Harnessing the Downturn- Three timeless lessons can shape industry’s response in challenging cycles.
We all agree the oil and gas sector is facing tough times. Through my experience in GE, within this industry and others, I have learned three timeless lessons to remember at times like this. First, industries operate in cycles and we must learn to function through these by focusing on what we can control. Second, hard times often drive innovation,forcing legacy structures to change and industries to transform for the better. Third, challenging cycles often bring us closer to our customers, driving collaboration and disruptive innovation to truly meet their needs, changing the industry as we know it.
All three of these lessons stand true today.
While things can feel outside our control, we must acknowledge we can control how we respond to one of our most challenging cycles. At GE Oil & Gas we remain laser-focused on finding new, better ways to meet the world’s growing need for energy–in the face of whatever conditions the market throws at us. This is no easy task. Volatile markets and low prices are no harbingers of investment.
However, they do hasten my second lesson: much-needed innovation. Although innovation is ongoing–even during industry highs–this tough period has driven a much-needed focus on resilience, efficiency and operational maximization. Today’s biggest challenges all come back to providing the greatest value from every dollar spent, whether on opex, capex, regulatory compliance or maintenance. The truth is times like these are catalysts for innovation and disruptive thinking. Disruption comes in many forms: human, industrial and digital. GE Oil & Gas is working across this triumvirate: leading a new era of human partnerships and co-creation; introducing, smarter and more cost-effective technologies; and leading the way into a new digital industrial revolution.
Human disruption is driven by my third lesson: innovative collaboration. At GE we have long-believed solutions spring from many sources, and combining sources of inspiration in new ways drives innovativeoutcomes. This means the old relationship between customers and vendors simply isn’t good enough. Today, instead of developing solutions in isolation, we innovate in close collaboration with customers, testing, failing fast and learning, developing a relationship of mutual trust and respect that drives long-term value for both. True collaboration drives innovative practices. Through our Diamond Offshore partnership, we are creating a new service model for the offshore drilling industry. Our performance-based subsea blowout preventer agreement means GE Oil & Gas will own the BOPs onboard four drillships. Under the arrangement, we will provide “engageDrilling Services” for the four BOP systems, including management of maintenance, certification and reliability. Diamond Offshore will compensate GE only when the BOP is available. When cost and risk are at the top of operators’ minds, we are sharing the burden by fully investing in our equipment uptime and performance as a strategic partner in operations with our customers.
Disruption can come in multiple forms. Our partnership with BP is an example of both integrated collaboration and digital disruption. This offshore pilot program will reduce unplanned downtime through a co-created digital solution applied above the well, on the platform topside. The project is complex: applying remote monitoring and advanced analytics on an entire system of varying types of machinery from different manufacturers. Importantly, we are working closely with BP to fully understand, and meet, their specific needs.
Today, the possibilities for oil and gas driven by advanced digital capabilities are monumental: We are using a combination of advanced sensors, predictive analytics on real-time and historical data, and expertise from GE’s diagnostics engineers to assure up to 99.9% availability of assets. We believe digitization truly is the single largest step change for the industry and the foundation for its future.We can expect to go through many more cycles and must continue to focus on what we can control. Just as we take this long view, we need to recognize that now is a unique moment for innovation and collaboration to deliver a new future for industry. We must continue to innovate both the technology and the advanced manufacturing solutions we use to develop it. Most importantly, we must utilize the vast digital opportunity. Digital tranformation is certain: Today a game-changing competitive advantage will soon simply be necessary to remaining competitive.
This piece first appeared the OTC Show Daily, May 4, 2016, reprinted courtesy of Hart Publishing.