Innovative Management: A conversation with Gary Hamel and Lowell Bryan.

The McKinsey Quarterly has issued a new article of interest to this blog and its community of users. Subtitled "Forward-looking executives must respond to the growing need for a new managerial model." Words that tweak my attention, and when I read the first paragraph, I know fundamentally that we are on the right track in terms of where the oil and gas industry needs to move.

"Sometime over the next decade" warns renowned strategy guru Gary Hamel in his new book, "The Future of Management," your company will be challenged to change in a way for which it has no precedent." What's even more worrisome, he argues, is that decades of orthodox management decision-making practices, organizational designs, and approaches to employee relations provide no real hope that companies will be able to avoid faltering and suffering painful restructurings.

and

McKinsey partners Lowell Bryan and Claudia Joyce, in their recently published book, "Mobilizing Minds", arrive at a similar conclusion from a slightly different perspective. They find that the 20th century model of designing and managing companies, which emphasized hierarchy and the importance of labor and capital inputs, not only lags behind the need for companies today to emphasize collaboration and wealth creation by talented employees but also actually generates unnecessary complexity that works at cross-purposes the those critical goals.

To argue their points one would be required to articulate the advantages of the hierarchy and its alter ego, the bureaucracy. Since I have been critical of this form of organizational structure, I won't be capable of arguing the point. It is clear to the majority of the world that the hierarchy was established in the 20th century and did indeed die towards the end of that century. Its existence today is an impediment to society moving forward in this new era of technology, peak oil, globalization and a wide assortment of other changes. I would challenge anyone who would argue the need for the hierarchy for the next 20 or even 5 years. The sooner we realize this, the more quickly we can adapt to the challenges that face us.

In oil and gas I have discovered fierce resistance to the ideas that I write about here. The majority of this resistance originates from the official hierarchy. Yet it is a point of contradiction that I can also appeal to the individual within the hierarchy, and its most vocal supporter, and have them willingly participate in this project. I am not asking anyone to fall on their sword and sacrifice their careers and pensions. Only to participate freely in these developments so as to ensure that their individual transition between the two organizational constructs is as profitable and as smooth for the people involved. This point does not need to be marketed or sold the people are willing. As we become more organized we will be able to continue with the construction of the software as the user moves closer and closer to their gold watch. The people that I need to appeal to are the oil and gas investor. They need to be identified so that they can see these developments are the best area and means in which they should operate their oil and gas assets. Here the McKinsey article begins the associated thought process starting with the executive.

Forward-looking executives will respond to this looming challenge, these authors conclude, by bringing the same energy to innovative management that they now bring to innovative products and services.

Why? Because they will be told to by their Board of Directors, or directly from their shareholders. When is the question that I would ask? The associated costs of this application are in the range of a few hundred million dollars. The producers today will need to see the writing on the wall before they are able to fund this development. And that is why I spend none of my time attempting to win these executives over. Its a fools game and I have a willing and able critical resource, the users, who are not confused as to where their future lies. The group that I must appeal to is the disgruntled shareholder. How much of the asset securitization debacle currently brewing in the hosing market is symptomatic of the disconnect between ownership and management. How much of this issue is associated with the shareholder being the fundamental key to the hierarchy's success? And where does the investor turn in order to mitigate these risks?

The opportunity is substantial. Against the backdrop of the digital age's dramatic technological change, ongoing globalization, and the declining predictability of strategic-planning models, only new approaches to managing employees and organizing talent to maximize wealth creation will provide companies with a durable competitive advantage. It won't be easy. As companies discard decades of management orthodoxy, they will have to balance revolutionary thinking with practical experimentation to feel their way to new, innovative management models.

In response to the first interview question "What is the opportunity both of you have identified and how did you spot it?" Gary Hamel responds;

For almost 20 years I've tried to help large companies innovate. And despite a lot of successes along the way, I've often felt as if I were trying to teach a dog to walk on his hind legs. Sure, if you get the right people in the room, create the right incentives, and eliminate the distractions, you can spur a lot of innovation. But the moment you turn your back, the dog is on all fours again because it has quadrupled DNA, not biped DNA.

