

For the industry to successfully provide for the consumers energy demands, it’s necessary to build the systems that identify and support the Joint Operating Committee. Building the Preliminary Specification is the focus of People, Ideas & Objects. Producers are encouraged to contact me in order to support our Revenue Model and begin their participation in these communities. Those individuals that are interested in joining People, Ideas & Objects can join me here and begin building the software necessary for the successful and innovative oil and gas industry.

Technorati Tags: People's McKinsey Call-to-action Change Management Leadership Vision

S + B, Big Oil and the Natural Gas Bonanza

Booz & Co’s periodical Strategy + Business have published a paper that asks the question;

The oil majors hope to make major money in natural gas, but can they learn to operate two distinct types of businesses under one roof?

Noting that unconventional gas requires a different business model that may not be served by the conventional methods of the industry.

The unexpected revival of natural gas is quietly precipitating a fundamental shift in the oil and gas industry — a shift that few companies were prepared for but that may determine the industry’s overall future makeup. It pits the major oil companies against the independents, which have plied the unconventional reservoirs doggedly over the last seven to 10 years. And it raises questions about whether the oil giants can become big players in this new unconventional gas business. To do so, they will have to develop dual operating models under one roof — one, a traditional high-risk, corporate-led exploration model, and the other, a nimble, efficient, and decentralized operation. In other industries (notably airlines), such two-headed strategies have generally failed.

Change is certainly in the air. Oil and gas prices are probably one of the best measures of the level of change in the oil and gas industry. It is pleasant to see Strategy + Business’ analysis providing confirmation to many of the things that we have stated here. This critique is to ensure the innovative producers remain successful.

In order to compete in unconventional assets, oil majors will have to embrace a dual operating model — in essence, pairing traditional operations with separate and more agile business units modeled after the independent gas firms, with flatter organizations, simpler governance structures, and an emphasis on efficiency and innovation. These attributes are necessary to reduce operating costs, as well as to allow the firms to quickly adapt new well designs, source local contractors and materials, and secure labor as needed.

What concerns me is the nature of the oil and gas industry towards new ideas. There is a culture of how management will not support new ideas, which includes this software development project. I have attributed this to the 1980’s and 1990’s survival strategies that were a necessity in oil and gas. Times have changed and its time for the management to realize they have to act. S + B note.

Above all, management will need to ensure that existing processes and structures do not discount these fresh ideas because of a “not invented here” bias. If a joint venture is part of this approach, the company will need to develop a plan that allows it to learn from the arrangement, by creating formal and informal governance mechanisms to promote the transfer and dissemination of knowledge.

I am under no illusions at the scope of change that we are introducing in this project. Using the Joint Operating Committee as the key organizational construct of the innovative producer will be necessary at some point in the very near future. An idea that resonates with those in the business as something we should have been doing all along. By delaying this project, one in which we have many years of work ahead of us, I believe is dangerous.

If designed and managed appropriately, either strategy could be successful, but history suggests that most of the oil giants will struggle to make dual operating models coexist. Though it may not seem obvious today, many of these companies are likely to find that the technical hurdles of unconventional reserves are relatively minor. Far tougher — and ultimately out of reach for some — will be the challenge of changing behavior and culture. 

For the industry to successfully provide for the consumers energy demands, it’s necessary to build the systems that identify and support the Joint Operating Committee. Building the Preliminary Specification is the focus of People, Ideas & Objects. Producers are encouraged to contact me in order to support our Revenue Model and begin their participation in these communities. Those individuals that are interested in joining People, Ideas & Objects can join me here and begin building the software necessary for the successful and innovative oil and gas industry.

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Military Command & Control Metaphor - Innovative?

Last week in research question # 1 we asked if the hierarchy’s value had expired. Suggesting that elimination of the hierarchy would require an alternative governance framework to replace the tried and true hierarchy. Recall that the alternative framework we developed in the Draft Specification is what we call the Military Command & Control Metaphor (MCCM). It might seem a contradiction to suggest that the military chain of command enables innovation at the producer level. The military is known for its strict adherence to command and control, how is this going to assist the innovative producer? And isn’t the use of the MCCM going to cause the Joint Operating Committee to be less responsive as a result?

