Three weeks left...

That is we have three weeks left in our 2010 budget drive. We still have no commitments, funding or support of any kind. It was an objective of this funding drive to provide evidence to the directors, shareholders and investors of oil and gas that the management are too conflicted to support these developments. Again, the evidence is in. Management have done everything in their power to ensure these development don't happen.

Our appeal to the shareholders and investors is to bring about a competitive means of organizing the oil and gas industry. Just as Bear Stearns and Lehman Brother's managements didn't provide an alternative for their shareholders, I hope to appeal to the shareholders in oil and gas firms.

I believe there is a far bigger issue at play in the oil and gas industry in comparison to the banking industry. No one is missing either Bear Stearns or Lehman. Other then the shareholders that is. In oil and gas the economy is the direct benefactor of the energy the industry produces. We have documented here many times the calculation of 18,000 man hours of effort that is offset by each barrel of oil. By not having those barrels freely available to the consumer denies the full potential of our market economies.

This isn't the role or responsibility of the management of the oil and gas firms. At least that is what they suggest is the case in their version of the market economy. Who's responsibility is it to ensure that markets are well supplied? If the oil and gas producer's are not responsible, who is? At some point the issue of a lack of supply will require an answer. What will the oil and gas industry say at that point?

Last Tuesday I wrote about the use of some of the new mobile devices in making and implementing decisions at the Joint Operating Committee level. I also indicated that Exxon could not provide the marketplace with that type of software offering. If Exxon or any single producer were to provide a software solution like People, Ideas & Objects, it would cede too much information to Exxon or the producer. There are two other points to consider. One is the ability to have all the producers on the same technical capability, and the need to have one software supplier.

The ability to have all the producers representing the JOC using the same software denotes some of the value of using the Cloud Computing model. Accessing the most current version of the software and knowing that everyone else is using the same tools facilitates and enables collaboration and communication. When the application's are also transaction aware and able to manage the business based on the decisions of the JOC, then it can truly begin to optimize the science and engineering innovations.

The second point is how the industry is run today. Multiple vendors each providing one slice of the functionality to some of the producers to the JOC. Others are using other systems that are provided by other vendors who have different technologies and perspectives. Having the virtual meeting that I mentioned, with all of the potential described in Tuesday's blog post, will have to come with 15 IT personnel supporting the interactions and protocols. Good luck.

The need for one software development capability should be clear to readers of this blog. I have used the Intellectual Property developed in my research and this blog to concentrate these software developments to mitigate the issues in the energy industry. The use of Cloud Computing and the potential ease-of-use between producer firms requires one ERP solution provider.

March 31, 2010 is the deadline for raising our 2010 operating budget. After which a variety of consequences, such as financial penalties and a loss of one years time will occur. Our appeal should be based on the 26 compelling reasons of how better the oil and gas industry and its operations could be handled. They may not be the right way to go, but we are committed to working with the various communities to discover and ensure the right ones are.

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

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22, 23, 24, 25, 26...

We continue on in summarizing the many compelling reasons for People, Ideas & Objects to be funded. The five additional reasons being added today provide more support as to why these developments should continue. The previous 21 reasons were summarized in blog posts here and here.

22 & 23 Draft Specifications boundaries of firms and markets. The Chandlerian Perspective

Much of the Draft Specification used Transaction Cost Economics (TCE), Modularity and the boundaries between firms and markets in its design. These provided the guiding principles in terms of how the specification deals with the issues facing the oil and gas industry.

We recently discovered Harvard Professor Gary P. Pisano and his analysis of Science-Based Businesses. Certainly oil and gas qualifies as a science based industry. Importantly Professor Pisano bases his analysis in the Chandlerian Perspective (Reason # 23) and its impact on science-based businesses.

The Chandlerian Perspective defines the value and benefit of this software development project to the producer firms. In his recent paper Professor Pisano provided us with a summary of Alfred D. Chandler's perspective.

• Technical Innovation & Organizational innovation are interdependent.

If we are to increase the volume of science and engineering involved in each barrel of oil equivalent. Then we must organize ourselves in ways to define and support these desired changes.

• New forms of business organization & Institutional arrangements are invented to solve specific economic problems.

