People First: Full Engagement

Abdul-Jaleel Al-Khalifa, 2007 SPE President • president@spe.org

When oil prices dipped in the mid-1980s, many companies went through downsizing or “rightsizing” initiatives. A major surge of mergers and industry restructuring followed through the 1990s. Companies had to scale down their workforce to lower their annual direct expenditure, and the notion of doing more with less became very familiar. Unfortunately, the layoffs caused many talented experts to migrate to what they perceived to be more stable industries. Student enrollment in petroleum engineering schools had also suffered a drastic decline, drying the pool of new graduates joining the industry for many years. The recent growth and expansion of industry activities is faltering because of a scarce talent pool, a skewed demographic of an aging workforce, and a thin pool of new graduates. Striving to recruit additional human resources, some companies were more creative in revising their human resources policies, including salary structures and benefit plans. Industry-wide, the process was a zero-sum game where companies continued to poach professionals from other companies within the same industry. The painful and inefficient “hiring and firing” cycles have to be eradicated in favor of a 10- to 15-year staffing plan that results in more efficiency and enduring stability.

The current unprecedented industry growth and strained human resources calls for full engagement and utilization of the current industry workforce. Indeed, it is quite alarming to hear many industry experts complaining that their potential is not fully utilized. It is also often reported that new graduates joining our industry are initially very inspired and motivated, but tend to lose their energy and passion after being in the industry for only few years. What can the industry do to ensure the full utilization of our employees’ potential? To better assess the situation, in December 2005 SPE conducted a survey to assess attributes related to employee engagement and job satisfaction.

SPE Survey Results

The survey was sent to all non-student, employed SPE members. A total of 3,680 responded. This is statistically representative of the membership at the 95% confidence level with a margin of error of only ±1.54%. Following is an executive summary of the results:

The vast majority (79%) of respondents are happy in their job. However, 21% are not.
Seventy-nine percent of respondents said they would recommend their company as a good place to work, 12% were neutral, and 9% would not recommend their company.
A total of 62% of the respondents said that there was a good balance between their work and personal life.
Significantly, 55% of the respondents believed that their job does not make use of their full potential.
More than half (57%) of the respondents believed that management “walks the talk” in terms of practicing the values communicated, while 43% did not believe that management practices what it preaches.
Respondents who said they would voluntarily leave a company cited the following reasons most frequently, in order of priority: compensation (26%), not feeling valued by the company (19%), and insufficient career advancement opportunities (19%). Only 9% said that they had not thought about leaving their job.
Some 95% of survey respondents said SPE should address more people issues. In order of priority were career planning (22%), mentoring/coaching (20%), leadership (19%), ethics (16%), and building relationships (16%). Only 5% felt that SPE should not address people issues.

Full Engagement

To me, the alarming result of the survey is that, while the industry is loudly complaining about a major shortfall in human resources, 55% of the surveyed population believed that their job does not make use of their full potential. These are employees on industry payrolls, yet they are not fully engaged and seem to have a lot more to offer. This implies that the petroleum industry can enjoy a much higher level of innovation and efficiency at no cost with the current workforce. Therefore, it is urgent that we address how to maximize engagement and capture the full potential of our current workforce. But what is engagement? Why do employees disengage? How do employees move along the engagement scale and how does engagement impact the performance of the corporations?

Dreaming of an honorable, important life generates a clear vision of the future, associated with deep, motivating passions. This normally develops into setting various objectives with detailed action plans. Striving tirelessly to achieve these objectives brings a lot of gratification and happiness. Every step toward answering this deeper call brings flashes of commitment and perseverance that drive further progress. The interest level, excitement, dedication, and persistence elevate with time until they draw on full strengths and exploit the full potential of the individual. That is the state of full engagement, called “the flow” by psychologists. It is not the same as overworking or being a workaholic; rather, it is a smarter focus, a sincere interest, and a higher level of thinking.

The vast majority of employees joining the industry aspire to answer to a deeper calling. Their target is not only to ensure a decent lifestyle, a handsome salary, and peer recognition through a technical or a managerial post. They answer to a deeper call to play a global role in shaping the future and nurturing the prosperity of mankind. Hence, their energy level, engagement, and expectations tend to be extremely high at the beginning of their career. Unfortunately, some of these inspired employees may lose momentum and hence scale down their expectations. They might end up trying only to ensure peer recognition or, worse, they might completely disengage and aim only to secure a salary at the end of the month. The painful feeling of sliding down the engagement scale, being under-utilized, and sidelined leads to a lack of innovation and a loss of interest. The good news is that the engagement ladder (Fig. 1) is a two-way street and employees and corporations can condition the environment to reverse the trend and boost engagement.

Fig. 1—Engagement ladder is a two-way street.

There are two main attributes of both employees and corporations—character and competency:

An employee’s character reflects his/her values, beliefs, ethics, and internal drive in life. Competency is both technical and emotional, reflecting his/her technical caliber and intellectual and interpersonal skills. An employee can rank either high or low on the employee character and competency axis (the horizontal axis in Fig. 2).

Fig. 2—Employee’s and corporation’s character and competency determine the engagement level of the employees.

A corporation’s character (sometimes called culture) reflects ethical behavior, fairness, trust, integrity, and transparency, among many other soft attributes. A corporation’s competency is its financial, technical, and people (including leadership) capabilities. A corporation can rank high or low on the corporation character and competency axis (the vertical axis in Fig. 2).

The four quadrants of Fig. 2 show the following:

High corporations blessed with high employees are very healthy organizations, enjoying high engagement, high efficiency, and cost-effective initiatives.
Low corporations with low em--ployees suffer from severe disengagement, low efficiency, and high-cost -operations.
High employees in low corporations either will tend to migrate vertically to high corporations or will eventually slide down in their competencies to become low employees.
Low employees in high corporations either will learn and improve their competencies and become high employees or will lose their jobs and eventually migrate to low -corporations.

Ultimately, only healthy organizations in the engagement quadrant will shine and competition will take care of the risky corporations in the disengagement quadrant. It is also worth noting that only the engagement and the disengagement quadrants are growing, while the other two quadrants shrink most of the time. (Figs. 3 and 4)

Fig. 3—In healthy organizations, the engagement quadrant grows, resulting in higher efficiency, advanced innovations, and lower cost.

Fig. 4—In risky organizations, the disengagement quadrant grows, resulting in lower efficiency, lack of innovation, and higher cost.

Summary

Industry has no choice but to position itself in the engagement quadrant. This is achievable if both employees and corporate leaders make serious attempts to continue to focus on both character and competency. Being fair and ethical is by no means less important than being technically competent. SPE needs to foster this link between competency and character through various means, such as forums, workshops, and panel sessions. The ultimate objective is to nurture a happy, fully engaged workforce to sustain the continual growth of the industry. In December I will focus on the employee’s role in sharpening his/her character and competency. My January column will discuss corporate leadership’s role in shaping the character and competency of the corporation.