First is the fact that the strict level of adherence is a reflection of the command and control that is implemented. We are attempting to impose an organizational structure on to the various members of the producer firms that have been seconded to the specific Joint Operating Committee. These resources are being sourced from a multitude of organizations, they also continue to have responsibilities to the individual producer that they represent. Therefore imposing this structure allows them to interact, respecting the equivalent military chain of command used, in a manner that is expected of them in both the JOC and at the producer firm that employs them.

Second is the innovative footing that we are striving to provide to both the producer and the JOC. This innovative footing seems counter to the military command and control expectations. Victor Davis Hanson is a well known military historian. In this video at around the 33:00 minute mark, he makes the interesting comment noted just below the video.

I still can’t believe as a military historian that we came up with the idea that a flying fortress was going to go over daylight at about 200 miles an hour and supposedly at 30,000 feet knock out the strategic capability of Germany. And depend on a few 50 calibre machine guns to save this lumbering plane that had as few as nine crew members and they were going to be fighting against the finest fighter pilots in the world in ME-109’s and they think they can pull it off when the British had tried it and had already assumed that it was impossible. And we did that of course and we lost 25,000 Americans, six times more then in the Iraq war, on that flawed concept. But that's the nature of war, live and learn. And out of that we learned what. You could stack formations to increase fire power. You could create drop tanks and have Thunderbolts and Mustangs escort them. You could use radio signals, you could use chafe. And by that trial and error counter response, response, counter response by 1945 the B-17’s were taking a lethal toll on German society and industry. And that is what usually happens in war.

And at 1:01 minutes, based on his experiences Professor Hanson states;

There is more free speech in the military then there is in a university campus.

In this example I see two characteristics at play. The first is the ability of the higher command to maintain the focus on a difficult and costly job for the long term. Secondly, the ability to innovate in the use of the resources to achieve the long term goal, success in its mission. Compare this, or any other military operation, against the capabilities of the hierarchy and I think we can see the use of the Military Command & Control Metaphor will enhance the JOC’s and producers that use, prospectively, People, Ideas & Objects software applications.

For the industry to successfully provide for the consumers energy demands, it’s necessary to build the systems that identify and support the Joint Operating Committee. Building the Preliminary Specification is the focus of People, Ideas & Objects. Producers are encouraged to contact me in order to support our Revenue Model and begin their participation in these communities. Those individuals that are interested in joining People, Ideas & Objects can join me here and begin building the software necessary for the successful and innovative oil and gas industry.

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Some Advantages of the JOC

Last week we began a comprehensive review of People, Ideas & Objects research and systems development. This review is focused around using the Joint Operating Committee (JOC) as the key organizational construct of the innovative oil and gas producer. It also appears, based on this blog’s analytics, that many of our readers may have been on vacation. I think this review provides substantial value to all our readers, and particularly for those that may have joined us in the past few years. To aggregate the posts that make up this review, please select the Review label on this blog. Last week we were able to summarize the four research questions that were answered in the Preliminary Research Report. Today’s post deals with the advantages of using the JOC.

The JOC is very much involved in the day to day activities of an oil and gas producer. What is surprising is that the ERP systems that are in use in oil and gas do not recognize the JOC. Not until such time as we develop the Draft Specification will we have the systems that align to the legal, financial, operational decision making, cultural and communication frameworks. All of the current ERP systems have been developed during the pre-Internet era. None of these vendors have approached the oil and gas industry from the point of view of the partnerships represented in the JOC, they only recognize the hierarchy of the individual producer. This prompted our assertion that SAP is the bureaucracy. The Preliminary Research Report noted the advantages of using the JOC are as follows.

• All participants are motivated equally. Financial opportunity drives consensus.

Attaining a consensus when everyone is motivated on the basis of financial incentives is the optimal situation. It is for this reason alone that the JOC provides such strong support for building the systems defined in the Draft Specification. Developing the systems to recognize the decision rights within the JOC will enable the decisions to be made more efficiently and effectively.

Subsequent to the publication of the Draft Specification, and around the time that the iPad was introduced. People, Ideas & Objects asserted that we could use the iPad or other device to have the JOC representatives video conference the meetings. Each representative being in attendance irrespective of when and where they may be. With the software development capability which is a fundamental element of the People, Ideas & Objects offering, these meetings would be supported with automated software that implements the processes and procedures that are decided on by the committee. When the decision was made to re-enter a well to complete another zone, the AFE’s would then be automatically issued and become effective within the system. Fast, high quality decision-making with full implementation of the necessary processes will be the result of producers funding People, Ideas & Objects software developments and Community of Independent Service Providers.

