In the dynamic world of the oil and gas industry, the early project planning phases often resemble a complex puzzle. The same applies to the mining industry, renewables, railway, even nuclear, or chemical or any other industry where projects are complex, solutions are not clear, multiple objectives exist and there is a need for multi-level stakeholders’ alignment.
Senior managers and project leaders are tasked with navigating a landscape filled with high level of uncertainty, challenges, high stakes, and vast potential.
The key to mastering this puzzle lies in fostering cross-functional collaboration.
However, many executives and project leaders underestimate its significance or misunderstand its true essence. In this article, we'll explore the importance of cross-functional collaboration in complex projects, exploring the key misconceptions, highlighting common mistakes while emphasizing the transformative potential of opportunity framing workshops.
How big is this problem
Research suggests that working in silos and poor cross-functional collaboration might cost a company almost $8,000.00 per day in wasteful expenses!
The detrimental effects of poor cross-functional collaboration and siloed operations aren't limited to a specific industry. Companies across various sectors, including energy, mining, manufacturing, healthcare, and technology, can all suffer substantial financial losses due to these issues.
Warren Buffett once wisely said, "It takes 20 years to build a reputation and five minutes to ruin it."
In the context of poor cross-functional collaboration and its financial consequences, this quote is particularly relevant. Inefficiencies can quickly erode a company's reputation, which can translate into financial losses and lost opportunities.
The $8,000.00 per day statistic serves as a reminder of the financial impact of working in silos and poor cross-functional collaboration within organizations. To mitigate these losses and unlock potential financial gains, it's important for companies to prioritize effective collaboration, break down silos, and invest in strategies and tools that promote cross-functional cooperation.
“Employee engagement has reached its lowest level since 2015”, according to a new survey released by research firm Gallup.
“About 32 percent of the 67,000 full- and part-time employees surveyed were engaged in their work in 2022, while 18 percent were actively disengaged.
Active disengagement has risen each year since 2020 - Gallup Reports
The Ripple Effect of Unity
Cross-functional collaboration isn't just about different teams working together; it's a ripple effect that transforms organizations.
For example, in an organization developing a new product, a project manager could assemble a cross-functional team comprising engineers, designers, marketers, and customer support reps. Their collaboration will bring comprehensive insights into all the important aspects of the product from the start.
Cross-Functional Collaboration in the Energy Industry
At the heart of the oil and gas industry lies the early project planning phase, where complex decisions determine the course of multi-billion-dollar projects.
Cross-functional collaboration during the first two phases is about breaking down silos between exploration, engineering, procurement, production, operation, legal, health and safety, commercial, finance etc. teams.
It ensures that the right opportunities are identified and framed properly, risks are understood, creative options are explored, value drivers and tradeoffs are understood, stakeholders assessed and resources are allocated effectively. This collaboration is the key to streamlining the process, from for example identifying potential drilling sites to securing financing and optimizing supply chains.
The Power of Cross-Functional Collaboration at the Front-End Loading
Unlocking the potential of cross-functional collaboration offers lots of benefits. It enhances decision-making capabilities, reduces project risks, improves resource allocation, and fosters innovation.
Moreover, it minimizes the probability of costly project failures and ensures that projects are in line with the organization's strategic objectives.
Especially during the Front End Loading, it is important to ensure that cross functional collaboration is sufficient so that the project can be well defined before significant investment are made.
Research by Independent Project Analysis, Inc. (2011) has shown that project definition, or front-end loading, is one of the most significant drivers of project success.
Well-defined projects cost less, take less time to execute, and operate better and they require cross functional collaboration especially in the early project planning phases.
Myths That Cloud the Vision
Cross-functional collaboration is not about creating endless meetings, drowning in email chains, or stifling individual creativity. In fact, misconceptions about it can deter leaders from realizing its potential.
Common Misconceptions About Cross-Functional Collaboration:
Micromanagement: Cross-functional collaboration is not synonymous with micromanagement. It's not about overseeing every detail but rather empowering teams to make informed decisions collaboratively.
Endless Meetings: it's not about filling calendars with never-ending meetings. Efficient collaboration streamlines processes and reduces time spent in discussions.
Loss of Individuality: it doesn't mean sacrificing individuality or innovation. It enhances creativity by integrating diverse perspectives.
Common Mistakes Leaders Make:
Neglecting Opportunity Framing: One common mistake is neglecting to frame opportunities properly at the project's inception. This can lead to vague project goals, missed market openings, and wasted resources.
Communication Gaps : Failing to bridge communication gaps between different teams and decision-makers can result in misalignment, making it challenging to steer the project towards success.
Underestimating Stage Gate Process: Overlooking the significance of the stage gate process can lead to poor decision-making and increased project risks.
Opportunity Framing Workshops: Bridging the Gap:
Opportunity framing workshops act as a catalyst for cross-functional collaboration.
They provide a structured environment where teams can collectively identify, evaluate, and prioritize opportunities. The hands-on approach encourages shared understanding and empowers participants to frame projects effectively from their inception.
Here is our video explaining briefly what is opportunity framing workshop
Example: In a framing workshop, a cross-functional team comprising engineers, commercial, operation, corporate affairs, health and safety, finance experts, and procurement specialists collaborates to assess the feasibility of a new drilling project. Rather than micromanaging every detail, the facilitator guides the team in setting clear objectives, exploring project feasibility, and developing various options, decisions and strategies. This collaboration empowers each team member to contribute their expertise without the need for micromanagement.
Example: In a large oil and gas organization, leaders tend to believe that more meetings equal better collaboration. However, through a framing workshop, teams can achieve the same level of collaboration in fewer, more efficient sessions. Framing workshops are goal-oriented, with predefined outcomes and well-distributed roles, ensuring that time is spent productively, not merely discussing. They usually take between 1 to 3 days.
Example: Imagine a cross-functional framing workshop aimed at developing a novel renewable energy project. The team includes engineers, environmental scientists, marketing experts, and legal advisors. Rather than stifling individual creativity, this diversity fosters innovation. Engineers bring technical expertise, the scientists provide insights into sustainable practices, marketers contribute consumer insights, and legal advisors ensure compliance. The resulting project benefits from this collective creativity and addresses a broader spectrum of challenges.
Watch this video where I interview my colleague Frank about what is an opportunity framing workshop:
In each of these examples, it becomes clear that cross-functional collaboration, when correctly implemented through framing workshops, is far from micromanagement, excessive meetings, or stifling creativity.
It's about harnessing the collective strength of diverse teams to address complex challenges and frame projects more effectively from their inception.
The Stage Gate Process and Opportunity Framing:
Understanding the stage gate process and the role of opportunity framing is pivotal for project managers and leaders in complex projects. These frameworks help in making informed decisions at key project milestones, leading to a higher success rate and a lower likelihood of costly recycle or project cancellation.
In conclusion, cross-functional collaboration is not a luxury but a necessity in the oil and gas industry's early project planning phase as well as any other industry that eventuates around high impact complex projects.
To embark on a journey of effective cross-functional collaboration and learn how to navigate the complexities of the energy sector, contact us today for training or to arrange a workshop.
Contact us to discuss our training courses and workshops. We offer training courses on stage gate process and opportunity framing, online, in-person, off the shelf or custom made.
Let's bring your ideas to life and begin your next project with unity and clarity.
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