Fad Diet vs Fit For Life
I’ve worked in the Oil and Gas industry long enough to have gone through a few boom and bust cycles, and with the arrival of Covid-19 the industry is suffering another oil price crash, the full depth of which is yet to be understood. The reaction to all previous oil price crashes has essentially been the same each time, and in many ways the industry reaction is similar to a lot of people’s approach to dieting.
Many people go though the cycle of spending a large amount of time adopting the devil may care attitude of the unrestrained before something provides a spark of motivation, whether it’s New Year resolution time, a milestone birthday or a steep flight of stairs leaving them more winded than they are willing to accept. At this point action is taken.
The commitment level at this point is often considerable with results expected fast. Extreme diets are adopted to lose as much weight as quickly as possible. Cupboards are emptied of temptation and exercise classes are booked for every day of the week. The outcome of this is that the results do come fast. Weight falls off, fitness levels increase, belts are taken in and overall health is vastly improved.
One of the biggest dangers with this approach is how seductive it is. On the face of it the desired results have been achieved, and achieved quickly. Scales no longer hold any fear. Family and friends compliment the individual on how well they’ve done. Any naysayer voicing caution that the results may be fleeting can be easily dismissed as the new specimen of health swears they’ll now be like this forever.
The parallels to the Oil and Gas industry are probably already apparent. When a price crash happens organisations look to get their expenditure down with immediate results. This will be an almost cut-throat reaction, with the only objective to be to reduce outgoings. Very little thought will be given as to where there is genuine over-spend and no resultant increase in value. Instead of decreasing overspends whilst still maintaining output, there will often be the approach of cutting budgets across the board by a standard percentage, and to do this they will assign assets a reduced target. Contractors will get their contracts terminated or their rates cut should they remain. Projects will be shelved, improvement initiatives stopped, free lunches binned, headcounts will be reduced, and with all this the targets will be met. There will be townhalls declaring the success and applauding those that remain for their resilience during these tough times. There will then be catchy statements around being “Fit for 40” or similar. Any naysayer voicing caution that the results may be fleeting can be easily dismissed as this new fit, lean, efficient organisational animal that can cope with any tough times ahead is here to stay.
The problem for both the individual and the industry is that this kind of dramatic approach is very rarely sustainable for 3 main reasons.
The first is that some of the results are not real. When a dramatic amount of weight is lost in a short space of time the individual can look outwardly healthy but on the inside the body is in a state of shock. Dramatic weight loss diets are deprivation diets that are focussed on losing weight by almost any means necessary. As a result, yes, some fat is lost but so is water and vital muscle. The body is also missing vital nutrients as the calorific restrictions of extreme diets means it’s extremely difficult to get but aIso retain the essential vitamins and minerals required for effective operation. In effect the body is starving.
For the Oil and Gas industry dramatic cost cutting leads to exploration being stopped, equipment upgrade projects shelved, maintenance crew sizes reduced and financial approval thresholds for mid and lower management reduced to the point of irrelevance.
These impacts are often the cause of the second reason that the dramatic approach is not sustainable.
The body can not starve in the long term if it is to survive. It needs sufficient vital nutrients, hence it will crave variety of diet. It needs to be allowed to recover from hard workouts, not punished day after day, or it will cease to function as a result of over training.
For the Oil and Gas Industry, without exploration it cannot continue. Without equipment improvements and sufficient maintenance crew sizes the asset will fall into disrepair and future reliability and availability is compromised to the point that assets cease to be economically viable far earlier than they should.
The reaction to these issues for both the individual and industry is that both the body and the organisation fight against the changes to get the resources that they need. The body sends hunger cravings to the brain, vastly increasing the chances of over-eating. It is also far more likely to retain fat than it was before as it prepares itself for lean times in future. For organisations, when any restrictions are lifted team leaders are more likely to sandbag their teams workloads to protect against future cuts. More opex would need to be spent repairing or replacing equipment that has failed through lack of maintenance.. Before long the individual and the organisations are back where they were before, largely as a result of the third reason that the dramatic change is not sustainable.
That third reason is that the change was impractical. There is very little flexibility, with the individual required to follow a strict and structured set of rules about what they can and can’t eat. The volume of food being taken in is too low to sustain a healthy lifestyle. The exercise regime is too demanding in both time and effort to be maintained, particularly given how different it is from the individuals lifestyle before. There are just too many sacrifices.
For businesses the loss of exploration is not sustainable as it would mean the end of the business. The reduction in maintenance numbers results in increasing maintenance backlogs. Also the controls are being enforced by the senior leadership who begin micro managing, having to approve the procurement of almost everything as well as endorsing every contract extension and new hire. There comes a point both they, their reports and the organisation at large simply cannot sustain this. Whilst the intervention has achieved the short term results, the core processes remain as before. In effect the leadership have stretched an elastic band. As soon as they release the tension, which they must as they are unable to sustain it, the organisation will spring back to working as it did before.
While it is possible to follow a strict regime for a short period, and this is why it will work in the short-term, the reality of day-to-day living and business will soon kick in, and the impracticality of following a military-style regime will become overwhelming. For the change to truly stick it requires balance, not deprivation.
It should be noted that this article is not intended to be blindly critical of the steps taken by the industry previously. There are times when a dramatic approach is necessary simply to survive, which is exactly why the industry has adopted these approached in the past. Once the initial weight has been lost, however, simply adopting the same approach will not work without causing harm. To continue to make healthy progress the focus must shift to the lifestyle change, which is far harder but ultimately what will work for the long term. This kind of change takes longer to get results as they are, by nature, gradual. By making small changes with both a target and sustainability in mind the person changes their lifestyle and way of living to give them the results they want. Organisations must also do the same.
As opposed to simply cutting crew sizes and letting backlogs build up, organisations have to look at their maintenance strategies and ensure they are optimised to deliver the outcome required for the minimum cost possible. Maintenance teams must then be resourced to deliver this maintenance. Work Management Processes have to be updated to place emphasis on only executing work necessary to support business objectives. Work preparation must be detailed and include costs estimates so that costs are considered and not just resources. Projects and improvement initiatives should be reviewed to determine if they need permanent headcount to support or can they be packaged as deliverables and outsourced to avoid headcount creep. Financial approvals have to be given to the position with the most direct control of the work, with their responsibility clearly explained.
For the Oil and Gas industry to be truly fit to operate in a low margin environment it needs to change it’s lifestyle. Their daily business has to be geared towards delivering work with the maximum possible efficiency to maximise wrench time and minimise cost. The cost of executing a job has to become a genuine consideration when approving it to proceed. The whole nature of the industry has to change from one of high margin to low margin. If these changes are never implemented the fad diet cycle of the industry will continue and the inevitable shortening of lifespan incurred.