McKinsey Organizational Capabilities

McKinsey have published the results of a recent survey. Their survey was on the topic of building organizational capabilities. People, Ideas & Objects is designed to provide the oil and gas industry with an ERP systems development capability. A user driven capability that provides the innovative oil and gas producer with the most profitable means of oil and gas operations. Key to this objective is the ability of the producer firm to focus on its strategic assets. And build the science and engineering capabilities necessary to exploit their talent and assets.

I would argue that with the financial crisis and the soon to be insatiable demand for energy. Will require industry to focus on developing these capabilities. However, I am satisfied with the survey result suggesting:

Nearly 60 percent of respondents to a recent McKinsey survey say that building organizational capabilities such as lean operations or project or talent management is a top-three priority for their companies. Yet only a third of companies actually focus their training programs on building the capability that adds the most value to their companies’ business performance.

The last sentence of that quotation is an area where the Community of Independent Service Providers have another business opportunity. It was noted here the other day that the CISP could research, develop and implement principles of and consulting services for the area of organizational behavior. Building organizational capabilities in focusing the producer on the engineering and earth science disciplines may very well be another area where the CISP could develop a substantial business. That is not to suggest that the CISP is involved in the direct science and engineering, McKinsey provides a good definition of the context.

We defined a capability as anything an organization does well that drives meaningful business results. The survey explored which capabilities are most critical to a company’s business performance and why they focus on the capabilities they do. It also asked executives how their companies create and manage training and skill-development programs and how effective those programs are in maintaining or improving on their priority capabilities.

I believe the oil and gas needs a strong software development capability. Software is an area where value can be built in all industries. If users are able to think of new and innovative ways of doing business, the ability to change to those new ways is dependent on the software that defines and supports the organization. In a science focused business such as oil and gas. Where innovation on those sciences will accelerate substantially in the decades to come. The capabilities within the producer, and the software development capability that is discussed on this blog, are areas where value can be built. According to the McKinsey survey results, this concern / objective is not generally shared.

Sixteen percent of respondents in China and 20 percent in India say capability building is a top priority for their companies—versus 10 percent overall and 8 percent in North America.

and

Respondents at companies whose training programs are effective in maintaining or improving the drivers of business performance also say their companies pay more attention to tools that support or enable capability building, such as standard operating procedures, IT systems, and target setting and metric tracking.

People, Ideas & Objects has been resisted by the management of oil and gas. They know that if there is no software developed that competes with their way of doing business, they can retire in riches. Building a capability is managements conflict of interest.

In addition, although resistance to change is often viewed as a barrier to building new capabilities, almost as many respondents to this survey identified a lack of resources and an unclear vision as barriers.

Within People, Ideas & Objects I have specified a Technical Vision of how IT will impact oil and gas. There is also a User Vision of how the users will interact within the system. And the Draft Specification details a vision of how and what the software will do for the oil and gas producer. What is management's vision of the future?

To reiterate this is an area where much value can be created. The producer firms will be challenged in ways that we can't imagine today. To prepare for this eventuality, the Community of Independent Service Providers will be able to prepare their clients in the fashion that McKinsey discusses in this survey's results. These are the types of businesses that can be developed by the CISP. I will continue to highlight areas where I think the most value can be generated to the producers, and earned by the CISP.

If your an enlightened producer, an oil and gas director, investor or shareholder, who would be interested in funding these software developments and communities, please follow our Funding Policies & Procedures, and our Hardware Policies & Procedures. If your a government that collects royalties from oil and gas producers, and are concerned about the accuracy of your royalty income, please review our Royalty Policies & Procedures and email me. And if your a potential user of this software, and possibly as a member of the Community of Independent Service Providers, please join us here.

Technorati Tags: People's McKinsey CISP Capabilities Organization Survey Development
 

McKinsey a Case for Change

McKinsey Consulting have another interview that is topical for the work we are doing here at People, Ideas & Objects. This interview is with Stanford Professor Chip Heath who has written a book called "Switch: How to Change Things When Change Is Hard".

The Preliminary Research Report reviewed Noel Tichy's book "Managing Strategic Change Technical, Political and Cultural Dynamics." Since that time there has been no real discussion on this web log about how change is managed within organizations. Organizational behavior is the difficult work of building support for change and dealing with the psychological aspects of human nature. Which are not my personal forte'. This topic is an area of great concern and of currently little capacity to deal with it. Therefore it is one of the areas that I think the Community of Independent Service Providers can take on and build significant value for the users and producers of People, Ideas & Objects software applications.

Professor Heath documents that we share a disdain for "best practices". He suggests that we incorporate "bright spots" which is a way of highlighting the areas that we are good at.

Chip Heath: Many companies try change themselves by benchmarking other organizations and borrowing their procedures or practices. The irony of benchmarking is that we’re essentially telling organizations to be more like GE or Apple or Nike. As Dev Patnaik, the author of Wired to Care,⁴ said to me one time, we know this doesn’t work on a personal level: we resist when members of our families say, “Be more like your brother.” The principle of bright spots is that you shouldn’t try to be more like Apple; you should try to be more like yourself at your best moments. Think about what you’ve done in the past, or what you’re doing now, that has worked tremendously well.


I won’t say there’s no value in benchmarking. But if you believe that organizations differ in their cultures, capabilities, and structures, there’s something fundamentally odd about saying that you want to be more like another company that has a very different culture, structure, and set of capabilities. At the very least, the idea of looking to your own bright spots is a useful addition to your tool kit.

Well stated. He also comments about fear as a motivator for change. I noted the sense of urgency in the oil and gas marketplace toward the need for change had diminished since the economy has recovered. That a complacency to make the needed changes was beginning to show.

The Quarterly: What’s your view of the notion that change is easier when you have a “burning platform” from which to motivate it?

Chip Heath: That is one of the silliest pieces of business jargon. The idea of the burning platform is that people only change when they’re scared. But fear, as an emotion, creates tunnel vision. Police officers call this “weapon focus”: crime victims can often give great descriptions of the weapon, but nothing about whether the assailant was tall or short or had facial hair, because they focus on what evoked their fear.

That kind of tunnel vision is devastating in times of change. If you’re doing everything basically right and you just need to improve execution, you can scare people and they’ll execute better and faster. But that’s not true of most change situations, where you need to be doing something new. Fear is the worst motivator here because it makes people work harder at what they did in the past.

Good news to this project. As I note above, my aptitude for organizational change is low. I thought the fear as a motivator was really the only time that people do act. I see now that the financial crisis has shown people what is and isn't working and the need for change in a constructive and positive environment is what we need.

