The legendary Jack Welch liked to give General Electric ’s promising young leaders “popcorn stands” – relatively small profit and loss (P&L) units to run on their own. His logic was simple: Provide talented but untested executives the incomparable experience of being personally responsible for how a business performs, but keep the scale small enough to make the risks tolerable. Executives such as Jeff Immelt , GE’s current CEO, ran P&L units while still in their twenties. The result? Early in their careers, GE’s rising stars developed the breadth of leadership competencies required to lead an entire business, which accelerated their path toward becoming well-rounded senior leaders.
Right now there is compelling reason and opportunity for oil and gas companies to provide “popcorn stands” to their own rising stars.
See The Need
The oil and gas sector is more dynamic today than it has been for decades, especially in North America, where the industry is a prime driver of job creation and the economy. With nearly $5.1 trillion in capital expenditures and three million plus jobs to be added in the United States alone over the next 20 years, the industry will continue to rapidly expand. To sustain such dynamic growth, the industry will need its young executives to step up into broader, more complex leadership roles sooner rather than later.
Several challenges stand in the way. In demographic terms, energy’s rising class of leaders is quite thin. Years of weak energy prices and reduced enrollment in STEM (science, technology, engineering and math) disciplines drove talent into other industries. Following a spike in oil prices and the extraordinary growth of the oil and gas industry in the past several years, the demand for talent and leadership grew immensely. The Society of Petroleum Engineers estimates that up to 50% of skilled workers in the industry could retire within the next few years. With a continued shortage of talent and the incoming wave of retirement, the industry will face many challenges in finding and developing the next generation of leaders. At the same time, oil and gas relies heavily on experts who work within functions, ensuring that specialized focus and expertise deliver consistency and excellence. While this approach delivers sustained performance and minimizes risk, working primarily within functional silos makes it harder for rising leaders to gain the broader and more strategic perspective they will later need to oversee entire business units.