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.

The Preliminary Specification Part XVIII (PA Part IV)

In yesterday’s post we discussed how the Joint Operating Committee was able to manage who was available to work for the property. The ability to pool the earth science and engineering resources from the partnership is something that is asserted as being a necessity in the future of the oil and gas industry. It should be stated here as well that the Military Command & Control Metaphor would not be limited to just the earth science and engineering disciplines, but would include everyone that is employed within the producer firms. So yesterday’s post would help us to deal with the who, now we need a mechanism to deal with what it is they will be doing.

The next part of the Partnership Accounting module deals with the operational side of how the field work within the Joint Operating Committee gets completed. Partnerships have always had AFE’s and operations budgets to deal with how much will be spent on an annual basis at a facility etc. And those continue in their traditional ways in the People, Ideas & Objects application. This post deals with how the Military Command Control & Metaphor can deploy the resources and authorize the spending of budgets in a manner that provides for the governance of the Joint Operating Committee. Simply we are talking about the Collaborative Work Order System that is part of the Partnership Accounting and other modules. (Compliance & Governance, Petroleum Lease Marketplace, Resource Marketplace modules).

Deployment of the people within the Joint Operating Committee, with the budgets that are agreed to are not enough to satisfy any interpretation of adequate governance. Proper authorization and responsibility needs to be assigned to ensure that plans and budgets are executed successfully. Without a work order system within the People, Ideas & Objects application the governance of the property would not be possible. The ways and means of successfully controlling costs and deploying the resources in a manner to complete the tasks at hand are what the work order system is designed to complete.

The manner in which the work order system will be deployed will be as follows. If someone asks you to work on a project, your first question should be is “what’s your work order number.” Then you immediately start charging your time to the code. It doesn’t matter if your an employee of the producer where the request came from, a partner in a Joint Operating Committee or a vendor or supplier. If they don’t have a work order number you hang up the phone. If they have a number, you key the work order number into your device or keyboard and continue talking. The work order system will aggregate and bill your time while working on that project. The details, chain of command, tasks and deliverables are all delivered within the work order system that was provided when you keyed the number.

Note that one of the benefits of this system is that no work gets done without a work order. Assigning budgets from either an AFE or from internally sourced overhead accounts will be a matter of selecting from budget accounts or from pre-approved allocations. The ability to approve a work order would therefore be at an appropriate level within the chain of command of the Joint Operating Committee designated through the Military Command & Control Metaphor (involving multiple producers). If a work order were to exceed its budget it is reasonable to assume that it was exceeding its AFE or account budget(s if it involved multiple producers) as well, which could trigger action from the Compliance & Governance module of the People, Ideas & Objects application, if that is what management desired or deemed necessary and established in that module.

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.

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.

The Preliminary Specification Part VII (PLM Part II)

Yesterday we discussed the Petroleum Lease Marketplaces virtual representation of the physical oil and gas marketplace. And the “User Vision”, or graphical user interface that could be used in the Preliminary Specification. In today’s post I want to discuss the general classifications of the people that will work in the Petroleum Lease Marketplace (PLM) and some of the activities they’ll be involved in.

When we look at the types of work that is carried out in the PLM we see a large group of administrators working within different areas within a producer firm. Whether it be the Land or Legal department, Production or Exploration Operations staff or Accounting people; all of these groups have an interest in the information, people, assets, documents, processes and functionality contained within the PLM.

The primary concern of the people in these groups is the information and data contained within the module. It’s accuracy, access, and use by those within their firm, but also within the Joint Operating Committee’s that their firm has an interest in. Some of this data will be similar to the data that is held by their firms partners, and much of the data has been generated in a cooperative and collaborative manner by those partnerships.

For example AFE’s, Mail Ballots, agreements, are generated through interactions by each of the participants in the Joint Operating Committee. How much of this data and information could therefore be held by the Joint Operating Committee with an interface to the firm, is a question that should be answered with significant research during the Preliminary Specification. To answer that question would also answer; for whom do those people we mentioned, work for. The implications would be significant.