I would direct his final comment to those who need to act. The senior executives of oil and gas firms.

The Quarterly: What messages do you want to leave with senior executives who are seeking to catalyze change?

Chip Heath: Pay attention to creating an emotional case for change, not just an analytical one. Scale up bright-spot successes. And use your power as a top leader to smooth the path to change. Your people are ready to step up to the plate, but if systems or procedures are getting in the way of change, you are the one with the power to eliminate them.

This article reflects the importance of this topic to business. What I see happening is that someone who has the skills and aptitude to apply this knowledge to join the Community of Independent Service Providers (CISP). They could then review the research of Heath, Tichy and others to develop the planning and implementation of the appropriate change management elements. Then provide a comprehensive change management service for the CISP, the developers, users and producers.

March 31, 2010 is the deadline for raising our 2010 operating budget. After which a variety of consequences, such as financial penalties and a loss of one years time will occur. Our appeal should be based on the 21 compelling reasons of how better the oil and gas industry and its operations could be handled. They may not be the right way to go, but we are committed to working with the various communities to discover and ensure the right ones are.

If your an enlightened producer, an oil and gas director, investor or shareholder, who would be interested in funding these software developments and communities, please follow our Funding Policies & Procedures, and our Hardware Policies & Procedures. If your a government that collects royalties from oil and gas producers, and are concerned about the accuracy of your royalty income, please review our Royalty Policies & Procedures and email me. And if your a potential user of this software, and possibly as a member of the Community of Independent Service Providers, please join us here.

Technorati Tags: People's Change McKinsey Management Books
 

McKinsey Internet of Things

We have another McKinsey document that provides a keen insight on how the Information & Communication Technology Revolution will affect everyone. This paper entitled "The Internet of Things" is very much on topic. I highly recommend reviewing it.

Of particular interest is the fact that this article dove tails with the People, Ideas & Objects Technical Vision. Recall this vision suggests that since the oil and gas industry is comprised of sciences around heat and pressure, the use of sensors to monitor and control elements of the production cycle is possible. This monitoring and control would help in making the industry more productive and enhance the business decisions made, if, firms were able to deal with the volumes of data.

The four cornerstones of the Technical Vision are as follows.

• IPv6 - Providing unlimited addressing for those sensors to be accessed and controlled.
• Java - Strong Static Typing providing assurance that the sensor your controlling is really the one that you want, and not a mistake.
• Wireless - Ubiquitous networks anywhere, anytime.
• Asynchronous Process Management - The ability to deal with data and information in a more controlled fashion.

A couple of interesting points that McKinsey suggest the "Internet of Things" could provide are as follows.

Automation and control

Making data the basis for automation and control means converting the data and analysis collected through the Internet of Things into instructions that feed back through the network to actuators that in turn modify processes. Closing the loop from data to automated applications can raise productivity, as systems that adjust automatically to complex situations make many human interventions unnecessary. Early adopters are ushering in relatively basic applications that provide a fairly immediate payoff. Advanced automated systems will be adopted by organizations as these technologies develop further.

The impact within oil and gas could be much higher productivity and greater value. The scenario that I have detailed on this blog is that of a pricing model that provides the producer with price-maker characteristics. The scenario has the Joint Operating Committee deciding that their production costs of $50 / barrel require that production begin to be scaled back 25% at $80, 50% at $70, 75% at $60 and shut-in at $50.00. The input being the market price would drive control systems to shut the well down to the correct level of production. Otherwise producers may find they continue to produce at a loss and the price drops to $25.00. This being a predetermined and agreed to threshold where the operational decision making authority resides - The Joint Operating Committee - and as a result can be operated in an automated fashion.

Software to aggregate and analyze data, as well as graphic display techniques, must improve to the point where huge volumes of data can be absorbed by human decision makers or synthesized to guide automated systems more appropriately.

McKinsey go on to suggest that these types of systems will require new organizational models be adopted by firms.

Within companies, big changes in information patterns will have implications for organizational structures, as well as for the way decisions are made, operations are managed, and processes are conceived. Product development, for example, will need to reflect far greater possibilities for capturing and analyzing information.

And a dedicated software development capability, like that which is discussed here at People, Ideas & Objects.

Companies can begin taking steps now to position themselves for these changes by using the new technologies to optimize business processes in which traditional approaches have not brought satisfactory returns. Energy consumption efficiency and process optimization are good early targets. Experiments with the emerging technologies should be conducted in development labs and in small-scale pilot trials, and established companies can seek partnerships with innovative technology suppliers creating Internet-of-Things capabilities for target industries.

March 31, 2010 is the deadline for raising our 2010 operating budget. After which a variety of consequences, such as financial penalties and a loss of one years time will occur. Our appeal should be based on the 21 compelling reasons of how better the oil and gas industry and its operations could be handled. They may not be the right way to go, but we are committed to working with the various communities to discover and ensure the right ones are.

If your an enlightened producer, an oil and gas director, investor or shareholder, who would be interested in funding these software developments and communities, please follow our Funding Policies & Procedures, and our Hardware Policies & Procedures. If your a government that collects royalties from oil and gas producers, and are concerned about the accuracy of your royalty income, please review our Royalty Policies & Procedures and email me. And if your a potential user of this software, and possibly as a member of the Community of Independent Service Providers, please join us here.

Technorati Tags: People's McKinsey Vision Technical
 

McKinsey, A Conversation With Jim Wallis

In the Preliminary Research Report Professor's Anthony Giddens Structuration theory was reviewed alongside Professor Wanda Orlikowski's Structurational Model of Technology. These suggest that organizations, people and society move together or there is failure. In May of 2004 this appeared to me that the organizations were failing both people and society and that as a result, failure of one of the three components (people, society or organizations) would occur. The financial crisis is the failure of the organizations. They have failed in so many ways it is difficult to list them all. Until today.

McKinsey have an unbelievably good video that deals with this topic. People are angry and do not want to see things continue in the fashion that they are. This is captured in this video very elequently. Enjoy!



Technorati Tags: People's McKinsey Change Orlikowski Code-of-Conduct Community Leadership

McKinsey on De-leveraging

McKinsey on De-leveraging

Rarely are we provided with research that is applicable both professionally and personally. McKinsey Global Institute (MGI) have just published a comprehensive document entitled "Debt and De-leveraging: The Global Credit Bubble and Its Economic Consequences". A country by country breakdown of debt levels and the situations that both individuals and organizations will face in the coming years. The document can be downloaded from here. (Registration required.)