• The JOC is the legal, financial, operational decision making, cultural and communication foundation of the oil and gas industry. All the internal processes tacitly support this fact.

Moving the compliance and governance frameworks from the hierarchy to be in line with the JOC puts all the frameworks of both the producer and the committee into alignment. As decisions are made by the JOC they are implemented in accordance with the strategy, compliance and governance needs of each individual producer. Each producer employs their own strategy based on the unique makeup of their assets. Just because the producer voted for the recompletion of the other zone, does not impute any element of their corporate strategy or financial metrics to any of the other participating producers.

• The participants in the JOC hold significant technical and managerial capabilities.

The people that represent the producer firm in the JOC are usually of broad business experience and educational background. Usually sourced from the earth science and engineering disciplines, their focus is developing the oil and gas assets held within the JOC. In many of the smaller producers it is frequently the president that represents the producer. Building the software that identifies and supports these key individuals is the beginning of making the producer more innovative.

For the industry to successfully provide for the consumers energy demands, it’s necessary to build the systems that identify and support the Joint Operating Committee. Building the Preliminary Specification is the focus of People, Ideas & Objects. Producers are encouraged to contact me in order to support our Revenue Model and begin their participation in these communities. Those individuals that are interested in joining People, Ideas & Objects can join me here and begin building the software necessary for the successful and innovative oil and gas industry.

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Research Question # 4

In our fourth and final installment of the Preliminary Research Report’s research questions. We asked “Does the industry need to change from a “banking” to a “science and engineering” based mindset?”

Much of current infrastructure of the oil and gas industry has been developed during a time when the costs associated with exploration and production were reasonable. A time when the efforts of the producer firm could be quantified by determining a reasonable return on investment in oil and gas. This generated what could be considered to be a “banking” mindset that sought to exploit a resource based on a specific return on investment.

That of course is the reasonable approach that any industry will take to the business at hand. To do anything other then approach the business from the return on investment would be foolhardy. What the question being asked is, will the approach of a guaranteed return on investment be capable of dealing with the complexity of a science based business in a resource constrained environment.

With the earth science and engineering disciplines expanding at a significant pace, where each barrel of oil produced requires progressively more science and engineering. With the supply of scientists available to producers being somewhat fixed. To expect this environment to produce a reasonable return on investment with no change in approach from the “easy” energy era will lead to disappointment.

I think the answer to the question is clear. The industry needs to change in order to meet the markets demand for energy. Since the time the Preliminary Research report was published and today, the world energy production has remained static. At a time when a large percentage of the worlds population is moving towards the middle class, the static or potentially declining world oil production is a serious problem for society. It is therefore reasonable to assume that high commodity prices will be with us for the long term. Prices are the reallocation of financial resources to facilitate innovation. Therefore it is also reasonable that the producers with the most innovative capability will have the highest return on their investments.

But lets be clear, changing the stripes on a Tiger is not easy. As we progress into this review we will see that this level of change may not be able to be managed by the current oil and gas producers. Some times the changes occur from an attrition of the existing firms and replaced by new and innovative producers. Either way, People, Ideas & Objects and our Draft Specification are designed to identify and support the successful innovative oil and gas producers.

For the industry to successfully provide for the consumers energy demands, it’s necessary to build the systems that identify and support the Joint Operating Committee. Building the Preliminary Specification is the focus of People, Ideas & Objects. Producers are encouraged to contact me in order to support our Revenue Model and begin their participation in these communities. Those individuals that are interested in joining People, Ideas & Objects can join me here and begin building the software necessary for the successful and innovative oil and gas industry.

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IBM's Global CEO Survey

IBM has published their bi-annual Global CEO Study. Registration is required to download the .pdf, I recommend reviewing the document to gain an understanding of the state of affairs in the global CEO’s mindset.

Oil and gas producers are faced with a difficult situation. As the earth science and engineering disciplines expand. And the volume of technical effort needed for each barrel of oil increases. The scientific human resources available to the producers remains relatively constant. What’s needed is a new division of labor and specialization to increase the volume of throughput of these fixed human resources. This changing environment is, according to the IBM study, being joined with a new variable, complexity.

