The downstream oil and gas industry has faced an extremelydifficult challenge over the past few years from 2015 to 2017. How were companies in this industry going tosurvive while the average selling price for a barrel of oil was twenty dollars,and the business models for many oilfield companies had been built on selling barrelsof oil at eighty to one hundred dollars? If companies wanted to survive in the longest downturn in industryhistory, many company-wide changes had to take place. For a major oil field service company in the Gulfof Mexico region, this meant merging departments and offices, in addition to layingoff many support staff and management staff. My division lost all in house management,moved to a new facility, and a leader from a much different department steppedin. Jessie1,the new manager, had his work cut out for him. Being a leader during a major industry transition is problematic enough;yet Jessie was also taking on a new young team with a culture that was muchdifferent than what he was used to supervising. His previous department was largewith well established procedures and protocols. They had many global advisors that could answer any questions during anyhour.
Our division had the same humancapital, however our knowledge lived in the operations team. Our global advisors were limited, and did notalways answer their phones on nights and weekends. Our field service personnel team hadmultitudes of tribal knowledge that didn’t always make it back to the office,and was not currently included in procedures. Most of this team had ten plus years of relevant industry experience,while office personnel had one to five years and most of the global advisorshad less than ten years of experience.
Jessie ignored repeated request from the office personnel to acknowledgethe field service personnel. He felt that the field service personnel werereplaceable and not worth his time. Theymade sufficient money for the worked performed, and they should be happy tohave a job with the current industry conditions. By creating a cultural that devalued his employees,making them seem as only “hired help”, field personnel began leaving to pursueother careers. Jessiedid not value the human capital he had encountered on his new team.
The team realizedthat new management believed they were replaceable. They feared for their jobs even though theywere knowledgeable, hardworking and team oriented. Jessie had a Theory X perspective. He assumed all the employees were easily replacedbecause they were “just field workers”. A study by Lawter, Kopelman, and Prottas (2015) looked at both Theory Xand Theory Y management styles with on job performance. They proved that there is not one way to evokemaximum output from all types of people. They concluded: (Lawter, Kopelman, and Prottas, 2015) “not only domanagerial attitudes matter, but how managers behave towards employees affectsboth individual and group level performance.
” As people began to quit, servicequality quickly declined. Jessie’ssecond mistake was not valuing and understanding the diversity of his new team. He continued the management style he hadperfected with his previous team. He attemptedto use fear and money as a means to keep employees putting forth their best effort.
As the department continued to lose fieldpersonnel, office personnel realized they could no longer be the best in thefield without proper offshore service support. These employees became disengaged and disgruntled. Within two years the department lost over halfof the original team that was merged with Jessie’s division. Jessie’soriginal meeting had started the merge off on a positive note. However, management’s actions and decisionsproved to the team that Jessie was not committed to making the merger beneficialfor both parties. He had good intentionsof bringing the small team mentality to his large group, but he didn’t followthrough on this promise.
Olsen and Martin (2012) discussed the importance ofcommitment when managing diversity. “Organizationswhose DM Diversity Management approaches focus on leveraging diversity toachieve business-related outcomes hold diversity as an instrumental value,because diversity is viewed as instrumental in achieving business success. Incontrast, organizations that view a diverse workforce itself as an objectivewithout explicitly considering it as a means for achieving business outcomeshold diversity as a terminal value.” Thiswas evident when Jessie treated all people as if they were the same. Not all ages,genders, and cultures hold the same values in high regard. Most were looking for job security, not the uncertaintyJessie instilled.
Jessie never showed aninterest in the people he was managing. He did not get to know them, their backgrounds,family, or work ethics. A study by Marquis, Lim, Scott, Harrell, and Kavanagh(2008) looked at and interviewed CEOs of companies that were highly respected inregards to diversity. It was noted: For them, diversity encompassed more than raceand gender; it included age, sexual orientation, disability status, nationalorigin, and even style of thinking.
They believed diversity management was anessential component of their overall business strategy—enabling them to tapinto diverse labor markets, compete with more innovative products and services,and market to more diverse customers. These executives believed that diversitymanagement warranted a considerable expenditure of their time and effort. It not only made a difference in their business, but helpedthem to become leaders in their field. They also spoke with employees who noted: … the chief executives in their companies hadestablished accountability for their diversity initiatives.
Either they ormembers of their board of directors conducted formal quarterly or semiannualdiversity progress reviews, and they rewarded managers who achieved diversityobjectives with formal recognition, bonuses, and stock options. In two of thefirms we studied, the CEO or president administered sanctions to managers whofailed to meet diversity objectives.This explains that its not only enough for CEOs to believeand preach diversity, but to reward those who incorporate it to into everyday business. It is also important to hold everyone responsiblefor their actions. If some managers arenot meeting expectations, they should be trained and mentored to help build theirdiversity management skills. 1Names changed to maintain privacy