So over the years, it's become increasingly clear to me that organizations do not have innovation DNA. They don't have adaptability DNA. This realization inevitably led me back to a fundamental question: what problems was management invented to solve, anyway?

When you read the history of management and of early pioneers like Frederick Taylor, you realize that management was designed to solve a very specific problem -- how to do things with perfect replicability, at ever-increasing scale and steadily increasing efficiency.

Now there's a new set of challenges on the horizon. How do you build organizations that are as nimble as change itself? How do you mobilize and monetize the imagination of every employee every day? How do you create organizations that are highly engaging places to work in? And these challenges simply can't be met without reinventing our 100-year-old management model.

Bingo, Lowell Bryan responds to the same question;

I arrived at the same point from a slightly different perspective. McKinsey asked me about 12 years ago to try to understand the impact of technology and globalization on our clients. We concluded that these forces were creating a fundamental discontinuity. Or to put it differently, that technology and globalization were creating a set of opportunities that didn't exist before.

We observed that companies were struggling to take advantage of the opportunities created by digitization and globalization because their organizations were not designed for this new world.

Responding to the question "Are the thinking-intensive industries driving what Gary is talking about?" Lowell Bryan responds;

New organizational models are needed in all industries because all companies engage in thinking-intensive work. The traditional, hierarchically based 20th century model is not effective at organizing the thinking-intensive work of self-directed people who need to make subjective judgements based upon their own special knowledge. ... That's where the value is today. The winners will be those that enable their thinking-intensive employees to create more profits by putting their collective mind power to better use.

The remainder of the interview focuses on the people and the collective brain power of an organization to solve problems. This is the objective in building this software, and I will leave it to the interested readers to download the McKinsey article by clicking on the title of this entry. (Registration required) It is important to remember this software will be built to explicitly to support the Joint Operating Committee, the natural form of organization in the industry. With the information technologies that are available today, the ability to achieve what is discussed in this McKinsey interview is possible for the energy industry. I think we should get started today.

Technorati Tags: Genesys, McKinsey, Collaboration, Organization, Strategy

Prophet of Innovation: Joseph Schumpeter and Creative Destruction.

Click on the title of this entry to be taken to the Google Book Search page for this book. I was introduced to the writings of Professor Richard N. Langlois, our key research author, through his being awarded the Schumpeter Prize in 2004, for his paper The Dynamics of Industrial Capitalism. I'll admit I have not read the Prophet of Innovation, yet, and even if I had read it, that would not have been the point of the blog entry. Harvard Professor Thomas McCraw has participated in two PodCasts in the past few months. His promotion of his book brings up a number of very interesting points about the times that we live in today. It will be worthwhile for the readers of this blog to put this book on their reading list, Professor McCraw is a Pulitzer Prize Winner and therefore, easy to recommend.

The August 9, 2007 PodCast is on "Bloomberg on the Economy" with Tom Keene. He opens the PodCast with the comment that the Prophet of Innovation is the "Publishing event of 2007, the definitive one volume of Schumpeter." The opening discussion reviews Schumpeter's life and some of the key term's of which he became famous for. Like Creative Destruction is what entrepreneurs do. Will and the "emotion of our will" in making change. How the charismatic leader is someone who is bound and determined to change things.

"Successful innovation is more a matter of will then of intellect." The shear effort necessary to carry out the tasks that face our energy industry are possibly the largest issues we have faced to date. Our way of life will be challenged by the reduction in energy production. I also think this is the point in time where mankind will stand up and prove that we can, through force of the will that Schumpeter comments on, make the necessary changes and prosper in a future that few can imagine today. This new world is right around the corner and promises to bring democratic freedoms to their highest levels attainable.
Professor McCraw's book shows how barriers that confront entrepreneurs have to be overcome, and hence this obsession or will has to be maintained throughout the adventure. Many new entrepreneur's, on the scale of Henry Ford will be needed to solve these problems. The entrepreneur's character and disposition are some of the things that Schumpeter identified and valued and McCraw has documented in his book.