Although there is no breakdown by industry. Oil and gas is not in the situation where they are highly leveraged, in comparison to other industries. The high prices of the last few years did fuel heightened levels of activity, but those were with cash flow generated from production. As I have indicated many times, producers are being rewarded for their innovativeness. Borrowing money and raising capital are no longer the critical determinants of success in oil and gas.

Technorati Tags: People's McKinsey Economics Leadership
 

McKinsey, Strategy Through Turbulence

I can not reflect on the past four years on this blog without closing out the year by noting the significant contribution that McKinsey Consulting have provided us. This is the 64th article that I have written about here on this blog. And more then just the numbers, the topical nature and focus on the changing business times that we find ourselves in. They have done a great service to their clients and I think they have established themselves as the number one consulting firm for the twenty-first century.

This article is a brief eight minute video that summarizes everything that we stand for here at People, Ideas & Objects. The opportunities, turmoil and change are all themes that underlie the research and system specifications. It is of Professor Don Sull of the London Business School. Who talks clearly about the times we face. He also has a new book that I would recommend putting on your reading list as well. Enjoy!

(Embedded video may not render, please see the original McKinsey site.)



Technorati Tags: People's McKinsey Change Leadership Video

McKinsey on Enterprise 2.0

We have an interesting video of Professor Andrew McAfee talking about technologies under the label of Enterprise 2.0. This will be the fourth time that I have highlighted McAfee's work and the sixty third McKinsey article. All I can say is I'm glad this body of work is behind me. I still have many McKinsey articles that I want to write about, just not enough time in the day.

Professor Andrew McAfee coined the phrase and defined what "Enterprise 2.0" is and means. Particularly from the point of view of how organizations will be affected by these technologies. Like the recent discussion of Google CEO Eric Schmidt, McAfee is not talking about the technologies for the sake of the technologies but the massive impact that the Information Technology revolution is having on business.

Last time I highlighted the work of Professor McAfee and his Enterprise 2.0 concepts he was at Harvard. He seems to have escaped and moved closer to the river by joining MIT and is now the principal research scientist at the "Center for Digital Business" at the MIT Sloan School of Management. He also has a book coming out called "Enterprise 2.0: New Collaborative Tools for your Organization’s Toughest Challenges". Lastly the McKinsey article has this video presentation of this paper. (Video is available here.)

McKinsey ask a number of pertinent questions. McAfee's answers provide real value for this community in terms of what and how "Enterprise 2.0" and People, Ideas & Objects application modules will affect today's work place. The following is how I see it for oil and gas.

McKinsey: How is Enterprise 2.0 changing the way we work?

McAfee's answer to this question is in line with the collaborative developments of WikiPedia. How the initial start attempted to control the contributions of people, and only after scrapping the process and leaving it to self organized teams did the value, quality and quantity increase.

I see a much larger change. The 7 / 24 clock will be the time people are available to work. Asynchronous Process Management, a cornerstone of the People, Ideas & Objects Technical Vision will permit people to work when and where they want. The office will not be used even half as much as they are today, and the quality of life will be substantially higher. When the computer screen looks the same at home or in the coffee shop as it does at the office, an office will become a place to go to concentrate. The rest of the day will be interspersed with personal and work related activities completed as required.

McKinsey: How do you get this started in an organization?

McAfee comments;

There’s a lot of debate about that question right now. And the debate is typically between people who advocate [a top-down approach and those who advocate] almost a purely bottom-up approach—in other words, deploy the tools, stop worrying about what’s going to happen, and get out of the way as the management of the company and let it percolate up from down below. Or, if you hear about a grassroots effort, encourage it, support it financially, but, again, get out of the way, let the bottom-up energy happen.

People, Ideas & Objects has chosen the bottom-up grassroots method of solving these problems and building the software based on the Draft Specification. I like McAfee's comment that if you hear of a grassroots effort, encourage it, support it financially. Music to my ears so start spreading the news.

This software development can not be a sustained and quality effort unless the users are compensated financially for their time. This is a big part of our budget and defines why our approach is different from the rest of the marketplace. As McAfee states in this document, developing the community takes time and effort.

McKinsey: What else can undermine adoption?

McAfee notes the unreasonable time frames put on by management. People, Ideas & Object software developments, or any collaborative project, will not be zipping along before the end of the quarter. Such expectations are how the hierarchy greases the wheels with the consumption of human energy and spirit.

Another failure mode is to be too concerned about the possible risks and the downsides. If we get wrapped up in those, we’re not going to take the plunge and actually deploy any of these new tools and turn them on and encourage people to go ahead.

I don't see the downside here. Collaboration brings many risks to the bureaucracy. However their risks are the result of the collaboration out performing the bureaucracy. I can live with those risks, and I think that McAfeee's audience is different to those of this blog. He is preaching to the unconverted and as such has to hedge his comments while he moves the Trojan horse into place.

McKinsey: What is the CIO’s role in encouraging Enterprise 2.0 and managing the risk?

McAfee notes;

A lot of them see their roles as essentially conservative, though. In other words, “My job is to not increase the risk profile of this organization before everything else.” That’s a legitimate concern, it’s a legitimate job for the CIO, but all my experience so far tells me that Enterprise 2.0 doesn’t increase the risk profile of an organization.

This is probably why I get in so much difficulty with companies. I ask sarcastically what's a CIO? I don't see them surviving in the long run. Much like secretaries and draftsmen these positions may disappear rather quickly. These types of comments should be directed to the CEO or the CFO as they have the proper authority and responsibility to make the decision.

In my presentations to the industry I noticed something that I had never learned or considered before. When I talk to CEO's or CFO's I feel there desire to pick up People, Ideas & Objects software developments. Why they haven't is that they would do serious damage to their firms by changing direction to quickly, without the urgent need and support for the change. They therefore pass on the opportunity until such time as we proceed to a point where they can make the change.

McKinsey: What does this mean for middle managers?

McAfee notes;

If you’re a middle manager who essentially views your job as one of gate keeping or refereeing information flows, you should be pretty frightened by these technologies, because they’re going to greatly reduce your ability to do that. They’re going to reduce your ability to filter what goes up in the organization and what comes down in the organization. And they’re going to greatly reduce your ability to curtail who your people can interact with, talk with, and receive information from. So if you’re inherently a gatekeeper, this is a real problem for you.