One of the greatest opportunities that we have in developing this system is to address the division of labor and specialization. To take these people’s work and to reorganize it across the industry, so that it was focused on the Joint Operating Committee but very specialized in terms of the tasks that they conduct. And apply those skills across the entire industry, or a geographical region, or some other classification. Is something that could provide significant increases in oil and gas industry productivity and overall cost savings. That is to say that an individual would work for a process that is billed to 1,000 Joint Operating Committees that might represent 200 Companies.

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.

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.

Phase Two Proposal

It seems odd to suggest that a start-up software company would have a multi-billion dollar capital project on hand as its first task. People, Ideas & Objects (PI&O) is such a start-up software company, however, we are also adopting many of the attributes of a project management organization. Undertaking a large project of this scale and scope is not something that is unusual for a project management office to undertake. Combining and focusing the resources of industry to build the software described in the Draft Specification therefore is not that unusual.

When we look at the task at hand from the project management perspective it doesn’t seem so out of place. Phase Two looks to build the Preliminary Specification and build the beginnings of the organizational infrastructure necessary to project manage the software development through the Detailed and Final Specifications. An organization with the people needed to carry the weight through the various phases of development and then through the subsequent iterations.

Most project management organizations are focused around an engineering task. Whether that is a building a gas plant, an offshore rig or some other asset that needs to be built to a certain specification. The project management organization is the ideal means to generate the one-off type of large scale development.

People, Ideas & Objects is engineering focused and fits this form as well. There is a few unique attributes that make this quite different from most project management organizations. The first is that there is a high level of maintenance of the software code. A large service organization will be needed to maintain the application on a day to day basis and this will be maintained by PI&O and through our proposed Hardware Policies & Procedures.

Secondly, most engineering focused projects are done for the ultimate ownership of the payor. PI&O is different as this project is initiated by myself, and therefore I have earned the Intellectual Property (IP) rights. That IP is needed to raise the fees from producers, organize the community and focus the financial resources on one solution.

Lastly ownership of PI&O has to remain third party to all of the producers. No other producer will be interested in using a solution that is owned and operated by Exxon, Shell or any other producer. This third party nature maintains an objective means in which to deal with the needs of all of the producers in a fair and equitable manner.

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.

New Position, President

Thinking through the organizational structure of the People, Ideas & Objects management. I have come to the conclusion that with the work that we are undertaking here that it would be better to have some additional “bench strength” in the executive. That is why I am creating the position of President, a role that I was to previously fill, to help round out the team.

The position of president will be an officers position and will involve this individual providing their strengths in areas where the firm needs more resources. When we think about the type of work that we are undertaking, the probability that we are finding areas that need attention are many, and the manner of that attention is not minor in its importance. The ability to put an officer on the situation and get it up to speed quickly would be a great help to the organization.

So that is what we are going to do. The position of president of People, Ideas & Objects will be added to the list of individuals that we will be looking to add to the organization once we secure our budget. These positions are open to all that may wish to apply for them and are permanent full time, or available as secondment from our participating 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.

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 on Governing Joint Ventures

As I promised yesterday, this McKinsey article on governing joint ventures has to reside in any one's top ten list of favorites. The work that we are doing in People, Ideas & Objects (PI&O) is moving the compliance and governance frameworks of the hierarchy into alignment with the Joint Operating Committee’s legal, financial, operational decision making, cultural, communication, innovation and strategic frameworks. To do so provides us with greater speed and accountability from an organizational point of view. This has been difficult to tangibly quantify and qualify. That is until this McKinsey article.

Comparing the governance of both the standard corporate model and a generic joint venture. McKinsey provides a strong contrast of the opportunities and issues that we face in aligning the innovative oil and gas producers nine frameworks under the PI&O software. Noting in the paper that we not only attain greater speed and accountability but;

Despite the differences between wholly owned businesses and joint ventures, many of the basic tenets of good corporate governance can—and should—be applied to both. The principles discussed here might be seen as the minimum needed to promote accountability, speed, transparency, and, ultimately, performance.