The second podcast of Professor McCraw's is on October 8, 2007 on EconTalk with Professor Russ Roberts. Schumpeter was believed to be the one who first noted the role and value of vision in business. To see the future in a vision of what, where and how the changes could improve the efficiency and effectiveness of the business is a key attribute of the entrepreneur. But there is something more. Professor's Roberts and McCraw discuss the important difference between innovation and invention. Leonardo DaVinci never built an airplane. He invented it, or was at least the first to think about it. He never took the next step that is critical of the entrepreneur. "Doing the thing" is what McCraw describes that Schumpeter focused on as the key difference between innovation and inventions definitions.

The other key attribute noted by Schumpeter was the concept of the business cycle's influence in the innovative marketplace. Business fail and that is the natural way of economic progress. There was a time when people thought that businesses would never fail, however today we know that not to be the case. The difference is the founding entrepreneur is consumed by a feverish perseverance that drives the business further then the competitors. Succession of the business, whether through the family or size, can not capture this fever and therefore makes the business susceptible to failure.

Who will be the leaders and entrepreneur's in this new era in energy. We do not know. I am certainly doing all that I can to ensure the most efficient organizational structure is supported by a highly capable software development team so that those entrepreneur's can operate as efficiently as possible.

Technorati Tags: Genesys, Reference, Research, Schumpeter

MIT Energy Council on MIT Video

I am extremely disappointed with the direction of MIT's Energy Council. MIT President Susan Hockfield made a video update; you can view the video here. I originally wrote about what I thought about their focus and direction here. It now appears they have lost that focus and hence are lost on the real issues. Talking more about the concern for CO2 and alternative energies are blind, dark bunny trails for those that don't understand the real point. Coal, oil and gas make up the majority of the sources of energy and will continue to do so. The ability to meet market demand for energy is not sustainable and a world class leadership from the likes of MIT would have made the journey a little easier. It is now clear, in this almost incoherent one and a half hour presentation, nothing of material value is being done on energy issues at MIT.

Technorati Tags: Genesys, Video, MIT, Team-Failures

The Nobel Prize in Economics

This past Monday the Nobel Prize in Economics was awarded to;

Professor Leonid Hurwicz

Professor Eric S. Maskin

Professor Roger B. Myerson

The title of this entry will take you to the two minute summary of "Mechanism Design" on nobelprize.org, clicking on the Professor's name will take you to a brief telephone interview where the Laureate describes their area of research. The prize was awarded for their work in "Mechanism Design", an area of research that is related to game theory and one that assumes the Nash Equilibrium. (Professor John Nash, 1994 Nobel Laureate.) Mechanism Design involves the researching, building and testing of rules and frameworks to ensure an equitable or fair distribution of economic externalities.

The best example of the theory is described in Alex Tabarrok's Reason Online article about two kids and a pie. The problem is how do you distribute the pie fairly so that both of the kids are satisfied with the outcome. A simple example of Mechanism Design implements the rule that the first kid cuts the pie and the second kid chooses his piece first. This process ensures that the cut is as equitable as possible. Mechanism Design is involved in establishing the ways and means of distributing resources.

The best source of information on the Nobel Prize laureates has been "Bloomburg's On the Economy podcast with Tom Keene". You can subscribe to the podcast on iTunes here, I highly recommend it. The next best is an article by Pete Boettke in yesterday's Wall Street Journal and is well summarized on his blog The Austrian Economists.

Here are Boettke opening paragraphs:

Yesterday Leonid Hurwicz, Eric Maskin and Roger Myerson won the Nobel Prize in Economic Science for their pioneering work in the field of "mechanism design." Strangely, some have used this occasion to disparage free-market economics. But the truth is the deserving recipients owe a direct debt to free-market thinkers who came before them.

Mechanism design is an area of economic research that focuses on how institutional structures can be manipulated by changing the rules of the game in order to produce socially optimal results. The best intentions for the public good will go astray if the institutional arrangements are not consistent with the self-interest of decision makers.

Finally I want to highlight two podcasts on Bloomberg. Professor Paul Samuelson's comments on the new Nobel Prize Laureates. Samuelson won the Nobel in 1970 and is 92 years old, the efficiency of his comments reflect his wisdom and skill in discussing economics in easy to understand terms. The second podcast of very high interest is of Professor Thomas Schelling who won the Nobel in 2005 for "enhancing our understanding of conflict and cooperation through game-theory analysis". Author of one of my favorite books "The Strategy of Conflict" Schelling's lectures are the most profound and stimulating that I am aware of.