In my presentations to the industry it is this group of people that feel challenged by these technologies and the People, Ideas & Objects application. The class of workers known as middle managers career and position are toast. I don't foresee many of these people continuing to be effective in the very near future. If this is news to anyone in middle management, good morning.

McKinsey: How should companies measure the success of Enterprise 2.0?

McAfee notes;

Again, you see a lot of energy, you see a lot of people very willing to take a few seconds to answer a colleague’s question—even if it’s a colleague they don’t know. So when I see successful companies tackling this tool kit, I see them doing a little bit of thinking upfront about what problem or opportunity they’re trying to address, then deploying an appropriate technology in response to that. They then measure progress: How much uptake are we getting? What’s the traffic look like on this? Which is very different than measuring ROI, I think.

In the Preliminary Research Report I suggested that companies use the revenue per employee as a measure of an oil and gas firms performance. Revenue per employee can vary significantly from company to company based on the unique attributes of its asset base. It has direct application between producers and is an accurate measure of the firms current and future capabilities. This is particularly the case as those producers with low revenue per employee will have difficulty increasing the revenue factor without having to address a possible over staffing issue.

The purpose, or competitive advantage, for the Community of Independent Service Providers and People, Ideas & Objects software applications. Is to provide the innovative producer with the most effective and profitable means of oil and gas operations. Revenue per employee will be a critical method of how the community advances the science of management and business for the oil and gas clients using this software and community. Please join us here.

Technorati Tags: People's McKinsey McAfee Video Technology

McKinsey Interaction Costs Part II

This is the second post of McKinsey's review of Interaction Costs. The original McKinsey documents are located here and here. As in my first blog entry, the discussion is about the role that people will have in future organizations. How work is changing over time from transformational to transactional and on to tacit. McKinsey notes in its opening paragraph.

Like vinyl records and Volkswagen Beetles, sustainable competitive advantages are back in style - or will be as companies turn their attention to making their most talented, highly paid workers more productive. For the past 30 years, companies have boosted their labor productivity by re-engineering, automating, or outsourcing production and clerical jobs. But any advantage in costs or distinctiveness that companies gained in this way was usually short lived, for their rivals adopted similar technologies and process improvements and thus quickly match the leaders.

Durable competitive advantages, like in other industries, have been hard to develop in oil and gas. Much of the last 30 years has been a battle of survival from one crisis to the next. Most of these crisis were due to the high cost of capital, or low commodity prices. There have also been a variety of issues that are unique and local, such as the lack of take away pipeline capacity in Western Canada.

Today I see a different business that is driven by the earth science and engineering capabilities of the firm. Driven by these sciences ever increasing volume of work per barrel of oil equivalent. Application of the science and engineering knowledge to the asset base is the unique, durable competitive advantage of the producer firm. Sustainable competitive advantages are attainable in oil and gas to those that can build their capabilities in the earth sciences and engineering disciplines.

As we have mentioned here many times the key ingredient is the quality of the team that occupy senior management. Providing the resources and direction to reveal the long term value is the skill of these teams. The key is that oil and gas exists in the minds of oil and gas (wo)men.

New McKinsey research reveals that these high-value decision makers are growing in number and importance throughout many companies. As businesses come to have more problem solvers and fewer doers in their ranks, the way they organize for business changes. So does the economics of labor: workers who undertake complex, interactive jobs typically command higher salaries, and their actions have a disproportionate impact on the ability of companies to woo customers, to compete and to earn profits. Thus, the potential gains to be realized by making these employees more effective at what they do and by helping them to do it more cost effectively are huge - as is the downside of ignoring this trend.

What can I say. McKinsey have been able to provide advice such as this throughout the past decade. What is needed in oil and gas is the organization, its systems, the people that support the team and the team itself to operate at a higher level. A level that is focused on innovation in the earth sciences and engineering capabilities and the never ending increases in the demand for these talents for every barrel of oil equivalent.

SAP is the bureaucracy. Started in the 1970's to deal with the various tiers of manufacturers in the auto industry, SAP has branched out into all the industries on the planet. SAP is the most popular choice of senior producers and holds the number one position of ERP systems in oil and gas. I have seen installations that use the budget system to calculate the gross and net expenditures on a Statement of Expenditures or Statement of Operations. To suggest that they recognize the Joint Operating Committee is beyond the scope of what is possible. With the numbers of companies, and the volume of installed code, there is not enough energy in the universe for SAP to make the changes to support the innovative oil and gas producer.

Much can be said about Oracle Fusion as well. Oracle recently showed some of the aspects of their new system. They should be credited with the energy to at least rewrite the software code. That only took them $39 billion. So one can see the scope of how difficult it is for these applications to change their stripes. Now Oracle has to embark on the other aspect of moving the universe by changing their paying customers to the newer far more expensive software. Exactly, what was Oracle's CEO Larry Ellison thinking.

Neither of these two software vendors have listed the energy industry as a primary focus. They have ceased to be a viable alternative in the oil and gas marketplace for their inability to understand or deal with the unique attributes of the producer. That is they do not know of the Joint Operating Committee's existence. Neither of these two applications have any vision of what the oil and gas firm can understand or appreciate.

Neither of these two software vendors have a business model that meets the needs of the producers. Or a business model that provides the value of the software to the benefit of the software user. Theirs are more interested in corporate survival, due to their $39 billion in investments. It is however, reasonable to assume that both these two software vendors will be able to deploy vast armies of marketing people to impress the "old school" management with another version of their software.

This will be a test of the "old school's" managements survival from the pre-crisis economy. McKinsey sees this reality just as I do here at People, Ideas & Objects.

As more 21st-century companies come to specialize in core activities and outsource the rest, they have greater need for workers who can interact with other companies, their customers, and their suppliers. (Enabled in People, Ideas & Objects by the Resource Marketplace Module)

Thus the traditional organization, where a few top managers coordinate the pyramid below them, is being upended.

Raising the productivity of employees whose jobs can't be automated is the next great performance challenge -- and the stakes are high.

Companies that get it right will build complex talent-based competitive advantages that competitors won't be able to duplicate easily -- if at all.

I think that I am on record as stating that "best practice" is one of the worst acts that management conceived. For oil and gas producers to maintain their competitive advantage is to focus on their asset base, which includes their land lease and productive assets augmented with their earth science and engineering capabilities.

The good news concerns competitive advantage. As companies figure out how to raise the performance of their most valuable employees in a range of business activities, they will build distinctive capabilities based on a mix of talent and technology. Reducing these capabilities to a checklist of producers and IT systems (which rivals would be able to copy) isn't going to be easy. Best practice thus won't become everyday practice quite as quickly as it has in recent years.