In other words we need to act. This change will not occur on its own. We have to design the solutions to today's problems. This point should take on a greater sense of urgency from the point of view that we are standing on the shoulders of several generations of giants. Any fall in the performance of the existing bureaucracy could be far more severe then we assume. Moving back to manual systems is not an option.

• Organizational & Institutional innovation is an evolutionary process - nothing guarantees "we get it right every time".

People, Ideas & Objects is providing a software development capability. One that adapts based on input from the user community. This is not developing to a fixed point, but designed to hit a moving target. I foresee no time in which People, Ideas & Objects will not have substantial work to be done. And this level of work is just as applicable today as it will be 20 years from now.


24 Intellectual Property is focused on oil and gas innovation, and available to all.

The research that is reflected in the Preliminary Research Report, the Draft Specification and this blog make up the copyright that I have earned in the publication of these ideas. Users and members of the Community of Independent Service Providers add to this Intellectual Property (IP) base with their contributions in defining and building the People, Ideas & Objects software applications. Access to this IP is through the user signing the license which provides access to the original research and Draft Specification. Permitting the communities to contribute as if the IP was their own. In turn they assign the right to any of their ideas or developments back to the original copyright owner, where in turn, it is available to the entire users base.

This is done for a number of reasons. This method provides the base of understanding of the industry to innovate at the speed at which the IP can be developed, or instantly. There won't be 100 different people claiming ownership of one part of an application or IP; and the cross licensing and other legal tactics that can be used by those that might claim some ownership.

Secondly the concentration of IP allows me to focus the industries dollars on one solution. Breaking the scope of the People, Ideas & Objects down into a competitive marketplace would only dilute the offerings of many potential service providers. Cobbling together software solutions to meet the scientific and engineering driven demands of the industry is the last thing that is needed.

Third, users and particularly the CISP earn revenues from People, Ideas & Objects for their ideas and IP. (Through the license they are effectively selling their IP back to me.) They also are granted a non-exclusive license to generate, for their exclusive benefit, any revenues associated with any services they provide along with the People, Ideas & Objects software to their producer clients.

A focused software developer and user community must be supported and motivated to provide the producer with the most innovative environment in which to manage their operations. The focus of the CISP is to provide the oil and gas producer with the most profitable means of oil and gas operations. Management of the IP in this fashion provides these objectives are attained.

25 No finance related constraints with People, Ideas & Objects.

People ask why not fund People, Ideas & Objects by going public or with bank loans. These options are not open to companies that want to provide solutions to small markets like oil and gas ERP systems vendors. They may be open, but they are certainly not able to fund the type of developments that are needed. At some point the producers will need to make payments to those firms that may have been able to borrow or raise money. I say we just skip that first step and start with the revenue from the producers to fund the developments.

This provides People, Ideas & Objects with no bankers, no public stock offerings or exchanges to distract or compromise our focus on providing the best software development capability to the oil and gas industry. I think this makes for a compelling reason for the producers to get behind this project and start funding the budget. When added to our compelling business model, where the producers pay for the costs associated with developments plus an element of profit. The producers (as individual firms) are able to gain far greater value then what their software development expenses will be. The CISP and Users are also able to earn a handsome living by providing the producers with this software and their associated services. Leaving no stone unturned in supporting the innovative oil and gas producer.

26 Marketplaces.

The Draft Specification contains three "Marketplace" modules. (Petroleum Lease, Resource and Financial Marketplace Modules.) We recently learned from Professor Ronald Coase that Markets are creations. I am embedding his video "Markets, Firms and Property Rights" for your review. Creating markets in these modules will provide a more dynamic industry, better able to meet the demands of an innovative oil and gas producer.



March 31, 2010 is the deadline for raising our 2010 operating budget. After which a variety of consequences, such as financial penalties and a loss of one years time will occur. Our appeal should be based on the 26 compelling reasons of how better the oil and gas industry and its operations could be handled. They may not be the right way to go, but we are committed to working with the various communities to discover and ensure the right ones are.

