Transforming an oil and gas equipment leader: A case study

When a leading oil and gas services and equipment provider embraced a new vision to become a champion for decarbonization, it set in motion a holistic transformation program that would result in a 20 percent lift in gross income and a 35 percent increase in EBITDA after just one year.1

The need for drastic change became apparent in 2020 when the company saw sales drop by around 20 percent due to challenging market dynamics, including decarbonization and the COVID-19 pandemic. The company responded with a strategic shift—leading an “Energy Transition”—and sustaining its journey toward a low-carbon future with a large-scale cultural transformation.

The multinational organization, which designs, manufactures, maintains, and upgrades equipment across the entire oil and gas value chain, operates in more than 120 countries and has around 10,000 employees. To realize its new vision, the organization’s culture had to shift to be more inclusive, entrepreneurial, transparent, and globally diverse.

Starting with a common and inspiring change story

The organization embarked on a deep and sustained cultural transformation, taking a holistic bottom-up and top-down approach to shape and deliver a compelling change story. The main focus areas were to “aspire” and “assess,” ensuring the leadership team worked together while listening to their employees.

Focus groups acted as a cornerstone of the program. To develop the full change narrative, 80 employees attended three focus groups each, with the CEO and executive committee taking the insights, refining them, and sharing them back for further input. During these focus groups, people were:

  • Embraced by the organization: contributing to one common change story, delivered through a continuous organizational pulse.
  • Inspired by leadership: with leaders acting as role models for the new behaviors.
  • Encouraged to take ownership (inside out): taking deep personal ownership of change and engaging in energetic personal transformations.
  • Given targeted actions (outside in): with change agents acting as the engine of change, creating “viral” energy across the organization.
  • Grounded in vital moments: identifying and targeting moments of truth (MOTs) and driving participation in action planning and monitoring.

The organization’s change story leveraged six from–to shifts that defined the aspirations of the cultural transformation.

  1. From a product mindset to a solution mindset. Employees needed to learn to think more like entrepreneursnot simply making products function more efficiently, but also rethinking value propositions for customers.
  2. From fear of failure to experimentation. The organization needed to reframe failure by shifting the focus from personal judgment to purposeful learning. To promote an “experiment and learn” culture, the organization would need to be willing to shut down projects when they led nowhere, without negatively judging project teams, and embrace the learnings that come from failure.
  3. From slow, incremental innovation to fast, iterative innovation. The organization needed minimum viable products to launch into the marketplace, in order to test them, fail, pivot, move forward, and change the speed at which it delivered innovation to customers.
  4. From exclusivity to inclusivity. Success hinged on diversity of thought; embracing people from different backgrounds, and bringing in new ideas and capabilities.
  5. From DIY to partnership. Partnering was encouraged with the broader organization, with outside partners, and, in some cases, by acquiring new capabilities and technologies to find paths to differentiation. This required a shift from a “control and threat” mindset to one of partnership as a win–win with partners and suppliers. It also required a shift from micromanagement to trust and respect.
  6. From reactive to proactive. The organization needed to stop waiting for emergency signals before implementing change and to start leading the way from the get-go.

Change agents were engaged through focus groups, taking three key actions:

  1. Architect action plans. Each business unit’s change agent created a detailed action plan, leveraging the Influence Model—a framework for how to change mindsets and behaviors in an organization. Plans were defined autonomously in a bottom-up approach: the central team provided advice and counsel but no instructions on specific actions.
  2. Touchpoints to drive action. Regular touchpoint calls were organized in each business unit to support the execution of action plans. Plenary calls allowed change agents to celebrate successes and share best practices and lessons learned.
  3. Advanced onboarding or renewal. Change agents who could no longer devote time to the transformation were given the chance to “retire,” with new change agents onboarded in business units that needed additional help.

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Scaling initiatives: A three-layered transformation

The organization partnered with a McKinsey team and promoted change in two directions: “inside-out” change, which involved agents choosing to change their own behavior; and “outside-in” change, where agents were encouraged to change by external stimuli.

The team led the organization’s transformation across three layers, with three initiatives implemented in each layer to achieve maximum impact—operating across the self, team, and broader organization layers.

The ‘change self’ layer

The inside-out “change self” layer focused on management and change agents. First, each member of the organization’s top team was encouraged to formulate individual “from–to” goals, as part of their personal transformation. These were explicit, aspirational plans, based on where they were and where they wanted to be, according to specific indicators.

Next, two-day Personal Ownership Workshops were implemented to encourage participants to reflect deeply on their roles as leaders. More than 20 workshops were held, catalyzing transformation through commitment, a shared language, and set of habits manifesting the organization’s new culture.

Leadership coaching formed the third initiative in this layer. One-on-one coaching for the organization’s top ten executives helped to position them as role models in the changing organization.

The ‘change team’ layer

This outside-in “change team” layer focused on team dynamics. The first activity included team activation sessions, delivered through a series of tailored workshops reinforcing team collaboration and openness. These were designed to align managers with the overall cultural aspiration in order to support them in sharing the change story.

Next, cross-team collaboration workshops helped to unlock critical collaboration challenges between teams, in line with the themes of the cultural transformation.

Lastly, leadership capability-building sessions helped to stimulate dialogue and organizational learning on diversity and inclusion.

The ‘change organization’ layer

This outside-in “change organization” layer sought to foster change among all employees across the organization, through the creation of a powerful change story. This was reinforced by personal MOT stories, shared by employees. The fusion of personal MOTs with the organization's story enabled employees to invest in the change and bring the overall change story to life.

Second, a series of focus groups was held to collect input on the change from 150 employees. The focus groups explored organizational challenges and employee suggestions of possible solutions.

The last initiative involved change agents—mobilizing more than 200 change agents to drive change activities on the ground.

The vital role of change agents

The initial focus group attendees became the core change agent group. Change agents were voluntary and did not have a dedicated time. They had a great deal of autonomy to develop bottom-up action plans and they also provided sensing and upwards feedback on transformation progress.

Measuring impact: Not just about performance

After two years, around 200 change agents were active across the network, and after 30 months, the transformation produced meaningful impact on the organization’s performance and people.

In the first quarter of 2022, the organization witnessed an increase in sales growth of more than 50 percent from the previous year. In the first year after the transformation, gross income grew more than 20 percent and EBITDA by 35 percent (2021 versus 2020).

After undergoing the various initiatives, 85 percent of people in the organization understood the “why” of the transformation and more than 75 percent could see the desired new behaviors in place. More than 90 percent of respondents to a culture survey started making conscious efforts to be proactive; 87 percent took actions to be more inclusive; and 62 percent noticed behavioral changes in the leaders of their units.

Respondents shared thoughtful insights about the qualitative impact of the intervention. One said: “This is a great initiative. It gives our organization the opportunity to reflect on our behaviors and the way we’ve been working for decades.”

Another reflected on the importance of recognizing growth: “We should all be proud of our progress. It reflects the commitment and hard work of our leadership, our change agents, and everybody in the organization.”

Shaken by challenging market conditions, the organization embarked on a broad intervention to align its culture with its vision to become a leader in decarbonization.

Through a powerful change story, workshops, focus groups, and a three-layered, bidirectional process of transformation, the multinational achieved the wide-scale participation and ownership needed to achieve its vision. The transformation succeeded in growing sales and income.

One survey respondent described the importance of the program and maintaining focus going forward: “A vibrant, empowered, contemporary culture enables us to tackle business challenges and charge into the future with confidence and agility. We must keep up the momentum and focus on entrenching the ‘to’ behaviors in everything we do.”

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