Much of the McKinsey article focuses on the changes in the types of work that is being undertaken at firms today. Documenting how jobs, and particularly new jobs, are focused on tacit interactions. How over time jobs have transcended transformational to transaction oriented and now "tacit" work.

As I indicated in Part I of this review, the reductions in transaction costs is a focus of the Draft Specification. This second McKinsey article is on the role that people will fill in the future of work. Please join me here.

Technorati Tags: People's McKinsey Capabilities Competition Innovation Value-Proposition
 

MGI on Global Financial Markets

The McKinsey Global Institute is the research and development arm of McKinsey Consulting. (Registration Required) They have published "Global Capital Markets: Entering a New Era".

MGI’s mission is to help leaders in the commercial, public, and social sectors develop a deeper understanding of the evolution of the global economy and to provide a fact base that contributes to decision making on critical management and policy issues.

To suggest that I am overwhelmed by the scope of the economic problems that we face. Is something that I would never have believed possible. I'll leave it to those that want to review the paper to do so, however, it is stark. My "job" here at People, Ideas & Objects is to make the ideas compelling for like minded individuals to organize and act. I call on the shareholders of the existing oil and gas firms to build the software discussed in this blog. To act in financing the building of the application modules in the Draft Specification. As Paul Romer recently said in terms of his Charter Cities initiative, "All that holds us back is a failure of imagination."

After 12 months of the global credit crisis, it is easy to see the difficulties that continue in the marketplace. In reviewing this MGI document it is clear that serious problems remain. My own opinions are not of importance, but it really seems that we have been using debt to fuel the western lifestyle for the past 20 years. To find the value that should have been generated during this past 20 years, is a lonely and difficult task. I see the bureaucracy as being the main culprit here. Accusing the bureaucracy is somewhat self serving for me to say, but I don't see any value being generated through this archaic form or organization. Continuing on in the fashion that we are, shows me that we will be challenged in keeping the global economy moving forward. 

I leave you with a few select and sobering quotes.

Going forward, our research suggests that global capital markets are entering a new era in which the forces fueling growth have changed. For the past 30 years, most of the overall increase in financial depth—the ratio of assets to GDP—was driven by the rapid growth of equities and private debt in mature markets. Looking ahead, these asset classes in mature markets are likely to grow more slowly, more in line with GDP, while government debt will rise sharply. An increasing share of global asset growth will occur in emerging markets, where GDP is rising faster and all asset classes have abundant room to expand.

Given the decline in asset values and growth in debt, we see that leverage in the global economy has increased during the financial crisis rather than declined. This is true for many households, governments, banks, and some segments of the corporate sector. In aggregate, the global debt-to-equity ratio nearly doubled, jumping from 124 percent in 2007 to 244 percent by the end of 2008. This raises the vulnerability of the global economy to further shocks. It also indicates that the long process of deleveraging in the private sector has at best only just begun, and in the public sector has yet to begin.

One of the most striking consequences of the financial crisis was a steep drop-off in cross-border capital flows, which include foreign direct investment (FDI), purchases and sales of foreign equities and debt securities, and cross-border lending and deposits. These capital flows fell 82 percent in 2008, to just $1.9 trillion from $10.5 trillion in 2007 (Exhibit 7). Relative to GDP, the 2008 level of cross-border capital flows was the lowest since 1991. This created turmoil in the global banking system, causing severe liquidity crises and hurting borrowers dependent on foreign loans. It is unclear at this writing how quickly these flows will recover.

Although the crisis started in the United States, it followed multi-year borrowing expansions in many other countries as well. Total global borrowing—comprising all loans, forms of credit, and debt securities—rose by 70 percent from 2000 through 2008, to $131 trillion. Not only has the recent credit market turmoil nearly stopped this growth, but it has set the stage for a long process of debt reduction going forward.

Many parts of the economy will need to be rebuilt. Oil and gas is rebuilding around the Joint Operating Committee and the vision of the Draft Specification. Please join me here.

Technorati Tags: People's McKinsey Economics Vision Funding
 

The situation today.

I've come across a number of interesting comments and arguments that are reflective of today's economic situation. The overall level of optimism is impressive, and with these comments and arguments, one would find the appropriate posture to succeed in these changing times.

This first article is from the Endless Innovation blog and the blog entry is entitled "Darwin's Finches and Corporate Innovation". Apparently there was a drought on the Galapagos islands that caused 6 out of 7 Finches to parish. What was obvious was the size of the surviving Finches beaks after the drought were different from those of the Finches before the drought.

Endless Innovation goes on to note;

In the same way, the benefits of having the right innovation processes in place are often masked during good times. "Firms with both new and old technologies remain solidly profitable, happily hopping along... But when hard times hit, innovators survive. Most importantly, they flourish when the business cycle swings up again... But like Darwin's finches, the survivors are not just those who have more technology investments, but those who get the dimensions right." At the end of the day, downturns are not only good for innovation, they are necessary.  

The author reflecting on the fitness of the firm to weather the storm and survive. This thinking is also evident in McKinsey's February 2009 document entitled "The Crisis: Mobilizing Boards for Change". Although it speaks to the efforts that should be undertaken by boards, I think it is good advice for everyone. Starting off with the following questions ;

As companies grapple with uncertainty of a magnitude that few have experienced before, their boards should begin by questioning fundamental strategic assumptions: Is our view of the market realistic? Does our financing strategy take into account the new conditions? Should we reset the incentive scheme or abandon any approach based on share prices? Can we exploit the current glut of talent? How can we take advantage of the pain our competitors are experiencing?

Certainly times have become difficult in the oil and gas industry. By developing the People, Ideas & Objects application modules, producers would have the capacity to scale back production and even shut down the well or facility. What we have seen is the North American natural gas producer continue to produce as the prices decline to levels that can't support the costs of production. Why? And then, why did Chevron cease all natural gas drilling on the continent? Why didn't they cut production? Stopping the development of a companies reserves hurts the long term prospects, health and value of the firm. Selling current production at fire sale prices only further erodes the value of those reserves and shortens the firms reserve life index.

I think that oil and gas companies indulge in this type of suicidal behavior because its the only thing they can do. To shut-in or scale back production requires the Joint Operating Committee to make the majority decision based on a vote by the firms represented. A company like Chevron may have interests in thousands of fields. To think about the internal logistics of these decisions would scare even the most ambitious. However, if the People, Ideas & Objects Draft Specification was built. Producers would easily engage their partners within the Joint Operating Committee to make these types of decisions. And as I have said before, the system would provide the ability for producers to pre-determine the prices at which they would reduce production volumes. The alternative is the producer just continues to produce their reserves. An option that is proven to erode the natural gas marketplace.