The article recommends specific actions be taken to enhance the governance of joint ventures. These include;

• Appoint at least one outside director.
• Designate lead directors or a strong chairperson.
• Review and reward the performance of board members.
• Sponsor an external audit.
• Create a real challenge process. (Rigorous reporting and review process.)
• Let the ventures CEO run the business.

These are all excellent points of discussion on how the governance of the Joint Operating Committee could be handled in the Preliminary Specification. The community will need to take recommendations like these and determine what specific actions and processes need to be included in the specification. I could see the governance model being somewhat of a checklist of functionality and process management that the partners could agree upon. The PI&O software then providing that level of governance for the JOC. These are the decisions that the community has to make and why the producers are such a critical part of the discussion.

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.

McKinsey, Five Misconceptions About Productivity

One of the benefits of a six month sabbatical is that we have aggregated many articles from McKinsey and others that pertain to the work we are doing at People, Ideas & Objects (PI&O). These articles are ideal for weekend postings and will enable us to fill out several months of weekends blog posts. In this first post McKinsey have an article entitled “Five Misconceptions About Productivity”

In oil and gas we are primarily concerned with the productivity of earth scientists and engineers. Specifically their ability to find and produce more oil and gas. These people’s ability to produce more energy is challenged today by steep decline curves and the challenge of finding the reserves. Since 2005 the world’s oil production has remained somewhat static and its unknown what influence OPEC may have been able to impact the market. Nonetheless the valuable energy resources require significantly greater volumes of science and engineering per barrel of oil produced. These science and engineering resources are somewhat limited in their volume and the capacity to increase them is very difficult, therefore we are left with the need to increase their productivity.

In today’s marketplace we thankfully have the means at our disposal to significantly effect the productivity of our organizations. In 1776 Adam Smith determined the division of labor was able to lead to higher productivity. Division of labor is the source of all economic output. That is to say that through successive reorganizations and application of the principles behind the division of labor we have been able to reach the level of economic activity we enjoy today. Therefore to expand the output of the oil and gas industry, which we can all agree is required, will require that we reorganize ourselves to achieve a higher level of economic output.

As the industrial revolution had a significant impact on our quality of life, the coming Information & Communication Technology revolution will have a significant impact on the output of our organizations. This is the opportunity that this community has in hand with PI&O. In this McKinsey article they point out a number of misconceptions about productivity, the one that stands out for me is;

Productivity is only about efficiency and is designed to bolster corporate profits.

Productivity can come either from efficiency gains (such as reducing inputs for given output) or by increasing the volume and value of outputs for any given input (for which innovation is a vital driver). The United States needs to see both kinds of productivity gains to experience a virtuous growth cycle in which increases in value provide for rises in income that, in turn, fuel demand for more and better goods and services.

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 PI&O. 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 PI&O 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.

Copyright License

On Wednesday of this week we discussed the copyright notice that was issued to the producer firms. This post deals with the politics of the copyright license and how the end users, developers, members of the Community of Independent Service Providers and those generally needing to be involved in the application have access to the Intellectual Property (IP) that makes up the research, copyright and software developments of mine, Paul Cox, as licensed to People, Ideas & Objects (PI&O).

Two key questions that have to be solved in this project is firstly, how is the greater community supported. And the second question is; how do we ensure that everyone is able to innovate without any legal impediment, and have free access to the intellectual property that makes up People, Ideas & Objects IP. Two difficult and important questions that this blog post will answer.

Answer to question 1
The answer to the first question of how this community will be supported is of course by money. That is the only way in which a long-term, difficult project such as this can survive. No one can be asked to put in the effort necessary on a volunteer basis as that will begin with a bang and fade at a critical time. Only with the appropriate means to source the financial resources to support the community through out the life of the project will this project be successful. And being successful is the only manner in which we will be able to attract the people that we need in order to make the project ultimately successful.

