Leading Change by Embracing Diversity

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The downstream oil and gas industry has faced an extremely difficult challenge over the past few years from 2015 to 2017. How were companies in this industry going to survive 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 barrels of oil at eighty to one hundred dollars? If companies wanted to survive in the longest downturn in industry history, many company-wide changes had to take place. For a major oil field service company in the Gulf of Mexico region, this meant merging departments and offices, in addition to laying off 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 stepped in.

Jessie[1], 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 much different than what he was used to supervising. His previous department was large with well established procedures and protocols. They had many global advisors that could answer any questions during any hour. Our division had the same human capital, however our knowledge lived in the operations team. Our global advisors were limited, and did not always answer their phones on nights and weekends. Our field service personnel team had multitudes 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 advisors had less than ten years of experience. Jessie ignored repeated request from the office personnel to acknowledge the field service personnel. He felt that the field service personnel were replaceable and not worth his time. They made sufficient money for the worked performed, and they should be happy to have 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 pursue other careers.

Jessie did not value the human capital he had encountered on his new team. The team realized that new management believed they were replaceable. They feared for their jobs even though they were knowledgeable, hardworking and team oriented. Jessie had a Theory X perspective. He assumed all the employees were easily replaced because they were “just field workers”. A study by Lawter, Kopelman, and Prottas (2015) looked at both Theory X and Theory Y management styles with on job performance. They proved that there is not one way to evoke maximum output from all types of people. They concluded: (Lawter, Kopelman, and Prottas, 2015) “not only do managerial attitudes matter, but how managers behave towards employees affects both individual and group level performance.” As people began to quit, service quality quickly declined.

Jessie’s second mistake was not valuing and understanding the diversity of his new team. He continued the management style he had perfected with his previous team. He attempted to use fear and money as a means to keep employees putting forth their best effort. As the department continued to lose field personnel, office personnel realized they could no longer be the best in the field without proper offshore service support. These employees became disengaged and disgruntled. Within two years the department lost over half of the original team that was merged with Jessie’s division.

Jessie’s original meeting had started the merge off on a positive note. However, management’s actions and decisions proved to the team that Jessie was not committed to making the merger beneficial for both parties. He had good intentions of bringing the small team mentality to his large group, but he didn’t follow through on this promise. Olsen and Martin (2012) discussed the importance of commitment when managing diversity. “Organizations whose DM [Diversity Management] approaches focus on leveraging diversity to achieve business-related outcomes hold diversity as an instrumental value, because diversity is viewed as instrumental in achieving business success. In contrast, organizations that view a diverse workforce itself as an objective without explicitly considering it as a means for achieving business outcomes hold diversity as a terminal value.” This was 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 uncertainty Jessie instilled.

Jessie never showed an interest 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 in regards to diversity. It was noted:

For them, diversity encompassed more than race and gender; it included age, sexual orientation, disability status, national origin, and even style of thinking. They believed diversity management was an essential component of their overall business strategy—enabling them to tap into diverse labor markets, compete with more innovative products and services, and market to more diverse customers. These executives believed that diversity management warranted a considerable expenditure of their time and effort.

It not only made a difference in their business, but helped them to become leaders in their field.
They also spoke with employees who noted:

… the chief executives in their companies had established accountability for their diversity initiatives. Either they or members of their board of directors conducted formal quarterly or semiannual diversity progress reviews, and they rewarded managers who achieved diversity objectives with formal recognition, bonuses, and stock options. In two of the firms we studied, the CEO or president administered sanctions to managers who failed to meet diversity objectives.

This explains that its not only enough for CEOs to believe and preach diversity, but to reward those who incorporate it to into everyday business. It is also important to hold everyone responsible for their actions. If some managers are not meeting expectations, they should be trained and mentored to help build their diversity management skills.

[1] Names changed to maintain privacy

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