OE readers won’t need much reminding of the parlous state in which oil and gas currently finds itself. That’s particularly the case here in the North Sea where the price slump is compounded by dwindling reserves and high operating costs.
By contrast, a similar-sized UK engineering sector, the car industry, is going from strength to strength. Last year, output was the highest for a decade and is projected to soon exceed 2 million for the first time. And this is a success story with an international dimension: foreign manufacturers have invested billions here whilst three-quarters of production, from family hatchbacks to prestige sports utility vehicles, or SUVs, is now exported.
Back in the early 1990s, whilst making career choices, I would love to have joined the now-flourishing UK car industry. At that time, however, opportunities were limited as the sector was still emerging from a state of flux; many UK readers will recall the poorly-designed, badly-built product range that brought strike-prone British Leyland to its knees. No-one would pretend that the challenges facing the oil and gas and the automotive sectors are anywhere near alike but key parallels certainly exist.
I recently picked up a number of books on the car industry including that of Bob Lutz, an engineer with a global career, albeit one more centered around Detroit than the English Midlands. As the title (Car Guys vs. Bean Counters: The Battle for the Soul of American Business) suggests, such accounts rarely set out to be fully objective but Lutz remains renowned for relentlessly promoting better engineering over cost-cutting. His track record looks far from unblemished (perhaps unsurprising noting his personal motto: “often wrong, rarely in doubt”) but I was left reflecting if his experiences might nevertheless provide some food for thought in terms of the wider role of engineers and how we might look to make a difference in difficult times.
Many of us will be familiar with the challenges associated with delivering change in an established production environment. Concerned over falling quality, Lutz spent time on the shopfloor uncovering root causes, not berating the workforce. His “bite-sized” programs (paint finish, panel gaps, even “door clunk”) might sound trivial, but they quickly transformed customers’ perceptions. Similarly, targeted, measurable initiatives are now driving up offshore production efficiency. (It’s worth noting here that numerous sources of inspiration now exist; Nexen’s water-injection improvements were attributed to the UK Olympic cycling team’s marginal gains theory.)
Arguably, it was ex-marine Lutz’s approach to communication, for better or worse, that most marked him out amongst other engineers. Back in the office, his style was direct to say the least and resulted in him seeking alternative employment on more than one occasion. (Warning: exercise caution before replicating it in your workplace.)
But only by openly engaging with management he was able to deliver positive change. By contrast, how many times have we either chosen not to speak up at a meeting or backed off at the first hint of opposition? In these difficult times more than ever, we engineers can make all the difference to a project outcome. But we can only do that if we’re prepared to make ourselves heard. Perhaps not a Lutz levels, though.
Even the Land of the Free needed to curtail free speech with engineer Lutz around, though. With America’s ‘big three’ (Chrysler, Ford, General Motors) sinking fast in the 2008 recession, their CEOs headed for Washington. There, they ran into a grandstanding panel of Congressmen who subjected them to a chastening televised grilling. Lutz was appalled, confiding that he wouldn’t have taken that nonsense from anyone. (Except he used a shorter word than “nonsense.”)
Ultimately, though, the federal government did come good, despite public skepticism (in an election year) towards bail-outs. Few of us engineers ever go pitching to government for billions, but the messages are clear enough: see the big picture and understand others’ perspectives. We can only speculate how the US car industry might look now had Bob handled the negotiations.
Moreover, Lutz was an engineer who never forgot the end-product or the paying customer. He recalls guiding the hybrid project towards a simple “all-electric” urban driving mode whilst fellow engineers agonized over a complex petrol-battery arrangement. The resultant 2010 Chevy Volt uniquely offered buyers a silent, zero-fuel commute and helped transform GM’s image.
Right now, new technologies (and smarter ways of deploying them) have never been more important in oil and gas. Whilst our customers are mostly industry-internal, it’s nevertheless critical to understand why we’re doing something and to quantify what benefits it might ultimately bring. And if the answers change as the project evolves, it’s probably time to re-assess.
Today’s final ‘Lutz lesson’ is more for the corporate strategists than us engineers. Re-joining GM in the early 2000s, Lutz unsuccessfully lobbied “the suits” to seize the initiative in fuel economy. With the Japanese still unable to crack the lucrative “big stuff,” he instead received millions in research and development funding to deliver a new range of full-size SUVs and pick-ups. America fell in love with these “old school” behemoths… until oil prices spiked, that is.
Suddenly, customers switched in droves to Toyota (especially its Prius hybrid) whilst GM spiraled towards Chapter 11 bankruptcy with poor Lutz himself castigated as a dinosaur by outraged environmentalists. Core strengths and short-term corporate goals only go so far; anticipating and driving change are key. If you don’t, your rivals will. Perhaps there’s something there both for oil companies (sorry, energy companies) and their technology providers.
The UK car industry was once in dire straits but it’s roared back. Hard work and smart thinking are essential to ensure it stays that way; the descent from the genius of the original Mini to the direness of the Marina took just a decade. In oil and gas, things change even faster. Hopefully, we engineers can not only respond to the current downturn but also put industry in good shape for when the market ultimately recovers.
Sanjoy Sen is a Senior Facilities Engineer at the UK Oil & Gas Authority. He is a chemical engineer by background and also holds an MBA, an MSc in Petroleum Engineering and an LLM in Oil & Gas Law. At the 2015 general election, he stood as the Scottish Conservative & Unionist Party candidate in the Aberdeen North constituency. Opinions expressed are his own.
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