So in terms of this research that we are doing here, using the Joint Operating Committee as the key organizational construct of the industry, we will need to open a new vein of research in "Mechanism Design" for the development of this software.

Technorati Tags: Genesys, Mechanism-Design, Research

ASPO USA Conference

This week Houston is hosting the Association for the Study of Peak Oil & Gas - USA's (ASPO - USA) conference. Appropriately the conference is sub-titled "Energy, the First Challenge of the 21st Century". This conference may be the key turning point in the discussion of peak oil. Where talk turns to the actions needed to mitigate Peak Oil. Unfortunately I will not be there, but if I were, I would hope I could assert that one of the necessary actions would be to design and begin building the software for the industry operations.

The hierarchy is not an organizational structure that has been designed or built for the 21st Century. My question would be, what type of organization is necessary to address these problems? If we expect to approach this issue with any type of constructive speed or innovativeness we must first design that organization and build the software that supports it. The reality today is that software needs to be built first, or alternatively, choose manual systems. This organizational paradox is resolved when the software exists to support the transactions and processes of the innovative oil and gas producer.

Are we fully aware of the extent and level of dependence our actions are dictated by the IT we use? If I were to approach the "First Challenge of the 21 Century", I would start by designing the software. The organizational structure I recommend the industry use is the industry standard Joint Operating Committee (JOC). It is the legal, financial, cultural and operational decision making framework of the industry. All of the tacit knowledge of the industries operations is codified in that organizational construct. If we augment the Joint Operating Committee with today's Information Technologies, collaborative systems and a dedicated software development team, the JOC can align its frameworks with the Compliance & Governance frameworks of the environments we do business in. A system built to facilitate innovation and enable speed, everywhere and always in the earth sciences and engineering disciplines. Join me here and lets take action on our First Challenge of the 21st Century.

Technorati Tags: Genesys, Peak-Oil, Ideas, Innovation

Internet Scale Identity, Collaboration, and Higher Education

Click on the title of this entry to be taken to Google Video for this presentation. First off a stern warning, the topic is a difficult one to discuss and the presenters do not do a very good job at it.

Firstly Bob and Ken do not adequately describe who they are or where they are from. The Internet 2 association consists of the majority of the university and other organizations, like Google, dedicated to "Providing both leading edge network capabilities and unique partnership opportunities that together facilitate the development, deployment and use of revolutionary Internet Technologies." Bob and Ken work in the "Internet 2 mid-ware initiative". Their presentation is about identity and its importance in collaboration and determining the validity of the party you are dealing with. Extending this to the type of collaborative interactions that will eventually be held in this application, and currently being specified in the People, Ideas & Objects Security Module, how are you assured that what is represented online is factual? There needs to be a method in which people can verify their identity and carry that with them through the day to day interactions discussed here in this application. The Federated Identity is described as follows.

Federated Identity

• Enterprises exchanging assertions about users.
• Often identity based but can provide scale and preserve privacy through the use of attributes.
• Real time exchanges of standardized attribute / value pairs.
• Basis for trusting the exchanged assertions via common policies, legal agreements, contracts, laws, etc.
• Federations offer a flexible and largely scalable privacy preserving identity management infrastructure.

As a user of this system it will occasionally be necessary to find a welder in the area that you have production. How do you engage and ensure that the welder has the correct certification for operating in H2S environments. Conceivably the ticket that was issued to the welder for H2S operations would be available from the granting agency. The welder's "Federated Identity" would have the certificate issuer represented in the welder's Identity and the certified issuer would have the right to revoke it if for some reason the welder no longer qualified. This certification is assured at the point of initial contact with the welder. If the Federated Identity were for an individual, a company or a Joint Operating Committee (JOC) one could easily assure that the conduct of online interactions were assured to be valid. The inability to authenticate would preclude the user, company or JOC from conducting any further online transactions.

