Hay Group: Succession planning key for oil industry

22 September 2014 Consultancy.uk

The Oil and Gas industry faces the risk of a dry-up of leadership talent due to a lack of succession planning and a too big a focus on short term business goals. This is concluded by consulting firm Hay Group in its ‘Enhancing your leadership reserves’, a research report on leadership investment in the Oil and Gas industry. In its report, Hay Group lists four key areas of focus to encounter the risk of a leadership dry-up. 

For almost a decade, since 2005, global management consulting firm Hay Group identifies the organisations with the best leadership practices in its annual ‘Best Companies for Leadership survey database’. For this survey, professionals from every level are asked to rate the leadership development practices within their own organization. In the 2014 survey, 18,000 professionals took part from 2,200 organizations around the globe. 

Oil and Gas

Based on this survey, Hay Group recently released its ‘Enhancing your leadership reserves - Getting a better return on your leadership investment’. For this research, the firm extracted data from 33 Oil and Gas organizations, that was compared with the average of the total cross-industry sample, and interviewed 20 organizational leaders from the sector.

OIL & GAS industry leadership

Hay Group’s research shows that companies in the Oil and Gas sector currently fail to implement sufficient succession planning, and hence encounter the risk of a dry-run of leadership reserves. With succession planning of key importance for the continuity in a firm, a dry-run of capable leaders could severely impact future business goals. The risk is caused by a conflict between the relatively short term geopolitical and economic considerations within the Oil and Gas industry and the developing long-term leadership pipelines.

Management of organisations in the Oil and Gas industry prove to be more effective at running businesses profitably and smoothly than organisations in other sectors, as is shown by the Hay Group research. Around 81% of the Oil and Gas leadership strongly focus on this, compared to the cross-industry average of 75%. As a result of this focus on immediate results, more direct management is conducted by 53% of Oil and Gas leaders, compared to the 37% average, an approach that could cause a de-motivating environment for employees. In the Oil and Gas sector, 64% of workers feel less engaged at work, which is 9% higher than the average in all other sectors. The report shows that only around 53% of all respondents feel that their employees were encouraged to develop their expertise beyond their current areas of expertise.

Focus on operational excellence

“Although the industry is very long-term in the way it operates, there are a lot of short term responses in terms of human capital,” tells Sherief Hammady, Hay Group Director and co-author of the report, the Executive Grapevine. “For example, Human Resources in this industry tends to focus on the short term, such as attraction of new staff, paying people more to bring them in, being able to poach good, skilled people from other competitors, etc. But there is a lack of focus on long term succession planning due to operational constraints.”

Sherief Hammady - Hay Group

Going forward

In their conclusion, the consultants of Hay Group identify four key areas to focus on in order to encounter the risk of a run-dry of leadership talent:

  • Building adequate leadership pipelines, including early career identification,
  • Effective people performance management,
  • Bottom-up engagement to make change happen,
  • Making leadership interventions profound and long lasting through frequent practical interventions.
×

Why leaders must balance technical expertise with soft skills

17 April 2019 Consultancy.uk

Soft skills matter in the workplace just as much as technical expertise, writes Samantha Caine, Managing Director of Business Linked Teams.

For too long technical expertise has been seen as the marker of a strong candidate for development into a sales or leadership position. Sales and leadership candidates are tasked with demonstrating a diverse and wide-ranging set of technical skills, yet their aptitude in these technical skills or ‘hard skills’ cannot signify great leadership potential. This is why a healthy balance of soft skills and technical ability is required. 

So what exactly is the difference between technical skills and soft skills? In engineering, it’s crucial to demonstrate knowledge of physics as well as a strong grasp on mathematical equations. Yet, in any industry, it’s important for leaders to be able to interact with other people effectively with soft skills like communication, empathy and adaptability. 

Business Linked Team’s 2018 study into internal leadership development revealed that 69% of large organisations are prioritising the identification and development of future leaders from within the workforce. As more and more organisations begin to invest in sales or leadership development within their existing workforces, more focus needs to be placed on ensuring the right soft skills are in place. 

With those soft skills in place throughout the workforce, the business will benefit from a wider pool of potential leaders developing under their noses, and it should be the same where sales candidates are concerned. 

It’s not just about easier access to ideal candidates for these positions without the rigmarole of recruiting from outside of the organisation. The leadership development study also found that 89% of HR decision makers say succession planning has become a top priority. Those currently serving in leadership positions can’t lead forever and the same goes for those generating sales for the business.

Why leaders must balance technical expertise with soft skills

From people leaving for new opportunities or retirement, to people simply stepping aside to focus on other areas of the business, successful leaders and salespeople require experienced and capable successors that will be ready and able to confidently step into their shoes and pick up the mantle without the business experiencing any lapse in performance.

Soft skills make stronger candidates

When it comes to the soft skills required, a strong leader must be able to manage through clear communication and effective time management, coaching and goal setting. They must be able to demonstrate empathy and empower their teams to be successful, productive and fully engaged. And beyond simply giving direction, they must also be able to take direction from those above them and cascade the business strategy down through their teams. 

A strong sales candidate must possess the ability to communicate value to the customer, negotiate well and protect margin or the ability to increase the scope of a particular sales opportunity. 

With the relevant soft skills in place, the business will benefit from increased productivity, greater agility against changing market conditions and greater transparency. In turn, this will provide visibility on issues and inefficiencies while removing opportunity for miscommunication. All of this can transform the culture of a department, improving employee satisfaction and reducing staff turnover. 

Ultimately, developing leadership or sales candidates will require the business to strike the right balance between technical skills and soft skills, and this requires an effective and sustained learning journey.

A balanced learning journey

Facilitating and supporting the development of leadership and sales is best achieved by establishing training groups. By cultivating training groups, businesses are creating talent pools that will inspire and support each other on the learning journey. However, personal goals and learning objectives must be defined for each individual based on their own existing skillsets and the skills that each individual needs to develop. 

With the emergence of e-learning, businesses recognise the value of online-based learning activities, yet many make the mistake of opting for one-size-fits-all solutions which are solely focused on self-study. A development solution will only deliver true return on investment if it combines e-learning activities with group learning activities that provide opportunity for shared experiences and support.

A blended learning solution that combines self-study and face-to-face group learning activities will aid strong development of the talent pool through shared experiences. Through these shared experiences, those undergoing the training will organically develop a support network that supports the development of the group as much as it supports the development of each individual. 

The blended learning approach is supported by one of the seven principles of human learning that socially supported interactions aid the individual development of expertise, metacognitive skills, and formation of the learner’s sense of self. The strongest opportunities for development can be unlocked by blending workshops with online activities such as virtual sessions, peer coaching, self-study, online games and business simulations. But it’s crucial to provide a blend of one-to-one and group sessions too.

Beyond delivering a better learning outcome for the employee, the blended learning approach allows organisations to adapt their training quickly and easily to shifting business demands in an ever-changing landscape.