One thing about this recession is the duration of not knowing. Not knowing which direction to turn. It is however times like these when most of the change comes into play. Like the Finches, natural selection allowed the species to survive, change will be the factor or ingredient that brings about the new. Just as this video shows the effects of these changes, we will look back on this time and see the importance of being fit and change oriented.



Technorati Tags: People's Video Innovation Energy Firm

McKinsey Interaction Costs Part I

McKinsey are re-publishing two very pertinent documents "A Revolution in Interaction" which I'll cover in this post, and "The Next Revolution in Interactions" which I will cover in my next post. I highly recommend downloading and reading both documents from here and here. I also reviewed "The Next Revolution in Interactions" back in December 2005 on this blog.

As I recall 1997, the boom in technology related companies had begun. Pets.com and other ridiculous businesses were popping up with multi-billion dollar valuations. It seemed as if the collective intelligence of the markets had taken a vacation. McKinsey on the other hand were publishing "A Revolution in Interaction" that even today, provides a solid road map for any firm. 

Much of People, Ideas & Objects research has been around the work of Professor Richard N. Langlois' work at the University of Connecticut. His research, which has earned him the Schumpeter Prize, is on Transaction Cost Economics (TCE). As the 1997 McKinsey article says;

The structure of firms and industries at any given time is designed to minimize the total costs of transformation and interaction.

Using the Joint Operating Committee (JOC) as the key organizational construct of the oil and gas industry would not be possible without the analysis of TCE and today's Information Technologies. The Draft Specification has incorporated these elements and applied these principles to the energy industry. 

So what are Transaction costs or as McKinsey calls them, Interaction costs. And why is that important to oil and gas.

If interaction costs were negligible, an organization could in theory be atomized into a collection of individuals, geographically dispersed but connected by a communications network. In reality, however, substantial interaction costs and the human aspects of effective interaction limit the range of realistic configurations.

With the developments in Information Technology the oil and gas industry has the opportunity to reduce their transaction costs towards the negligible level. The basis of the industry is partnerships, as represented by the Joint Operating Committee. The interactions and transactions between the partnerships can be supported and facilitated in the manner described in the Draft Specification. McKinsey notes;

If providers anticipated this, wouldn't they communicate and develop and distribute products in a very different manner? What if their costs of interacting with customers [partners] also declined? Many of these circumstances may soon come to pass. When they do, falling interaction costs will trigger dramatic changes in the relationship between companies and their customers [partners]. 

Based on my experience and understanding in the energy industry. I can see how the Draft Specification could provide substantial value to the energy industry. Both from an innovation point of view, and, to define and support the movement towards the science and engineering based strategy. Critical to the success of this strategy will be the administrative cost reductions and efficiency brought about by the People, Ideas & Objects Community of Independent Service Providers (CIPS). McKinsey suggested back in 1997 the U.S. would benefit from interaction cost analysis.

For the US economy, the increase in interactive capability could translate into productivity gains worth a third of GDP.

In addition to TCE being applied to the energy industry. The knowledge that Adam Smith's concepts of division of labor and specialization provide the majority of value accretion in an economy. For the energy industry to increase its productivity will require new and more effective means of organizing itself. 

The types of trade-off described above are not made explicitly and transparently. Rather, they have become hardwired with time into the assumptions made in designing organizations and setting strategies - assumptions about customer behavior, distribution economics, manufacturing scale, in-sourcing versus outsourcing, and a range of other variables. In each case, relative interaction cost is a key component of the assumption. This variable is about to undergo radical change. We believe that the interactive capacity of modern economies will at least double, and could increase as much as five-fold, over the next five to ten years.

Clearly these concepts strike at the heart of the strategy of the oil and gas producer. I see producers quickly adopting new strategies based on these concepts. People, Ideas & Objects believes the energy producer is best focused on it's land lease & facilities, and the internal capabilities associated with engineering and earth sciences. With this light weight and nimble structure, small teams of people are able to form, explore, develop and sell for hundreds of millions and even billions of dollars in as little as five years. Only to turn around and do it again and again. These types of producers have no need for the systems and procedures, staff or compliance requirements of the industry in decades prior. These administrative and compliance requirements provide no value to the producer, and are impediments to speed and innovativeness. Using the People, Ideas & Objects application with the CIPS adds these necessary requirements on an as needed basis.

The impact of the new economics on forms of organization will be equally profound. Organizations will adopt a variety of structures that would not have been possible to manage when interaction costs were significant. Our research shows that half or more of a company's spending on labor may be devoted to basic interaction activities, many of them internal to the organization. As the costs of search, coordination, and monitoring fall, we can expect a radical shift in the way corporations are organized. The flatter organizations of the 1990s, for example, are an early reflection of the growing ability to manage distant front-line activity through interaction technologies.

Finally in McKinsey's closing paragraph we see what possibilities await the innovative oil and gas producer.

As in all major economic shifts, the successful innovators will be those that develop the best understanding of the underlying change and act upon it. Success in the next five to ten years will require a deep understanding of the power of interactive capacity in both your own industry and the economy at large.

Recall this was written in 1997. Has the industry made these changes? To a certain extent the new producers that are being developed by teams are showing the way. And these will be the producers that would benefit from the use of the People, Ideas & Objects and the Community of Independent Service Providers that support the innovative oil and gas producer. Please, join us here.

Technorati Tags: People's McKinsey CISP Innovation Langlois

McKinsey conversation with John Chambers

McKinsey have posted a conversation with one of our favorite technology presenters, Cisco Chairman and CEO John Chambers. I have highlighted his talks three times before. (Here, here and particularly here, where he coins the phrase "Content will find you".) I find his presentation skills to be second only to Steve Jobs and is unquestionably the best presenter of business related technology today.

In the first video segment Chambers talks about how he is unleashing the most aggressive set of initiatives he has launched as CEO of the firm. Counting the number of initiatives he launched in the previous 4 recessions at one or two. Chambers states "we're gong to be the most aggressive we've ever been in our history." And is launching 30 initiatives in this downturn. His experience shows that recessions last longer and are deeper then most people expect. Nonetheless he believes his biggest mistakes are as a result of not moving quick enough. 