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

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One Platform to Innovate From

People, Ideas & Objects is about bringing a software development capability to the oil and gas industry. This is assumed as necessary to have innovation in the earth sciences and engineering disciplines drive the industry forward. A rapidly changing and innovating industry requires that the ERP software that it uses; supports and identify the industry standard Joint Operating Committee. People, Ideas & Objects brings this capability about through the development of the software as defined in the Draft Specification.

I mentioned a few day's ago the 20 developer teams we foresee in developing this application. One of these teams will be for the mobile platforms that are becoming common in the market. Whether these are phones or larger devices these products will bring about many changes to the prepared organization. I have also documented on this blog before that these types of devices threaten the unprepared organization in ways that I don't think are fully appreciated.

One of the ways in which the unprepared organization is challenged by these devices is the access to the new and innovative type of applications. Having to use the previous generations of technologies has a negative impact on the quality of work being conducted in the industry. If an engineer sees that the industry is unable to use these new technologies, they may decide to move to more progressive industries. People want to get the job done, not haggle with old technologies.

Another way is for the technology to enter the back door of the organization. This I feel is the worst possible situation. People using new technologies that the organization has no understanding of. There are over 140 thousand applications on the iPhone and soon to launch iPad. How many of these are involved in the operation of the oil and gas industry. Thankfully the oil and gas industry does not establish a large enough market for a developer to focus on them specifically, however, there are applications that are being used without the organizations knowledge. How many are accessing data and information that is of value to the firm or its competitors? It is reasonable to assume that there is data and information being prepared on these devices that the firms know nothing of.

These new devices are of substantial value in the hands of the oil and gas workers. Working remotely, or at the office, the ability to connect and interact with other people, data, applications (ERP & Mobile Apps) provides substantial value. The People, Ideas & Objects Mobile Teams Product Owner is able to provide these types of applications to the People, Ideas & Objects users and Community of Independent Service Providers. However, they are also able to ensure that the Security & Access Control, Data Model and Military Command & Control Metaphor are incorporated into the Mobile Applications. The ability to incorporate these application attributes are only possible to the People, Ideas & Objects Mobile Application team. The have the access to the other application modules of the Draft Specification, are innovation focused and most important of all are a critical member of the software development capability that People, Ideas & Objects provides the oil and gas industry.

It is disappointing to the community at large that these types of opportunities may fall another year into the distance. The discussion yesterday about the high probability of a funding failure hurts the industry in terms of dealing proactively with these technologies. The ability to ignore these technologies doesn't exist anymore. You either incorporate them into your business constructively, or let them enter the organization like a virus. It's the choice of the firm and unfortunately, if the funding failure occurs, this will be the way that the oil and gas industry deals with the new technologies. Not what the community wants to do.

With a purpose driven software development capability, what possibilities are there? This new iPad will have video chat enabled. Would it be constructive to have all the members of the Joint Operating Committee to meet virtually, face-to-face, with the other members? And could this be on an ad-hoc just-in-time basis, anywhere the participants are and anytime of the day? Would this provide value to the member firms? Of course it would. What would make the discussion more valuable would be the ability to have these discussion in a secure manner, that were respectful of the Compliance & Governance of the member firms, recognized the Military Command & Control Metaphor that dictates the JOC's pecking order, recorded any decisions made, authorized and implemented any plan of action, and lastly have access to the proprietary information and data of the property associated with the JOC.

One quick additional point about the use of a device like the iPad. Each producer firm that is a participant in the JOC will have their own unique strategy for the property. They also have their own costs and revenues. These are almost universally mutually exclusive to the strategies, costs and revenues of the other member firms. Would it be of value to have these other data elements show up to the participant for their own purposes?

All of the points mentioned are possible with the development of the Draft Specification and having the software development capability inherent in the People, Ideas & Objects offering. Approaching this type of opportunity in a constructive manner is the appropriate way to move. I would hate to lose another years time because the industry did not have the foresight to fund these types of developments. Its one thing for a separate organization like People, Ideas & Objects provides this type of functionality. Imagine if it was Exxon that owned and operated a software development capability and functionality like the Draft Specification. Would anyone else ever use it knowing it was owned and operated by one producer? What the industry needs is one platform to innovate from.