So the question remains how is the project sustained financially. I as the owner of the intellectual property have the sole right to assess the oil and gas producers the fees and penalties, as noted in the Revenue Model, that will sustain these communities. Payment of those fees by the producer is the price they pay for participation in the community. Individuals are free to participate as they wish. In fact they are paid for their approved efforts. Producers must pay their fees in order to participate and have their specific needs addressed, and ultimately use the software. I then in turn use that money to support the community and develop the software based on the budget that the community agrees to. If the community requires a larger budget, then the $ / barrel of oil equivalent assessment to the producers will rise or fall based on the size of the number of participating producers who have subscribed to People, Ideas & Objects.

Answer to question 2
As to how the innovation and creative solutions are developed within the community. This work can not be obstructed by the IP that is the basis of People, Ideas & Objects offerings. It is through the license provided to those that work within the community that provides them with the opportunity to work with the IP without concern for the legal consequences normally associated when dealing with IP.

This license grants unrestricted access to my IP and generates service fees for yourself, I only assess the producers for software and software development fees. In turn any innovations or developments of IP are added back to my IP which in turn then become available to everyone. This eliminates any potential cross licensing and trolling by individuals within the community, which would make the development and innovation of the software and services secondary objectives. Licensees within the community have a right to generate service revenues in an unencumbered fashion in a competitive marketplace. This provides producers, individuals and society with the optimal solution for dealing with the underlying intellectual property of this project.

The following is a general comment about the means of competing in the Information and Communication Technology (I&CT) marketplace. There is much discussion about the new versions of Apple software products and the stepping on some of their developers toes. The overt development of features that have been provided by small software providers, by larger vendors such as Apple is something we have seen many times before. The group with the fattest wallet usually wins these contests. To compete on the basis of a defined software feature set is a fools game. Unless of course you have the fattest wallet. What is needed to win in the 21st century is a new basis of competitive strategy, and that is on the basis of IP. You must have an idea that is unique that defines your product differently in the marketplace. With People, Ideas & Objects that of course is using the Joint Operating Committee. Licensees within the People, Ideas & Objects community have access to the IP that enables them to compete in services based on using the Joint Operating Committee as the key organizational construct of the innovative oil and gas producer.

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.

S + B, Stop Blaming Your Culture

Over the past few years of this blogs discussion around the impact of the Draft Specification, and the use of the Joint Operating Committee as the key organizational construct of the innovative oil and gas producer. And how these changes would have an impact on strategy at the producer firm.  We have discussed many specific points that include;

• a firm is able to employ different strategies for individual JOC’s based on the optimal strategy for each property. 
• each producer within a JOC can pursue their own individual strategy irrespective of the strategies used by the other participants. 
• the strategies are unique to each firm and are mutually exclusive, based on the unique asset makeup of each individual producer. 

What today’s post realizes, suggests or otherwise makes known is that the Joint Operating Committee is also the Strategic framework. So when we state that we are moving the compliance and governance frameworks from the hierarchy to the legal, financial, operational decision making, cultural, communication and innovation framework of the Joint Operating Committee, we can and should include the strategic framework as the seventh framework of the Joint Operating Committee.

Booz & Co’s periodical Strategy + Business have an article entitled “Stop Blaming Your Culture” that pairs the cultural and strategic frameworks.

Leaders like Gray understand the value of an organization’s culture. This can be defined as the set of deeply embedded, self-reinforcing behaviors, beliefs, and mind-sets that determine “how we do things around here.” People within an organizational culture share a tacit understanding of the way the world works, their place in it, the informal and formal dimensions of their workplace, and the value of their actions. Though it seems intangible, the culture has a substantial influence on everyday actions and on performance.

The Joint Operating Committee is culturally systemic throughout the oil and gas industry. It establishes the basis of the culture for the legal, financial, engineering, geo-technical and every other individual that works within the producer firm. The partnership, which is the JOC, has the rights and opportunities embedded within the culture of how the industry operates. People, Ideas & Objects is using this culture, capturing it within the software we are proposing to build in the Preliminary Specification. But the question is how does this affect strategy?