This style of interaction is currently being done in manual systems. Based primarily on past history, the user will call the welder up that finished the last job of his and not much more is done. And there is not much more that would happen in this virtual environment that I am talking about here. What is different is that a level of automation that eliminates much of the time wasting processing that is done in the manual style of systems. If the Federated Identity has enough terms and conditions that are necessary for the firm to hire that welder, they should be able to complete the majority of the contract prior to the issuance of the purchase order, which of course would also be the next step in this automated process.

These types of systems are being developed now not only for Internet2 but also for participating firms such as Google in their Google Apps for Education. Since we use Google Apps for People, Ideas & Objects, this type of Federated Identity is being built in the Security Module Specification that I am working on. The interactions are also an element of People, Ideas & Objects Compliance & Governance Module specification noted here. With the effective pooling of the participating producers human resources, requiring the Military Command and Control Style of organizations, these identity based interactions will be able to take on a dynamic matching of skills and function. One other area in which the Federated Identity satisfies is on the need to know basis. Even though all participants are from different companies their is no unnecessary leakage of information that would not have been pre-authorized to any other participant, individual or JOC.

The authors noted an Apache open source software "Shib 2.0" is capable of these types of Federated Identity and Shib 2.0 has just moved into beta. Much of the Federated Identity's ability to do these is contained within the "Technical aspects of Federations".

• Federating Protocol
• Enterprise signing keys
• Meta-data Management
• IdP discovery service
• Enterprise Identity management practices.

Accreditation and certification are needed, and also difficult to achieve. The most difficult aspect is what is referred to as "Many to many user centric identity". The presenters were wise to point out the two methods, "multilateral" and "bilateral" means of achieving accreditation and certification. By using multilateral accreditation you achieve the Many to Many user centric identity without having to accredit every transaction, query or specification as bi-lateral, or one to one, certification requires. The presenters noting "Commonly manage which identities and which attributes can use the capabilities of the collaboration tools." And "Can offer delegation, privacy management, maybe even diagnostics."

To view some of the areas in which Federated Identity is currently operating see InCommon and the Internet 2 wiki.

Technorati Tags: Genesys, Security, Collaboration, Google

Jeffrey Immelt on MIT Video

Jeffrey Immelt is the current Chairman of General Electric. His video presentation is at the MIT Energy Conference. This is a very good video and I would encourage anyone to watch it for the unique perspective and insight that Immelt has. Click on the title for the url to the video.

Speaking about the difficulties in the energy field, Immelt noted that "market signals don't fit the time horizons", and I have to agree that is certainly the case. The three-months time frame that the capital markets operate within is not enough time for the energy industry to do anything. And the decades long lead times for satisfying the demand for energy are two areas where this disconnect happens. With such long lead times necessary to achieve anything in oil and gas, the markets always seem at odds.

He also spoke of the "notion that energy is free". This notion that he speaks of is, I think, is the same concept that makes people expect they have the right to energy. I hope that we can continue to experience these rights and entitlements; however, I think that our future holds occasional energy outages and increased costs.

Immelt noted from his personal experience in traveling to India that demand for energy from China and India would not stop growing. In satisfying the needs for energy he states, "This is the time that technology and innovation can have a value". He felt that coal, natural gas and oil were going to be as important as they ever have been. And noted his turbines where operating at 65% efficiency, and indicated that reducing consumption was an area where much innovation and savings would occur.

He finished his presentation with two of what he calls "Immelts".

If you want to do something, you have to do something.

and

You want it bad, you get it bad.

Technorati Tags: Genesys, MIT, Video, Energy, Environment

BP announces reorganization.

Things are not as rosy as the $80.00 oil prices would make it appear. The new CEO of BP Tony Hayward is on record as stating that a re-organization is required. He wants to reduce the number of reporting levels from 11 down to around 7, and intends to do so on the basis of the need to manage its "dreadful" performance. Staff cuts were not expressly stated however Hayward noted "There is massive duplication and lack of clarity of who does what".

Recall BP's recent operational concerns have included a fire at a Texas refinery and pipeline leaks in Alaska. Financial performance appears to be following the operational difficulties and BP's stock was affected today by the comments of its CEO. It would appear to me that the organizations has not only duplications as it's problem, but some areas where no one is watching. Cutting the bureaucracy will most probably prove to be the wrong direction in terms of the safety of its employees, contractors and public in general.