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

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

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What happens April 1, 2010

The question has been asked what happens to People, Ideas & Objects if on April 1, 2010 there is no financial support for the project. A difficult and challenging question, one that could be answered many different ways, based on the desired political outcome. Writing a blog keeps the transparency at a high level and therefore, there is only one way in which to answer the question.

Seeing the project as it stands today, it is clear there is much value that can be developed in the long term. A funding failure is not indicative of the lack of long term value. We will continue somehow and in some fashion, just as we have for the past number of years. If this were easy, it would have been built by now. We are not deterred by the scope and scale of the challenge that stands ahead of us.

When I say we, I mean this community. The number of people that follow this project is small by Internet standards. If we realize that we are talking about developing ERP systems for oil and gas producers based on the Joint Operating Committee, the numbers are impressive. This community deserves to continue on.

We have to ask ourselves "what if" the failure of the oil and gas industry does come about. We have seen the international banking industry collapse, many of the people in those industries have been severely challenged. Housing continues to be challenged, despite the press releases to the contrary. And now governments are being called on their budgets and debts. Whether it's Greece, Iceland or California. Governments everywhere are overextended and must adjust their ways if they are to survive. The oil and gas industry is being challenged, I believe, by increased demand from China, India and other rapidly developing nations. At the same time the industry is moving to a more complex scientific footing, greater political, geographical, and logistic risks. Change of this magnitude will cause the current bureaucracies to fail. We need to be there to pick up the pieces. Otherwise some economies will have to take a lower priority in terms of their allocation of energy.

A funding failure on March 31, 2010 is a high probability. Greater then 95% in my opinion. That does not provide us with a reason to stop. How we will continue on is in similar fashion to what has been done here in the past. We're closer to securing our initial funding then we've ever been. Patience is not something that I am oriented to, however, if this funding failure pushes back our timing, there is nothing that we can do about that. We should understand that we will probably be in the same position one year from now as we are today. Progress from this point takes the financial commitment of leadership of the industry. Until they step up, we will need to exercise that patience.

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

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Designed to hit a moving target

People, Ideas & Objects is an Agile software development developer. I've come upon a slide presentation that documents many of the key attributes of the Agile software development methodology. It's a 47 minute presentation that provides people with an understanding why the Agile processes are superior to past software development methodologies. The title of this entry captures accurately why Agile works.

Instead of repeating what is stated in the presentation, it would be better to explain how the Agile process will be implemented in People, Ideas & Objects. A key difference is the collocation of the teams for development. People, Ideas & Objects have the following policies regarding collocation.

Physical location is irrelevant. Particularly as Integrated Development Environments (IDE's) like NetBeans and Eclipse have tools to aid in developer communications. This collaborative area of IDE development has only begun and I expect to see many tools for the Agile teams collaborations to develop.

To access the full scope of the applications user community will require people to be involved from many different regions, many different firms and many different disciplines. If we were to attempt to put everyone under the same roof, we wouldn't get anything done. With the volume of anticipated teams being 20, having 200 developers within one region would be counter-productive from the point of view of user input. Working virtually is key to the success of this project.

Generally, it should be considered that a team be within the same time zones. Are dedicated full time to the development of their People, Ideas & Objects modules, and have access to users. Exceptions to this will occur, particularly as we wish to access teams in India and other regions. If collocation becomes an issue to the performance of the team, then we can "tune" the team by bringing them to one location for a two week period to work out the performance related issues.

Access to developers. To developers the tools they use are the same irrespective of where they are. If they are collocated within the same offices as the other team members, or across the country, it does not matter, in my opinion. What does matter is access to quality developers. If we were limited to acquiring the developers from just one city, it would constrain us in terms of our demands for quality software. The energy industry has traditionally not developed a software development capability of the scope that People, Ideas & Objects demands. Therefore to access the talent we need, we will not be putting any physical constraint on the co-location of team members.

As the discussion in the previous paragraph discussed developers, the same can be stated about users and the Community of Independent Service Providers. When do we start? As soon as there is a financial commitment. We'll then settle on the scope of the application, break down the modules into sub-modules and build the user base and software development capabilities.