Using the Joint Operating Committee (JOC) as the key organizational construct of the innovative oil and gas producer becomes a necessity in this complex environment. The JOC being the legal, financial, cultural, communication and operational decision making framework of the industry can deal with this enhanced complexity. When we are required to work with the needs of multiple producers within each and every JOC. Continuing to use generic ERP systems that don’t identify and support the JOC. Introduces unneeded complexity to an already difficult environment. If industry is to meet the market demands for energy, the Joint Operating Committee will need to be supported and identified by the ERP systems that are defined in the Draft Specification. The IBM Study notes.

In our past three global CEO studies, CEOs consistently said that coping with change was their most pressing challenge. In 2010, our conversations identified a new primary challenge: complexity. CEOs told us they operate in a world that is substantially more volatile, uncertain and complex. Many shared the view that incremental changes are no longer sufficient in a world that is operating in fundamentally different ways. Four primary findings arose from our conversations:

The first of these four findings is complexity and the capacity to deal with that it. IBM’s survey seems remarkably candid about the CEO’s capacity to deal with this new complexity.

Today’s complexity is only expected to rise, and more than half of CEOs doubt their ability to manage it.

Innovation will become the means for value creation in the oil and gas industry. Innovating on the basis of the expanding earth science and engineering disciplines. The industries leadership will be derived from those that are able to operate creatively in this scientific and technical environment.

Creativity is the most important leadership quality, according to CEOs. Standouts practice and encourage experimentation and innovation throughout their organizations. Creative leaders expect to make deeper business model changes to realize their strategies. To succeed, they take more calculated risks, find new ideas, and keep innovating in how they lead and communicate.

Third in the IBM study focuses on the customer, the Draft Specification will enable, closer interactions between the producers, vendors, suppliers and communities involved in the industry. IBM’s survey notes the focus of CEO’s is more towards the customer. Oil and gas producers never see their customers however, an expanded capability to deal with those involved in the business of oil and gas is needed.

The most successful organizations co-create products and services with customers, and integrate customers into core processes. They are adopting new channels to engage and stay in tune with customers. By drawing more insight from the available data, successful CEOs make customer intimacy their number-one priority.

In the fourth finding, IBM focuses on the interactions between partners and suppliers.

Better performers manage complexity on behalf of their organizations, customers and partners. operations and products, and increasing dexterity to change the way they work, access resources and enter markets around the world.

These four conclusions are consistent with the needs of the innovative oil and gas producers. IBM has developed a strong capability in their bi-annual study of CEO’s. I can only assume that personally interviewing 1,500 CEO’s is done at substantial expense. I would question the value that IBM is able to generate from this survey. This paper was published in May 2010 and the volume of discussion that it has generated must be disappointing. I wonder if there will be another report in two years time.

Producers are encouraged to contact me in order to begin their participation in these communities and support our Revenue Model. Those individuals that are interested in joining People, Ideas & Objects can join me here.

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A Quick Break

A quick break from documenting our revenue model to highlight a blog post from our favorite researcher. Professor Richard Langlois’ work has provided a solid foundation for the Draft Specification. In a recent blog post Professor Langlois posted an interesting commentary about the discussion that “might have” taken place at GM in the 1920’s. It’s an entertaining read and is probably based wholly of the facts of the case.

The point of the argument is the change that needs to take place at GM. The “owner” of GM is faced with a new management theory about the role of management in controlling the ways and means of the corporation. “Sloan” who might be Alfred P. Sloan, the CEO of GM during the time that management theory was developed and applied, is interviewed by the owner about these new theories.

We are having this same argument today. Management has ceased to be capable of building value within our organizations. Just as the “owner” of GM had to cede to management, management needs to cede to the market definition. People, Ideas & Objects Draft Specification is the means for management in oil and gas to cede to the marketplace. Professor Langlois’ article is located here.

Society is put in peril when world oil production declines. There is evidence that the world's oil production has declined. Therefore the world needs to have the energy industry expand its production. To do so requires that we reorganize to enhance the division of labor and specialization within the industry. As economic development has proven, reorganization would achieve far greater oil and gas production. Management of the industry is conflicted in expanding the output of the industry. The less they do, the higher the oil and gas prices and the better they appear to perform. This managerial conflict must be addressed and the performance of the industry unleashed. To do so requires the current management of the industry to fund People, Ideas & Objects and build the systems as defined in the Draft Specification. Please join me here.

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Hofmeister on BP's plans

Former Shell Oil Company president has the following comments on Bloomberg today.

