Exploring the Importance of Adaptability and Innovation in Navigating Changing Landscapes

Twenty years ago, the energy industry looked much different than it does today; the same could be said for the next 20 years. Emerging markets need reliable, renewable, low-carbon energy sources to propel their growth as the global economy gravitates toward sustainable energy solutions. Geopolitical instability also threatens grid centralization, requiring businesses to consider decentralizing their assets.

To lead amidst all these changes in the industry, companies will likely need to become more adaptable and innovative. That may require identifying areas within their business models where they can create more value and drive growth while retaining consistent operational excellence.

Below, we’ll break down what adaptability and innovation look like when navigating a changing global energy industry—and how businesses can achieve favorable outcomes.

How Do Adaptability and Innovation Drive Growth in the Energy Industry?

Companies in the energy industry can thrive amidst unprecedented economic shifts by exercising flexibility in how their business units operate, such as adjusting to asset-centric or function-centric models. Generally, the former enables you to optimize operations for specific assets but might silo top talent and experts, whereas the latter reprioritizes teams with specific experiences and success records to repeat their achievements with each new endeavor.

At a high level, companies must be able to reimagine and rethink their operations along these lines, as resilient businesses identify challenges within their operating models and adjust accordingly to improve performance and differentiate themselves from competitors. 

For instance, asset-centric approaches show that simplifying processes and reducing reporting lines improves the productivity of high-performance assets. Likewise, staffing these assets with dedicated, tailored experts with decades of operator experience increases the potential for consistent value creation.

Conversely, if assets appear to struggle with performance, putting together function-centric teams comprising your top-performing personnel will help improve outcomes. These functional teams can better focus on business endeavors like construction or mergers and acquisitions to better deliver repeatable success with each project they take on.

Understanding which functional units—when optimized—will provide significant, consistent, and sustainable value outputs can help energy businesses grow and adapt quickly in response to industry shifts. Employing such a strategy requires agility because of the need to implement multiple changes simultaneously without impacting productivity.

So, which key focus areas can businesses rethink to prepare for the future?

#1 Technology Advancements to Enable Speed and Efficiency

Although it may disrupt traditional operating models, technology enables productivity and ultimately drives growth in the energy industry. Certain job roles will evolve as companies introduce new technologies like generative artificial intelligence (AI) into their day-to-day processes to create entirely different workflows. The potential benefits outweigh the challenges disruption brings.  

Even the most skilled, experienced industry veterans can work faster when aided by more efficient data analysis and interpretation tools, reducing error rates and enhancing productivity. 

Likewise, virtual monitoring and simulation capabilities can minimize asset downtime by predicting maintenance timelines more accurately than traditional on-premise tools. When running multiple decentralized and globally distributed assets, faster AI-enabled technology provides the much-needed visibility to act quickly when challenges surface.

Generative AI is also becoming faster and more efficient with enhanced capabilities, providing companies with opportunities to unlock untapped potential across their functional units.

#2 Investing in Talent to Create Lasting Value

Whereas technology enhances productivity in the energy industry, shortfalls in staffing talent experienced with those technologies undermine intended outcomes. Consistent performance in the energy sector’s demanding environments requires certain specialist engineering, digital, and commercial competencies. When lacking that talent in crucial roles, businesses generally struggle to adapt or lead as the industry evolves. 

Furthermore, retiring or departing workers drain significant experience, mastery, and institutional knowledge when replacements aren’t trained to advance into their roles. These experts have refined their craft over decades and can offer invaluable insights into process improvements for long-term growth and sustainable efficiency. It’s critical for them to pass on this knowledge and expertise internally to your rising talent. 

Addressing these challenges may require companies to attract more competitive talent by offering more value, creating faster paths to career growth, or reshaping corporate culture to reflect market demands. Identifying new ways to upskill a workforce without compromising business operations goes a long way in creating long-term value for an energy company.

Managing the risks present in today’s oil and gas ecosystem may also require diversifying existing talent pipelines to onboard employees with non-traditional perspectives. For instance, instead of focusing on hiring individuals with a traditional petroleum engineering background, companies can expand their talent pools to those with computer science or business degrees if they provide complementary or comparable skill sets to traditional engineers.

#3 Leaning on Data to Make Critical Decisions

Businesses that rely on data to drive operational decisions typically thrive as an industry evolves because they can leverage various insights to navigate the complexities they face. 

However, it’s critical to collect the right data using the appropriate tools. With multiple business units (e.g., production, marketing, R&D, finance) operating simultaneously and collecting data about their specific operations, companies must decipher which insights are actionable from the complex data they analyze.

Typically, such datasets are unstructured, requiring fast, extensive analyses via advanced analytics capabilities like generative AI described above to derive meaningful insights that enhance productivity or drive growth.

For example, oil and gas companies leverage seismic surveys, well logs, and production logs to determine how to optimize production, model reservoirs, or predict equipment failures. In oil refineries, operators can detect potential flooding incidents that pose significant safety concerns by leaning on data-driven models of root cause analyses of previous events. Doing so protects operations and workers from being impacted by future events.

Similarly, marketers can use customer behavior data to understand which territories perform better than others and which markets provide opportunities for diversified expansion. That’s more important for businesses that operate globally because they can easily pivot from one market to another as soon as they realize shifts in customer behavior based on data analytics.

Partner with Altira for Continuous Growth

Remaining adaptable and innovative in a fast-paced industry like energy requires resilience and data-backed investments in the right tools or approaches. At Altira, we believe in collaborating with entrepreneurs who value innovation as a path to translating their ideas into much-needed products and services that will benefit the energy industry.

With over 20 years of investing experience, our team understands the ins and outs of the oil and gas industry. We can leverage our partnerships to enhance the value your business provides and commercialize your transformative ideas. 

Contact us to learn more about our services.