Trying to Decarbonize? Make Sure Your Leaders Are Aligned

Decarbonization is one of the biggest challenges facing the oil and gas industry today as regulators, investors and politicians ramp up the pressure for reductions in carbon emissions.

How does an industry that is one of the largest global contributors of greenhouse gas emissions get to net zero by 2050?

The challenge is not lost on oil and gas business leaders.

KPMG and Eversheds recently published a survey of CEOs and senior business leaders that found that less than half of organizations felt that they had a clearly defined plan for decarbonization.

Yet almost all (93%) acknowledged that climate change would require significant changes to their business. 

That gap between knowing that something needs to change and actually making it happen is one of the topics discussed in a special Oil and Gas IQ webinar earlier today.

In that presentation, John R Dale, managing director of ALULA, argues that leadership alignment is one of the first steps to addressing decarbonization in the oil and gas industry.

He says that as companies launch new low-carbon business models, they can waste a lot of time redoing and repeating work without making much progress if alignment isn’t established successfully at the start.

That means getting everybody to pull in the same direction, getting them on board with the needed changes, and ensuring they understand what is needed from them to effectuate change.

“Alignment is a process,” observes Dale. “Not an event.”

A common mistake, he explains, is to run a two-day workshop on a new change. What happens after the workshop? Everybody goes back to business as usual, and the new initiative fades into the background as operational priorities and challenges command attention.

Instead, leaders need to have frank discussions around what they expect to see and how they will monitor for progress within their business units.

What does success look like? What are the leading and lagging indicators to indicate whether they’re on track? What specific things should leadership be doing and saying to drive the business forward?

READ: Exclusive Report: Planning for the Organizational and Operational Impacts of Decarbonization

Practically, though, what can you do to ensure leadership alignment?

One of the tools that Dale recommends is the use of what he calls the DCOM® matrix. The name stands for Direction, Competence, Opportunity, and Motivation:

• Direction – Do leaders have a clear direction on what they’re doing, why they’re doing it and how they’re going to do it?
• Competence- Do they have the skills and knowledge to do what they need to do?
• Opportunity – Do they have the time, the resources, and the tools?
• Motivation – Are they bought in? Are they engaged?

Dale explains that the tool effectively boils down to assessing whether leaders “can’t do or won’t do.”

The image below (reprinted with permission, copyright ALULA) shows sample data on how the matrix can be used to assess leadership alignment and specific actions that teams can take to drive the right leader actions and behaviors.

The matrix identifies who is important for the change, seeks to understand their issues or concerns and then identifies what specific actions are needed from that leader to support the initiative.

By using the DCOM assessment, Dale says, you can quickly identify where you have gaps and what you need to do to close them.

Interested in learning more?

How to Get (And Keep) Leadership Alignment to Operationalize Decarbonization is the first of a special three-part series on preparing for the organizational impact of decarbonization. The series is free to attend and open to all professionals working in the oil and gas industry. Register online to access all three webinars, with part one available immediately. The next webinar in the series - Assessing Your Cultural Preparedness For Decarbonization – will be held on August 4 at 11 am EST. Register now to reserve your seat.