The Next Generation

An Ask the Expert feature with SMU Cox School of Business

Frank Lloyd explains how a relationship with a business school can help the oil and gas industry to develop the next generation of leaders.

In today's volatile and challenging business environment, oil and gas companies need leaders at every level who can see what lies ahead, understand the issues facing their organizations, and initiate actions to meet the challenges. This is a change from the past when it was enough to train technical professionals to produce shareholder value as well as oil and gas. But the leadership game has changed. Listen to what a CEO of a gas transmission company says she now needs in her leaders.

"We believe that our 21^st century leaders must reflect strong ethics and values, emotional intelligence and a cohort approach. Good leaders need to be able to embrace change, overcome failures and foster a culture that demonstrates they are vigilant in sustaining growth, learning and embrace the right course of action."

Why is leadership development now a CEO's game, and why are they looking for a new kind of leader? One reason is the complexity and volatility of the global marketplace. These forces drive an expanded definition of leadership throughout an organization. The world is too complex and fast changing to accept anything less than the ability to make money, grow strategically and mobilize and motivate a workforce at all levels.

The second reason is demographics. Remember Y2K? Companies in the oil and gas industry face a demographic crisis of even greater proportions: the potential retirement of up to 80% of skilled oil and gas professionals in the next five to 10 years. Call it 'Gray 2K.

Through relationships with top business schools, energy firms can develop high-level leaders to meet the challenge of the changing leadership game. For example, a mid-sized exploration and production firm that had grown through acquisition and merger needed to integrate a management group that was widely dispersed throughout the Americas. They worked with a business school to give the group a common business language and leadership tools through a set of programs tied to their succession plan. They provided internal learning opportunities for mid-level managers through custom programs and externally focused learning for high level executives through participation in an open enrollment program. Over time, the school and the company worked together to adapt program content to changing organizational needs.

And oil and gas firms should expect a fifth thing from a business school: an understanding of the industry that assures relevance. Firms should not expect business schools to teach experienced managers the oil and gas business - they know it better than most academics. Rather, business school instruction should enable experienced oil and gas managers to apply cutting edge business thinking to their industry. It all adds up to a true educational experience: one that is not solely about business results but that challenges assumptions, connects with fundamentals and fosters openness to change.

Companies can expect this from today's leading business schools because the best ones use relationship based and learner driven delivery models that blur the line between formal training and real life. They utilize tailored and flexible teaching methods to promote application of learning. And they bring a sophisticated ability to assess the return on investments of time and money in leadership development. As a result, oil and gas firms can expect the best business schools to provide them with an industry-oriented resource to develop tomorrow's leaders today.

Frank R. Lloyd is Associate Dean of Executive Education for the Cox School of Business at Southern Methodist University.

Top four

Why can oil and gas CEOs and their senior HR teams turn to business schools to help them address critical strategic problems in leadership development? Oil and gas firms, like any company, should expect four things from a top business school:

• Broad research-based content that is true and tested
• A purpose built learning environment that removes managers from the pressures of day-to-day operations to think and behave differently
• Professional educators who build capability, not dependence
• Access to a full university where the right experts are available regardless of discipline