It's very important for BP to turn the page so to speak, although they still have the well to put out, and hopefully that will go according to plans over the next couple of weeks. But they have to turn their attention to the future. And part of that future in addition to the asset sales is getting on with what I call the boring bits of business, and that is, under John Browne they did a great job of expanding the portfolio and growing the company. But I don't think they ever integrated the company and turned it into a high performing institution, that takes a lot of time and Tony Hayward saw this and started the process but didn't get far enough. Now I think its time to really get into the structures, processes, systems the procedures so that the whole company operates the same way all over the world. 

Makes at least two people that think the boring bits of business are needed.

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Economics as Astrology

Richard Fernandez is right. Talking about economics in his Belmont Club blog, Fernandez raises many valid points in this recent post. A frequent contributor to Pajamas Media, he is responding to Paul Krugman’s comment that now is the beginning of a Third Depression. Fernandez equates Krugman’s comments to astrologist Madame La Zonga, he has a valid point. When Nobel Prize economists suggest that more spending of borrowed money will save us, it is economic voodoo.

The fact that experts cannot settle on the proper prediction suggests the model they use can give rise to multiple or even contradictory predictions, like a compass needle that spins with alacrity of the second hand of an analog watch. The physicist Frank Tipler says that with a compass like that you should start worrying. He argued that since Nobel Prize economists could manifestly rise only to the level of predictive competence of astrology, they should exhibit the same modesty as Madame La Zonga.

People, Ideas & Objects could be accused of falling for, or prescribing the same economic voodoo. We have relied heavily on the analysis of Professor Carlota Perez in predicting the economic environment that we now find ourselves in. A key difference between Krugman and Perez’ commentary is that Perez is looking at the historical record and suggesting patterns that have occurred before, and that are systemic over time. She is not suggesting a formula for how the future will unfold, only that in certain situations, history shows these events occur with predictable regularity. Krugman on the other hand, believes his prescription is the only valid remedy.  



Up until June 1, 2010 we have focused on the academic aspects of this project. Now, in phase two, we are focused on commercializing the research that has been undertaken. In our defense I would assert that we are actively providing a solution to what we see as happening in oil and gas. We have suggested that the oil and gas firm may be economically challenged unless they changed their key organizational construct to the Joint Operating Committee (JOC). If we look at the example of Shell, who recently completed a comprehensive restructuring of their organization, yet, based on today’s energy prices, are unable to earn a profit on their overall operations. This same scenario is, and will be played out across the industry. An industry that I have accused of muddling through as opposed to actively invoking the changes prescribed by adopting the Draft Specification. Fernandez notes.

Leaving economic policy to common sense might actually be the safer course. Wikipedia described an experiment in the 1980s which suggested that because macroeconomic models performed so poorly, the best course was often to leave well enough alone and muddle through rather than relying on ‘activist’ or ‘visionary’ prescriptions.

People, Ideas & Objects is based on the vision as described in the Draft Specification. Taking the situation at Shell, a prescribed course of further muddling-through might resolve their lack of profitability. On the other hand, using People, Ideas & Objects vision of using the Joint Operating Committee provides an alternative designed to solve exactly that lack of profitability. What was once an economic prescription, that being People, Ideas & Objects vision, was “speculation” on one of many of the possible outcomes of the industry. That speculation has now become the solution to what the industry is ailing from. Some would call this prescient, I call it lucky.



There are those areas (macroeconomics) of the economics profession that equate well with the astrological practices of Madame La Zonga. There are however, other areas (microeconomics) of the economics profession that are fact based, such as specialization and the division of labor, these are the areas that People, Ideas & Objects have focused on providing value.  Our prescribed solution may yet prove to be voodoo, however, I wonder what Shell thinks.



Society is put in peril when world oil production declines. There is evidence that the world's oil production has declined. Therefore the world needs to have the energy industry expand its production. To do so requires that we reorganize to enhance the division of labor and specialization within the industry. As has been proven, this reorganization could achieve far greater oil and gas production. Management of the industry is conflicted in expanding the output of the industry. The less they do, the higher the oil and gas prices and the better they appear to perform. This managerial conflict must be addressed and the performance of the industry unleashed. To do so requires the current management of the industry to fund People, Ideas & Objects and build the systems as defined in the Draft Specification. Please join me here.

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McKinsey on Global Rebalancing

McKinsey have published an article that I think provides a good understanding of how our economy will be functioning in the near term. Entitled “Globalizations Critical Imbalances” it talks about the necessary adjustments in world trade and their implications. Coming from the point of view of the energy industry, I think this document shows the demand for energy will continue to increase substantially in the near term. Prices will be the means of allocating these finite energy resources and therefore the rewards to the innovative oil and gas producer will be substantial. McKinsey notes.