Importantly Booz & Co make the following statement.

When a new leader’s strategy puts the culture of a company at risk, the culture will trump the strategy, almost every time.

Therefore, the Joint Operating Committee, being the cultural framework of the industry has significant influence on the strategic framework of the oil and gas producer. This is in addition to the JOC being the strategic framework itself. This would imply that the global or overall corporate strategy, since it may not recognize the culture of the partnership or JOC, will fail when it does not consider the JOC’s culture.

What I am suggesting here and is being enabled in the Draft Specification may seem unreasonable. Having a unique strategy for each participant in each JOC seems to be inconsistent with efficient and effective management of the oil and gas resources of the producer firms. I would argue that each producer needs to focus on the optimal strategy for each JOC in order for the property to be optimized from an innovation and financial return point of view. Nothing short of this strategic focus will provide the producer with the ability to mitigate the risks and realize the opportunities of the oil and gas business.

The alternative open to the producer would be to change the culture of the firm. Which would involve removing the JOC from their operations, which I would wish them the best of luck.

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.

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.

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.

Technorati Tags: People's Change Exploration Energy Innovation Management Organization Strategy

Professor Giovanni Dosi, Part II

In this the second part of our review of the Preliminary Research reports summary of innovation. We note Professor Dosi’s key factors of innovation, and its application to oil and gas. One of the breakthroughs that was determined in the Preliminary Research report was the use of revenue per employee as a means of determining what the producer firm and / or Joint Operating Committee could use as a determination of its level of innovativeness.

In determining the key factors of innovation Professor Dosi notes:

The search, development and adoption of new processes and products in market economies are the outcome of the interaction between:

• Capabilities and stimuli generated with each firm and within the industry of which they complete.

and

• Broader causes external to the individual industries, such as the state of science in different branches, the facilities for the communication of knowledge, the supply of technical capabilities, skills, engineers etc.

Additional issues include the conditions controlling occupational and geographical mobility and or consumer promptness / resistance to change, market conditions, financial facilities and capabilities and the criteria used to allocate funds. Microeconomic trends in the effects on changes in relative prices of inputs and outputs, including public policy. (regulation, tax codes, patent and trademark laws and public procurement.)

Based on the capabilities and stimuli of innovation present in the oil and gas sector, particularly the microeconomic effect of the commodity prices, it is reasonable to conclude that oil and gas would be an area where significant innovation can and needs to occur. The primary reasons for the future enhanced innovation is due to the following analysis of the industry.

The capacity to enhance reserves is significantly more challenging than as little as five years ago. Exploitation is generally expected to continue, however, an enhanced role for various degrees and types of exploration is expected to commence. The energy frontier brings many new risks and complexity in the area of technical, political and the environment. These account for much of the changes in stimuli and capability that Professor Dosi states is required to facilitate further innovation.

Secondly, microeconomic trends associated with changes in the relative prices of outputs. Oil and gas prices are beginning to reflect the scarcity, importance and value of the commodities to society.

To attain concurrence on these factors of innovation would be easy. What is needed in oil and gas is a measure of innovativeness that could be applied to the oil and gas producer or to a specific JOC. As was mentioned in the opening paragraph of this post, the Preliminary Research determined that an appropriate measure of innovativeness is the revenue per employee of a producer firm or JOC. Differences in performance are imputed to be the overall net result of the investments, both organizational and science based capabilities, and innovativeness of the firms. To make an effective change in the revenue per employee requires a substantial effort to increase the output of the firm or JOC. We will contiue to use and elaborate on this factor throughout our remaining review.

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 Review Innovation Dosi Organization Research

Eliminating the Conflict

In the Preliminary Research Report, in addition to the advantages of using the Joint Operating Committee (JOC) we listed the disadvantages of the conflict between the JOC and the traditional hierarchy. What becomes clear in listing these disadvantages, is the overriding focus on compliance and governance by the hierarchy. Tax, SEC and Royalty requirements at times appear as the sole focus of the organizations. The operations within the JOC are a distant second in terms of dealing with the business of the producer.