A change in the organization requires a change in the software. This is a fact of life that we live with today, but many of the largest corporations consider that software is just a cost of doing business. Its not, it is the life-blood of the organization, and rolling in another version of SAP is the safest approach to career security. Any organizational changes not directly mirrored by similar changes in the software will lead a company to continue on in the same futile vein as BP has.

There is another important point that I want to highlight here, and that is the role of the user in making sure that the software is what is required. What does SAP know and understand about pipelines and miscible floods? I think the BP situation, with all the failures and problems, is symptomatic of too many organizational changes that were not planned, developed and implemented from a software point of view. The "duplication and lack of clarity" and "operational failures" are the two extremes of the same problem; the software is not functioning, as it should. And the software is not functioning because the user was never asked, involved, consulted or expected to define the requirements of the systems they need and want to do their job.

The hierarchies' life expired in the 20th century. Approaching this problem with the same tools of the 1970's and 1980's appears wrong to me, and certainly not the solution to the BP problem. Have we exceeded the collective imagination of the CEO's and managers of our allegedly greatest companies? What does Hayward and those involved with BP think will occur as a result of the compression of 4 management levels?

If the firm is unable to deal with the operation today, what does that spell for the future? The industry will need to perform at a higher level very soon, and in the near future it will only become more difficult. Contrast today's headlines with what we should be learning from these organizations. We don't hear the news that the industry is moving forward with greater technical achievements and major discoveries, only news that reflects they are stuck in a time and place where nothing positive ever seems to occur.

Technorati Tags: Gensys, User, Software, Failure

Modularity, Transactions, and the Boundaries of Firms: A Synthesis

Professor Carliss Y. Baldwin of Harvard University has published a new working paper. The title "Modularity, Transactions, and the Boundaries of Firms: A Synthesis" (available here) provides an excellent opportunity for me to review these topics. I intend to use Professor Baldwin's synthesis as a summary of the work that we have done in reviewing Professor Langlois working papers. I had also reviewed a prior working paper of Professor Baldwins, located here.

In the past I have been able to specify a modular specification, defined roles of both the Joint Operating Committee, the corporation and a method of how compliance and governance (Military Command & Control Structure) is achieved. I trust that reviewing the article by Professor Baldwin will enable me to build upon and re-publish these specifications with the changes learned through the review.

This first table designates the area of primary and secondary responsibility. The boundaries of the firm and market can be discerned through this table, the "Market" is for all intents and purposes the Joint Operating Committee (JOC).

Construct	Market	Firm
Joint Operating Committee	P	s
Military Styled Command and Control (Governance)	s	P
Transaction Costs	s	P
Production Costs	P	s
Innovation	P	s
Routine, compliance and accountability	s	P
Research	s	P
Development (the D in R&D)	P	s
Financial Framework	P	s
Legal Framework	P	s
Cultural Framework	P	s
Operational Decision Making Framework	P	s

P = Primary
s = secondary


A summary of our current module specification.

• Access Control and Collaboration
• Security specification
• Google Apps for People, Ideas & Objects
• Partnership Accounting Module
• Petroleum Lease Marketplace
• Resource Marketplace
• Financial Resource Marketplace
• Compliance & Governance Module
• Research and Capabilities Module
• Knowledge and Learning Module

A module summary with some detail can be found here.

Technorati Tags: Genesys, Baldwin, Langlois, Modularity

A user vision.

This next week I want to continue to discuss what a successful software application needs in terms of its user involvement. Without extensive user involvement you end up with applications like SAP. This next week, I hope to explain a lot of what, where, why, who, when and how a user will work in the development of this software application. I also want to appeal to the people that want to do something about the current slow pace of recognition of this looming Peak Oil crisis. Those people that know we have to change, but also know that change has to be planned, and software built before we make any changes to the organization. If we ignore the fact that software defines the organization, any changes not supported in the software will render us to use manual systems.

I will start this week with a summary of the overall user vision of this application that will be built here at People, Ideas & Objects. With that in mind lets begin by stating some of the ways that I see that work may soon be carried out in the oil and gas industry.

