KMI Adjunct Instructor and frequent guest blogger, Howard Cohen, CKM, contributes again to this week's edition: 

"Booz Allen Hamilton is emerging as a thought leader in Knowledge Continuity and Knowledge Transfer. The use of predictive analysis, data science, reputation and sentiment analysis brings new light and ability to the challenges associated with crew change and workforce management. Booz Allen seeks to identify the best approach in creating the most efficient transitions in order to save on cost, lower risk and create value in a repeatable and measurable process."

Howie shared this piece with us, originally published by his colleague at Booz Allen Hamilton, Steven Senterfit, on April 28, 2014:

A Practical Approach to Knowledge Continuity during
‘The Great Crew Change’

A major demographic shift within the oil and gas industry is underway that will leave many companies with shortages of key skills at just the wrong time — as U.S. energy discovery and production is increasing dramatically year over year. According to some reports, it was as much as 14 percent in 2013.

Many industry watchers have dubbed this “the Great Crew Change.” Not long ago, GE Oil & Gas CEO Dan Heintzelman was quoted saying that an estimated 5 million oil and gas workers, roughly half of the global workforce, will be eligible to retire in 2015. The first wave of baby boomers (Americans born between 1946 – 1964) reached the potential retirement age of 62 in 2008, and another reaches this magical age 62 every seven seconds until 2025.

What we can expect is that many of the most senior, experienced industry professionals will retire in the next few years, leaving their companies to seek new strategies to find the next generation of oil and gas engineers and other technical professionals.

The pressing issue becomes how to maintain energy growth projections in the face of the looming need to onboard larger numbers of new employees every year. This is the first and arguably the most important of current operational and managerial challenges.

There also are potential impacts on organizational culture, including succession planning for senior executives, in addition to extant skill with the major business imperatives such as reducing cost and risk, improving safety and environmental impacts, and increasing shareholder value.

What underlies all of these challenges from the Great Crew Change is the potential loss of vital knowledge, often hard-earned by each individual key employee, which helps oil and gas companies survive and thrive in a demanding global marketplace.

In an industry in which technology innovations are making more efficient and safe extractions of oil and gas, knowledge is certainly a new capital. Without establishing the proper strategies and tactics to manage knowledge continuity, companies risk impacts to their top and bottom lines. Intuitively, it is clear that when core professionals leave an organization, they take their “institutional memories” with them. Unless the organization has a system in place to capture that information and pass it on to their successors, vital knowledge is no longer available to help the enterprise respond swiftly and intelligently.

The key to surviving this generational handoff, and even taking competitive advantage of it, is to plan carefully to ensure knowledge continuity is maintained — just as the corporate enterprise plans for business continuity.

Here are five initial steps worth careful consideration that can be implemented quickly to strengthen knowledge continuity:

1. Establish a knowledge continuity strategy. Efforts should be tailored and tied directly to your organization’s risk and operational / business resilience profile, starting at the global position and extending down to and across all the respective key business process areas of concern, including exploration, drilling, production and refining.

A knowledge continuity initiative can be developed through a skilled planning and implementation process. This will be aided immensely by the use of risk modeling where the cost is the “knowledge value” and the timelines are distance to the employees’ likely departure from the organization. The objective function is the minimization of the rate of knowledge loss, i.e., minimization of “cost” outflow.

2. Identify key roles and processes across the enterprise. The critical skills where knowledge can walk out the door are going to belong to employees who are within 10 years of retirement. Jobs will include core executives, managers and technical professionals. It will be important to analyze the company’s current skills, turnover losses and pending retirements by job rank and specialty, to identify the highest risks to business and knowledge continuity. In oil and gas, examples of vital skills and job positions include:

• Field, asset and plant knowledge, associated with optimal completion strategies, best mud techniques, refining processes, etc.
• Exploration geologists who know that a particular type of formation is always a good play, and the many subtleties associated with having worked as an onsite geologist at drill sites. For example, that might be someone who knows not to worry about that gas signature at this particular depth in this field; but do worry about circulation loss at this depth in this field, and so on.
• Specialists in log and seismic interpretation, including experts using specialty or proprietary software for exploration and drilling.

3. Implement context-based knowledge resource kits. Knowledge continuity resource kits are needed for critical roles, like drilling engineers, and for key decisions related to assets or process areas, such as well work-overs. These kits are indispensable in providing operational context and awareness for individual, group and community-based performers. They can take the shape of reference guides, training videos, past maintenance history, etc. The difference over current repositories is that resource kits are accessible real-time and linked to the individual’s role and processes.

With the rapid pace of innovation, a resource kit might soon be accessible to a field engineer through smart safety goggles using pattern recognition on a viewed platform, immediately providing exemplar ‘best practices’ for the operation (e.g., how to correctly circulate so as to produce a good set of drill cuttings for the field geologist). This is part of a larger suite of possibilities. For example, today I need to know how to specify the optimal mud weight. From a customized search system, up would appear a complete video repository of calculations, actually effecting the change, making the measurements, whatever I might need in order to be able to achieve the task or make the right calculations at 3 a.m. when no one else is around to assist.

4. Link knowledge continuity to competency programs and career development. It is essential to link knowledge continuity to the company’s system for determining and evaluating competencies and career development. For example, integrating the knowledge continuity resource kits for drilling with the drilling competencies and progression of the drilling career will ensure resource kits are matured, and that best practices and lessons learned are properly captured.

5. Identify opportunities for smart processes. Develop systematic ways of capturing valuable knowledge into the company’s business continuity systems. For example, linking social and mobile systems to business process and workflow automation to capture operational knowledge helps the company “bank” institutional knowledge that can be subsequently shared with new employees over time, without risk of loss. Such smart process applications become digital repositories of critical knowledge and past decisions, capturing knowledge assets in a streamlined manner. These new systems incorporate a “push” model to present relevant equipment problem resolutions. A clear example is the use of a heads-up display integrated in problem-solving interface with guidance from pervious operators. This idea encourages sharing knowledge and decision-making by packaging information into a “collaboration cart” for storage and later use.

Knowledge continuity requires both communication and clever knowledge valuation. Employees must be trained to formulate the critical information and skills they possess to share with others who will follow them into key roles, and to determine what information needs to be shared, and then seamlessly making that information available to others.

It sounds simple enough. However, standing up an effective knowledge continuity management program is complex, especially in a multifaceted industry like oil and gas. For the knowledge to provide continuity to the enterprise, it must be seamlessly shared, accessible, and enhanced for decision-makers and managers.

The oil and gas companies whose leaders recognize and work to establish solid knowledge continuity processes and practices will have a competitive advantage in the years ahead.