Chambers warns that moving too quickly is a danger if you don't have the structure and discipline necessary to deal with the speed and change. As we recall the dot com meltdown was particularly difficult for companies in technology. Cisco was one of three companies with market capitalization well within the $400 billion mark. (GE and Microsoft were the other two.) The initiatives he undertook in that recession enabled the new structure and discipline to form, and with today's new collaborative technologies he feels he has the speed and capacity to take on those thirty new initiatives. 

Cisco is just one company. The need or demand for the changes Chambers implemented may have been presented to Cisco in the dot com meltdown. Today I believe the oil and gas industry has similar calls and demands for the entire industry to take action. Yet to date the oil and gas producers have collectively done nothing to change the underlying approach to the business. Do we believe that doing more is the answer to our energy problems? Last years performance should have provided the evidence that more is no longer adequate. Spending record levels of capital, to drop production by 5 - 6% is not positive for the managements. Did they consider doing nothing as an alternative? That may have been the wiser choice. 

Back to the video, Chambers documents how his use of technology has affected the way that he does his job. Blogging, and particularly video blogging is the major form of communication he uses for all of the 56,000+ Cisco employees. The new collaborative technologies are a key enabling technology for Chambers to get his ideas out. But there's more. I have written about Cisco's Telepresence on this blog before. Chambers says Cisco's internal use of Telepresence has cut its annual travel costs from $750 million to $350 million. 

In the third, fourth and fifth installments of this video presentation. It seems as though Chambers has bought into the kool-aid that Silicon Valley has been brewing. It may seem that way to a lot of listeners but I think it is very important to note that his experience with the dot com meltdown was personal and extensive. The use of alternative business models and organizations augmented with the current collaborative technologies are what are providing Cisco with the ability to innovate and move at speed. So much of a firms future competitiveness is capabilities based. The oil and gas industry has a capacity that is below what the market demand for energy is. Oil and gas companies have no plan and no idea what to do. I think it is imperative that people listen to the experiences of Cisco in making their organization perform at these levels. If after thinking about it you still believe it is Silicon Valley kool-aid induced thinking, then I would advise you to consider who Cisco's top competitors are, and what they think of the Cisco juggernaut. (Nortel Networks is selling off major parts while in bankruptcy. And Alcatel / Lucent lost €5.2 billion in 2008.)

Key to capabilities based competition is the enhanced role that leadership takes in the revised business model, organizational structure and technology. Clearly the leadership at Cisco, as represented in its CEO and Chairman have the means to prosper in this new environment. He makes it clear that collaboration requires much more from its leaders. Chambers states the following.

The classic question is, "Well if I'm going to lead, I've got to have people reporting to me, and I've got to control budget" and the answer is 'No', and "No".         

Budgetary power and authority are out. Command and control are the impediments. Clearly he expects the efforts and actions of his firm today will show in the performance criteria in three to five years time. And expects that the earnings and performance of Cisco are baked in the cake as a result of the actions the firm took three to five years ago. We must step off this earnings and performance focused cannibalization of our companies. As Chambers says "you've already won or already lost". 

Lastly, Chambers refocuses on the customer. Selling a vision and communicating it through the multiple channels of Telepresence, Web 2.0 and collaborative tools. This is what I have chosen to do with People, Ideas & Objects. Some may think that is hypocritical of me to suggest the customer is of importance. I have gone to great lengths to criticize the current oil and gas companies. And that is because I do not consider these current oil and gas companies as our customers. It is the Users of the People, Ideas & Objects application that are the customer for this software development project. Our Users in turn have the oil and gas producer as their customer. Please join us here.

Technorati Tags: People's McKinsey Collaboration Productivity Innovation

McKinsey, Bryan and Rumelt Part lll

This is the third and final installment of the McKinsey Quarterlies podcasts from Lowell Bryan and Richard Rumelt. I have taken the two previous podcasts and applied them to the work that is being done in People, Ideas & Objects. In Part l the authors noted the current tendency to think that clear sailing is the normal or optimal operating environment. As they were able to clearly communicate, clear sailing avoids the risks and dangers that need to be addressed in the economy. In Part ll they relate to the "markets" magic healing powers that preclude anyone or company from taking any action or responsibility. Noting the tendency for people to suggest that the bigger problems are not their responsibility, and the market will take care of it.

Part lll takes the conversation to the operating strategies that people can use to optimize their future. Change is happening at a remarkable rate. Much of the change is being forced upon us as a result of the failures brought on by too much clear sailing. Information Technology plays a big part of how I see we rebuild our economy.

It is also interesting to note the level of discussion that is taking place regarding the role of government in the economy. Some interesting points of view are here, here and here. I would also turn your attention to Professor Carlota Perez' earlier work this decade. She was instrumental in predicting the scope and scale of our economic collapse. And how this period of economic renewal is a constant in our economy for over the past 300 years. One of her very pertinent points was the role of government would need to be "redefined" in an innovative and creative manner. 

I have thought about her point of a new role for government for the past number of years. Particularly from the point of view of this software development project. Software defines and supports the organization. We currently see social networks coming into play with the power of connecting like minded people. Software defines and supports not just organizations, but society as well. Just as roads, bridges, communications and infrastructure fall in the jurisdiction of the government. Software as infrastructure provides value to all that live within the society by reducing the shared costs of living in that society, and enabling access for personal and commercial purposes. I think governments need to realize this enhanced role in the new economy.

With that preamble in mind I turn to the document at hand. Bryan and Rumelt note;

If we look ahead a bit, you can see the health care system we have, if we extend it to a larger group of the population, or everybody lets say, its going to bankrupt us, so something is going to give. The strategist is someone who has an idea about what is going to give or about reshaping it. That's how your going to create value. 

This project is about a strategy of how to rebuild the oil and gas industry. An industry which is beginning to show the failures of clear sailing. The current motivation and ability to approach the new science and engineering basis of the innovative oil and gas producer is in question. I am not predicting the future, only suggesting that research shows the Joint Operating Committee provides the appropriate posture for an innovative organization. We must move to the JOC as our opportunity for the future. 

The future lies in the collective hands of the user group that defines, uses and controls this software development. User driven software development is the only method that can assure what the authors say should be the proper posture.

How to prepare to be resilient and flexible no matter how this environment turns out. 

and

Fortune favors the prepared mind.

Soon the economy will force the hands of the people who are now working in the oil and gas industry. People, Ideas & Objects will be here for those people who know the bureaucracies days are over. It doesn't require a lot of vision to see the bureaucracy can't and won't make the transition to the future.