To some extent, the rebalancing of global economic activity from developed to emerging markets simply reflects economic laws of gravity. In a world where ideas can flow freely and countries are at different stages in adopting modern modes of production, communication, and distribution, less developed nations should grow more rapidly than their counterparts in the West as they catch up.

China, India, Brazil and others are providing substantial increases in the quality of life for their citizens. This naturally imputes greater volumes of energy will be consumed by these countries. Competition for energy resources will be extreme. How much of an increase in consumption and energy pricing is reflected in this next quotation.

The structural issue facing developed-world nations is that the amount of high-quality, high-productivity labor that will be mobilized over the next decade in Brazil, China, and India (not to mention Mexico, the Philippines, and Thailand) is likely to be measured in the hundreds of millions of people. By comparison, the entire US labor force comprises 150 million people. This is a wonderful trend for humankind and would be a boon for everyone in the world if emerging-market employment were directed largely toward production for domestic consumption. The challenge for developed-world governments and citizens seeking jobs, however, is that a significant fraction of this emerging-world labor displaces jobs that would otherwise be created in Europe, Japan, and the United States. This may be the underlying reason why unemployment in Europe, Japan, and the United States is becoming more structural rather than cyclical and may get worse over time no matter how much public stimulus is provided. Certainly, the job losses of the Great Recession look quite different from those of past recessions.

We are clearly not out of the woods in terms of the Great Recession. One of the best indicators of the world economies health has been the Baltic Dry Index. The costs to ship dry goods has fluctuated wildly during the last few years. Although the index has stabilized over the past few quarters, it remains substantially below the highs recorded prior to the beginning of the recession. (Note the recent decline in the index has been substantial.) McKinsey notes the difficult situation these global imbalances will cause various governments.

It is very difficult to say how these issues will play out. The global rebalancing that is needed is obvious: developed-world countries need to save more, consume less, become more fiscally disciplined, and run current-account surpluses (or at least be neutral). Emerging-world countries need to let their currencies rise until PPP rates are closer to financial-exchange rates. They need to consume more, save less, run current-account deficits (or at least be neutral), and continue investing, with some of the capital provided by outsiders. If major national governments work proactively together to rebalance and coordinate their fiscal, monetary, trade, and foreign-exchange policies, the adjustment process could be gradual.

The implications of this “rebalancing” may appear dire to those in the developed economies. I think the opportunities will be substantial and the challenges significant. Those that are able to innovate, and particularly the oil and gas producers, will realize many benefits. Realization that we are no longer in the “low cost” era of the energy industries past. Changing from this past mindset to one that can profit from these types of economic forces requires the changes that are contemplated in the Draft Specification.

The underlying global economic processes under way are very powerful, and the profit opportunities will be enormous as four billion people in emerging markets triple or quadruple their incomes and wealth over the next 20 years.

McKinsey are specific on how companies should position themselves for these changes. Oil and gas firms need to adopt these and other recommendations. It is foolhardy to think that these economic challenges and opportunities can be handled by the existing bureaucracies. Innovative oil and gas producers need to begin the process of addressing these opportunities by acquiring the software development capability of People, Ideas & Objects and begin the development of these software applications.

These suggestions represent specific applications of the more dynamic management approach I have urged companies to adopt in the past. The hallmarks of that approach—heightened awareness, greater resilience, more flexibility, and the timely alignment of leadership around needed adjustments—will be invaluable for companies as they navigate the choppy waters of global economic rebalancing. This process will continue and perhaps even accelerate in the years ahead, not despite, but because of the structural adjustments that are needed to put the global economy on a more sustainable trajectory.

Society is put in peril when world oil production declines. There is evidence that the world's oil production has declined. Therefore the world needs to have the energy industry expand its production. To do so requires that we reorganize to enhance the division of labor and specialization within the industry. As has been proven, this reorganization could achieve far greater oil and gas production. Management of the industry is conflicted in expanding the output of the industry. The less they do, the higher the oil and gas prices and the better they appear to perform. This managerial conflict must be addressed and the performance of the industry unleashed. To do so requires the current management of the industry to fund People, Ideas & Objects and build the systems as defined in the Draft Specification. Please join me here.

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