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

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

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McKinsey Organizational Capabilities

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

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

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

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

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

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

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

and

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

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

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

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

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

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

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Google App Script and App Engine

Each user of People, Ideas & Objects is provided with a "Google Apps account for your domain". This includes Gmail, Calendar, Documents [Document, Presentation and Spreadsheet] and Sites applications. If necessary users will also be provided with access to SalesForce.com applications. All of these applications are included and accessed as part of the Security & Access Control Module of the Draft Specification. There are many other Google applications like Contacts, Start-Page, Groups and Chat but two of the most useful to the users might be Google App Script and Google App Engine.

Recall the purpose of the Security & Access Control Module is two-fold. First providing the data security and integrity of the producers information, and access control based on the Military Command & Control Metaphor. It is this module that enables and limits the users domain to that which they are authorized by their client producers and Joint Operating Committee's.

What People, Ideas & Objects provides is the software development capability that users need. Transaction processing, transaction design and marketplace application modules to name a few types of functions. This development capability is to build the software tools users need to exercise their tacit knowledge of the oil and gas industry. There is also a small area of functionality where it may be necessary to have ad-hoc queries and reports generated. Having the People, Ideas & Objects developers involved in these application types becomes expensive.

I'm assuming that the line between the two forms of processing, heavy industrial vs. lightweight, is understood by most users. This post is about the ad-hoc lightweight tools that users will have available to them within the Google Apps applications that are embedded within the Security & Access Control Module of the Draft Specification.

Google App Script is very similar to the advanced features in Excel. The ability to access data however, I think, is much more advanced then Excel. These Java Script scripts are not limited in any fashion. The user therefore inherits the web interface for these programs that they might write. Google has recently published a tutorial on the use of Google App Script that shows the power of this technology. If you have a Google account you can access these from within the Spreadsheet application included in Google Docs. The tutorial and API are available to get you started.

Google App Engine is substantially more capable. Particularly from the point of view of the Java based service. There are only two areas where the user is limited from accessing. The file system and threads. Best of all the SDK is able to be run in an IDE like NetBeans or Eclipse (both of which are free) which allows you to leverage the entire Java community. Powerful stuff, where the initial costs of running applications is next to nothing. Members of the Community of Independent Service Providers could also use Google App Engine to run applications for their own businesses.

I see a very large role for the user based applications described in this post, the Google tutorials and elsewhere. Having a "Swiss Army Knife" type of application is very valuable. The key difference between these services and the Draft Specification Modules is the ability to write data back to People, Ideas & Objects databases. That has to be handled in a fashion that can't be accommodated with the two tools we are talking about here today. However, Google App Engine provides you with access to Google's Big Table to store your own data.

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

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McKinsey a Case for Change

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

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

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

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


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

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

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

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

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

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

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

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

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

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

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

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

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Perez The New Technologies Preview

I'm preparing the many posts of our review of Professor Carlota Perez' paper "The New Technologies: An Integrated View". In this document it becomes very clear to me why the situation at People, Ideas & Objects is the way that it is. That is of course, it has to be that way. The situation that I am talking about is the strong conflict between this software development project and the existing bureaucratic ways and means of the industry. As much as I would like it to be less confrontational, there is no choice in the matter.

It's about competition. The old competing against the new. The old failing and being replaced by a bottom-up rebuilding of the industry. Professor Perez states;

The crisis is truly a process of “creative destruction” but not only in the economy but also in the socio-institutional sphere. The new upswing can only be unleashed by means of vast socio-institutional innovations, in response to the requirements of the new paradigm and geared to facilitating the full transformation seething in the productive sphere. p. 16

And as much as we would like to have this transition managed in a constructive way, that's not in the cards. The bureaucracy has made their choice not to support these developments. That fact is very clear to me, and hopefully that will become evident to the energy company shareholders, directors and investors in this 2010 budget drive.

What began as the expectation of an enjoyable review of Professor Perez' 1986 document. Has turned into the discovery of a significant piece of research. I don't know how many posts will be the result of the review, but I expect to take the time that a document of this quality deserves.

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

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

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McKinsey Internet of Things

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

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

The four cornerstones of the Technical Vision are as follows.

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

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

Automation and control

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

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

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

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

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

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

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

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

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

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