I am speaking of course from the business perspective dictated by the use of the ERP system of the producer, not the technical perspective of the earth science and engineering production operation. The separation between the administration and the earth science and engineering focus within the producer is something that is being eliminated in the Draft Specification. Lets call this well known phenomenon of “no one reading from the same page”.

Oil and gas operations are unique based on their geographic and geological makeup. Applying blanket corporate strategies to these operations was possible in the easy energy era. In today’s marketplace the need to have unique operational strategies for each oil and gas property is a necessity and is accommodated in the Draft Specification. What is not needed is the conflict and confusion within the producer that is as a result of no one reading from the same page.

One of the breakthroughs from the research People, Ideas & Objects has conducted is that the differing operational strategies that are employed by each of the producers in a JOC are possible and appropriate. Each producer has a unique make up of assets and strategies and those can be enabled through the use of People, Ideas & Objects Draft Specification. Without the systems needed to support these differing strategies, the confusion and conflict will only grow, potentially in exponential ways.

The conflict between the separation of the compliance and governance of the hierarchy and the five frameworks of the JOC are reflected in each of the following points.

Introduces political and bureaucratic conflict.

This is the first and most damaging aspect of no one reading from the same page. When strategy, operations and administration are all moving in different directions within the organization, conflict is the result. The solution in the Draft Specification is provided by moving the compliance and governance from the hierarchy and aligning them with the legal, financial, operational decision making, cultural and communication frameworks of the JOC.

Compromises and muddles internal decisions.

What may be ideal strategy to optimize the property may be unknown to many of the decision makers within the producer firm. The operational decision making resides with the JOC. The decisions made by these organizations are not communicated effectively through the producer firm. Time necessary to make decisions and the bureaucracy have the effect of slowing the capacity of the producer.

Lacks the direct support from the hierarchy.

When no one is reading from the same page, it seems that the administration is moving in different directions from the technical groups. For cost reasons, having everyone reading from the same page isn’t a luxury but a necessity.

Successes and / or failures are not identified, shared or learned explicitly by any of the participating organizations. Knowledge is held tacitly, limited amounts of knowledge is codified or make explicit.

As decisions and strategies are confused, the ability to learn from the decisions is lost. Innovation is an iterative process based on the success and failure and the history of the property. In a science and applied engineering business that requires more scientific effort for each barrel of oil produced, the decision history and understanding of the underlying knowledge of the property become necessities.

Eliminates initiative and innovation. No tolerance for risk taking or experimentation that is required for innovation.

Building on the previous point regarding success or failures, when no one is held accountable for the decisions that were made, initiative and innovation fall to the sidelines.

No regulatory or internal financial reporting requirements.

The standard reporting of an interest in a JOC is fairly standard. People, Ideas & Objects have published a Technical Vision of how Information Technology will change in the near future. This Technical Vision foresees a substantial increase in the volume of data that is available to a producer. With the Performance & Evaluation and Analytics & Statistics modules, the producer can expand their use of this data in innovative ways.

The hierarchically based organization is an impediment to future progress.

This has been discussed by many. Although People, Ideas & Objects subscribe to this thinking, we are offering a viable solution by recognizing the Joint Operating Committee and developing an alternative governance structure in the Military Command & Control Metaphor in the Draft Specification.

Capacity to replace reserves has become logistically, operationally and organizationally constrained.

The long term perspective of a producer firm is reflected in their reserves. To expand their reserves a producer has a scientific capability, that in addition to their reserves, are its critical competitive advantages. These capabilities are the differences between success and failure.

Capacity to meet the market demand is diminishing.

The overall effect of these points is that the ability of the industry to expand its productive capability has stalled. As the world has more people entering the middle class, the lack of market supplies of energy will bring significant societal issues to all concerned.

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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The Joint Operating Committee is Critical

Starting with today’s post we will begin a process of reviewing the data, information and ideas that makes up People, Ideas & Objects and the Draft Specification. This will provide readers with a thorough understanding of the elements that make up this project. These posts can be aggregated by selecting the Review label.