You have to find a wave of change that you can exploit and ride it with skill. Its not about having lockstep plans, its about figuring out which forces we can harness or ride to our benefit. 

Please join us here.

Technorati Tags: People's McKinsey Perez Change Economics Failure

McKinsey Bryan and Rumelt Part ll

In the second audio installment of this series. Bryan and Rumelt discuss the U.S. government's approach to the economic crisis. Their discussion provides a sound basis of looking at the situation we are in, and provides an understanding of the problems and solutions. The final three paragraph of this discussion captures the issue better then I have seen anywhere else.

Milton Friedman, when he studied the Great Depression, had a very interesting take. Everyone thinks of Milton Friedman as this big free-markets guy. But his explanation of the Great Depression was that the Federal Reserve didn’t do its job.

And his explanation of why the Federal Reserve didn’t do its job is interesting. What he says is, the New York banks used to self-regulate themselves when there were credit crunches and runs on the banks. They would get together, and they would more or less agree, “Here are the rules. Here’s how we’re going to handle this crisis.” He said once the Federal Reserve came into being, they stopped doing that. They sort of expected that the Federal Reserve would do it.

And so the institutions and the habits, the whole structure of that self-regulation went into disrepair. Then when the crisis hit in 1929, 1930, that institutional framework didn’t exist, and then the Federal Reserve sat on its hands. And I think something like that is also a way of looking at what’s happened recently. Wall Street could have self-regulated, but it chose not to. And Washington chose not to. And so no sober adult was in charge of these things.

Coming at this problem at a slightly different angle, so much is expected of the "market" to solve these bigger problems. When regulators think that it is their role to avoid the problems. It eliminates the need for the companies to involve themselves of the larger issues. Ask an oil and gas company today what responsibility they have in meeting the market demands for energy? Or, should they allow the service industry to deal with the complete cut-off of funds and force them to cannibalize their operations again? The answer you'll get back is that these are not my problems, the market will figure it out. And as a result we go through another period where we will have to rebuild the service industries to meet the needs of the producers. 

In the Resource Marketplace, and Research & Capabilities Modules of the Draft Specification. I attempt to resolve this situation. By providing the producers, represented in the JOC, with a window on the service industries. Giving the producers a means in which to have the innovations and developments of the earth science and engineering disciplines be extended through to the service industries. Extending the producers organization in a manner that could eliminate the feast or famine cycle they induce in the service industry. Just because the producer receives 100% of the proceeds from oil and gas sales. Does not entitle them to expect the service industry will source all of their capital and ideas from elsewhere. They form too critical a part of the industry to hold them ransom each time their is problem at the producer level. 

In a recent article in the Financial Post that reflects the final resolution of ignoring the larger issues. Henry Sykes, President of MGM Energy Corp in Calgary talking about the delays in the Mackenzie Valley Pipeline says;

"This is an embarrassment to the country -- this project, the regulatory system … and yet nothing is happening," Mr. Sykes said in an interview."While I remain optimistic that there will eventually be a pipeline, I have given up predicting timing. Between the regulatory process and the fiscal negotiations, I think this has taken far too long.

If you agree the industry needs to begin to deal with these types of issues. That there are larger unaddressed issues to be resolved, please join us here.

Technorati Tags: People's McKinsey Economics Change Leadership

McKinsey: Bryan and Rumelt, Part l

It is astonishing to me the pace and depth of research and articles that McKinsey are producing in this current economic crisis. And in suggesting that the scope is limited to the current crisis would be short selling the leadership that McKinsey have provided since at least 2005. I began writing this blog at the end of that year and have published 54 other McKinsey article reviews since. All of these being of the highest quality of input that I have been able to find.  

UCLA Professor Lowell Bryan and McKinsey Director Richard Rumelt talk about the strategies needed to address these financial difficulties. And in the introduction it is noted as to how we found ourselves in this financial crisis. 

Factors that lead executives to take huge unsecured risks. Including the separation of risk and rewards and too much managing by the numbers. 

Definitely on topic, and when an article starts off with the comment;

Dramatic failure of management and governance. 

I'm sold. The commentators introduce a metaphor for what they see today by drawing on experiences in the development and operation of the Hindenburg. One of the authors had the opportunity to discuss with an individual who rode across the Atlantic on the Hindenburg. Noting the individual marvelled at the smooth nature of the ride. Which of course it did until it crashed. The point being that the viewing of irrelevant statistics, such as the Hindenburg's smooth ride, miss the level and type of risks of that mode of transportation being inherently dangerous. Management at the manufacturer of the Hindenburg noted that the crash would be someone else's problem. 

In oil and gas I have written about the disjointed nature of the industry in this blog. Running the Pig series which highlights 4 local producers who have declining reserves and production, yet at the height of their folly they had assigned themselves $3.6 billion "in the money" stock options. 

Yet there is a larger issue at play in the industry, and this article is directly on point when it mentions the Hindenburg's management suggesting the crash was someone else's problem. Oil and gas production in the world is not growing. We've known that since 2005, and may indeed be in the early years of an advanced decline. Energy is the oxygen used to power our economies, without it we are all dead. Yet my daily interaction with oil and gas managers reflects that this is not deemed as their fault. That is someone else's problem. 

Asking difficult question like "what are we doing" vs reflecting on irrelevant results are some of the points made in the McKinsey article. They also point out the disconnect between management and ownership and reference Adam Smith's agency theory. These points are exactly why I believe the two sources of revenues for this software development project are the oil and gas investors themselves and the governments that have royalties as part of their income. 

The last point I want to make in this first edition of the McKinsey article is around the 8:10 point in the audio. A comment is made that people don't know where they are going

... and they haven't got a business model and strategy for where they are going, they have a strategy and business model for smooth sailing. 

I believe the future successful producer will have to move from the banking mentality of predictable returns to an innovative stance based on the underlying science and engineering of the industry. My research shows that using the Joint Operating Committee provides the appropriate stance for the innovation and science to iterate within the commercial environment of an oil and gas producer. These are some of the attributes that are captured in the Draft Specification. 

Finally, the 1700's in England saw 6 million people living in poverty and sickness. In 1850 England had 24 million people living in prosperity. This contrast is the effect that the industrial revolution had on the quality of life. Recall that Professor Ludwig von Mises says the industrial revolution was the solution to the problems of society. I think it is reasonable to assume that today's problems, and particularly the problems that McKinsey notes in this article, will be the problems that are solved through the Information Technology revolution. Please join us here. 

Technorati Tags: People's McKinsey Economics Change Leadership