...Mandatory attendance at the office for working hours has quietly faded into the background with not much management friction, or heavy pushing from those that have benefited from the elimination of long commutes. Anytime there is a meeting, they appear to be sporadic events that just seem to happen, and most of them being virtual. Face to face meetings almost never happen at the office but at a restaurant or Starbucks. The times where an office is required is usually for large groups using conference and meeting rooms. The downside of this is that work may happen at any time of the day, but most of it easily schedule-able within your calendar.On-line use of the systems developed by People Ideas & Objects helps to collaborate with all of the people that are gainfully employed in the industry and have access through the system. The management, administration and commercial areas of the industry are managed through the applications interface. Years ago you may have been doing production accounting related work which required you to report the production from one facility. Now most of that work has been automated and your job has evolved to where your specialization requires that you interact with any and all producers / owners with production from the sandstone formations of the early Cretaceous period, your teams specialty. Your last "job" was in production accounting doing administrative work and your current role has 20% of those elements but on a much larger scale and volume of data. The engineering and systems related elements of your work make it unique and diverse, depending heavily on your background, education and training. Oddly enough the math and statistics courses you took are the skills that are most heavily relied upon during the day.

Working mostly in the U.S. and Western Canada, your contacts are mostly virtual and you frequently collaborate with your clients, the partners / investor in the energy assets, and the members of your team. Your primary responsibility is the validity of the systems algorithms used within the People, Ideas & Objects systems for the facilities in your specialty. Ensuring they are consistent with the agreements requirements for production, revenue and cost allocation. You are joined by many of your teammates who work with you to ensure the processes you are responsible for are operating correctly. Your team consists of yourself, an engineer, and a software developer, and you have reviewed a proposed methodology of production allocation based on the co-mingling of production from the Cardium zone. A proposal from another investor group that needs to process their production through a facility your investors own. This has been contentious with the work attempting to strike an agreement for the methodology of the production distribution.Your work largely consists of a number of processes that validate much of the automated processes of reporting for the facilities. Data and information that you work with mostly consists of a variety of graphs, charts and statistics that summarize and highlight the areas of concern and / or opportunity. Your toolbox also consists of many forms of rich media where audio and video presentations and documentations are used to discern the desire of the clients, and enable your team to learn about the new and innovative ways that the facilities are changing. Your report to your clients regarding the new production from the outside group will consist of a summary of the historical production history and net income. And, what could be expected from the facility on a go forward basis if there were no changes. These pro-forma reports are compared against a number of scenarios that the new investor group has expressed interest in, and deemed acceptable. These different scenarios have been used to calculate the differences from the most recent reserves information. It is your recommendation to the ownership group that hired you that the economic externalities have predominately fallen in their favor and they should proceed with alternate B. Adoption of the teams' proposal is made and the new production begins to be processed. You and your team work to have the system amended to reflect the new changes, and your processes updated to reflect the new agreement. You then move on to your next assignment where your team has been asked to evaluate the effectiveness of a CO2 capture and injection scheme for another ownership group.

The key points I wanted to highlight is the lack of fixed office locations, the hyper-specialization of a team's work, and the time of day in which the work was done. How the rich media would be used to communicate concepts quicker and more effectively then with text, and the statistical and graphical representation of data was necessary to eliminate the overwhelming volumes of data. Also how the team was comprised of cross-functional teammates with their own specific skill set. And lastly how they moved from different ownership groups based on their specialization of certain categories of hydrocarbon bearing zones.

I will try to add more to this vision in this next week, but I think that most people would generally agree that it is plausible that these types of activities would take the industry to the next level of performance. Those of us that know the bureaucracies are "sleep walking" through this looming crisis can see the value in developing this software. This next week I will take the opportunity to consolidate the discussion of modules, transactions and boundaries of the firm, and specify exactly what I foresee a user will define what will be done in this development. Lastly, I want this week to be the beginning of an appeal to the community of like-minded thinkers at the Oil Drum, Association for the Study of Peak Oil and the Energy Bulletin.

Technorati Tags: Gensey, User, Vision