People, Ideas & Objects began with the Preliminary Research Report’s hypothesis asking “if the Joint Operating Committee (JOC), modified with today’s information technologies, provides an oil and gas concern with the opportunity for advanced innovativeness.” The critical breakthrough in the research’s conclusion is the “industry standard JOC is the “natural” form of organization for oil and gas where the participants of the committee are supported and augmented through the diversity and availability of the remaining organizations team members. A greater alignment to this conceptual model would facilitate the desired innovation.”

So if this is how the industry operates why does it need People, Ideas & Objects Draft Specification, its software development capability and associated user communities? The difficulty is that today’s ERP systems do not recognize the existence of the Joint Operating Committee. This stands in contrast to the fact that the JOC is the legal, financial, cultural, communication and operational decision making framework of the industry. Every internal and external process of a producer tacitly recognizes these frameworks. However, the organizational focus has become centered on the compliance and governance frameworks of the royalty, tax and SEC requirements of the producer firm. What the Preliminary Research Report determined, and the Draft Specification implements, is the movement of the compliance and governance frameworks into alignment with the five frameworks of the JOC.

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 Development Governance Innovation Leadership Organization Research

McKinsey Ten Technology Trends Part I

McKinsey are once again focusing on the impact that technology will have on organizations. This new article entitled “Clouds, Big Data and Smart Assets: Ten Tech-Enabled Business Trends to Watch” and sub-titled “Advancing technologies and their swift adoption are upending traditional business models. Senior executives need to think strategically about how to prepare their organizations for the challenging new environment.” For the past while I have been closing these blog posts with the comment that management are conflicted and will not make the necessary changes to financially support these developments. Here McKinsey is putting the decision to move to adopt these technologies at the foot of senior executives.

As the worlds premier consulting firm, McKinsey have added substantially to the discussion of applying technology to organizational change.

The ways information technologies are deployed are changing too, as new developments such as virtualization and cloud computing reallocate technology costs and usage patterns while creating new ways for individuals to consume goods and services and for entrepreneurs and enterprises to dream up viable business models.

Again, prospective users of People, Ideas & Objects, and members of the Community of Independent Service Providers will be at the forefront of these major trends.

For senior executives, therefore, merely understanding the ten trends outlined here isn’t enough. They also need to think strategically about how to adapt management and organizational structures to meet these new demands.

1. Distributed co-creation moves into the mainstream.

Recall that we are working to detail “Phase Two” of this project. The purpose of Phase Two is to develop the Preliminary Specification which is proposed to generate a system design consisting of 100 man-years of effort. These developments will be generated from one thousand or more contributors and the entire prospective user community reviewing and influencing the output. A design such as the Preliminary Specification, which of course has not been done before, has also never been possible before.

In the past few years, the ability to organize communities of Web participants to develop, market, and support products and services has moved from the margins of business practice to the mainstream.

Producers need to be a part of this process. Determining the geographical, functional and process scope of the application are part of the Preliminary Specifications deliverable. Ensuring that the specification addresses the producers needs is the responsibility of each producer.

The time for producers to begin their involvement in these communities and developments is now. With the Revenue Model providing significant financial incentives for early participation and the ability to influence the output of these developing communities, delays in a producers participation could be costly.

2. Making the network the organization. 

Using the Joint Operating Committee as the key organizational construct of the innovative oil and gas producer is only possible as a result of the advanced networks and Information Technologies. Networks enable and facilitate the interactions between JOC partners and service providers.

We believe that the more porous, networked organizations of the future will need to organize work around critical tasks rather than molding it to constraints imposed by corporate structures.

Management orthodoxies still prevent most companies from leveraging talent beyond full-time employees who are tied to existing organizational structures. But adhering to these orthodoxies limits a company’s ability to tackle increasingly complex challenges. 

As the research that has been conducted here at People, Ideas & Objects shows, the use of the Joint Operating Committee provides a solution to many of the key issues that the industry faces.

3. Collaboration at scale.

To suggest that the oil and gas industry is already engaged in a high level of collaboration would be an understatement. The Joint Operating Committee by its definition is a collaboration. These interactions have been conducted throughout the industry for many years. What is needed is for the Information Technology systems the industry uses to capture these collaborations and embed them within the ERP systems used in the industry. That is what People, Ideas & Objects is working to provide. By adopting the advanced IT infrastructure and enabling the collaborations to be handled through the technology, the industry will be able to scale their activity and innovations to the level necessary to meet the market demands for energy.

Despite such successes, many companies err in the belief that technology by itself will foster increased collaboration. For technology to be effective, organizations first need a better understanding of how knowledge work actually takes place. A good starting point is to map the informal pathways through which information travels, how employees interact, and where wasteful bottlenecks lie.

A process that is part of the work being proposed to be completed in the Preliminary Specification. Recall as well, that tacit knowledge, the understanding of how things get done, can not be captured. It exists only in the minds of the users, Community of Independent Service Providers and employees of the firms involved in oil and gas. What we can do is design and build the tools that enable the people in the industry to use their tacit knowledge.

4. The growing “Internet of Things”.    

McKinsey highlighted their concept of the Internet of Things a few months ago. These concepts were covered in a blog post that ties McKinsey concept to the People, Ideas & Objects Technical Vision.

5. Experimentation and big data.

Experimentation is the way in which innovation in oil and gas will expand the sciences. One of the keys to exploiting the experimentation and “big data” in the industry is the Joint Operating Committees operational decision making framework. When we align these organizational decision making processes to the systems used by the innovative firms, then we will be able to use these new and valuable tools.

Using experimentation and big data as essential components of management decision making requires new capabilities, as well as organizational and cultural change. Most companies are far from accessing all the available data. Some haven’t even mastered the technologies needed to capture and analyze the valuable information they can access.

We will address the remaining McKinsey technology trends in a future blog post. McKinsey close their paper with the following comment.

The pace of technology and business change will only accelerate, and the impact of the trends above will broaden and deepen. For some organizations, they will unlock significant competitive advantages; for others, dealing with the disruption they bring will be a major challenge. Our broad message is that organizations should incorporate an understanding of the trends into their strategic thinking to help identify new market opportunities, invent new ways of doing business, and compete with an ever-growing number of innovative rivals.

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.

Technorati Tags: People's McKinsey, CISP, organization, Innovation

Our Revenue Model Part VI

Throughout the past few months (here, here and here) we have talked about the risks of becoming blind sleep-walking agents of whomever will feed us. An issue when we are discussing systems development. People, Ideas & Objects Revenue Model shows these risks are real and require a new approach to funding these software developments. It serves no ones interests, People, Ideas & Objects, the Community of Independent Service Providers, Users or Producers to proceed without dealing with this issue. It is best to identify these conflicts and compromising situations now, while the influences are manageable.

Producers are expected to fund the software developments on the basis of their production profile. Rental fees are assessed on all producers starting January 2010. This eliminates the possibility that some producers will pay disproportionate shares of the development costs. All producers will be required to have their rental fees, and penalties, paid in full from January 2010 to the current year in order to access the applications. These methods and penalties eliminate all incentive to delay and avoid financial participation by producer firms.

Financial participation is how the communities are supported and hence able to avoid the trap of becoming blind sleep-walking agents of whoever feeds them. People, Ideas & Objects are user focused developments. The choices that a software development project can prioritize are many. Users are one, technical efficiency another and there are many other possibilities. For users to support the producers focus on its competitive advantages of their asset base, oil and gas leases and earth science and engineering capabilities. Users need to have the software tools and means of production, (the financial resources to build those tools) within their control.

This discussion does not preclude the producers participation in these communities. Producers, on the contrary, are critical elements of the user community. These developments will need their full participation and contribution. What is necessary to proceed is the appropriate “political environment” in which users are able to define, build and use the software tools they need to do their jobs.

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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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.

Technorati Tags: People's Langlois Management Change Organization