Can Tech Learn From Big Oil?
March 23, 2017
Six months ago, I left my job as a Project Manager at one of the world’s largest integrated oil companies to join Connected as a Product Manager. In my previous role, I worked on the development and construction of various infrastructure projects across Canada. Having spent 3 years in the oil & gas industry, I learned first-hand how energy companies operate, manage their workforce, and make strategic decisions.
Since my background is very unique in the tech industry, people often ask me how my experience in oil & gas relates to building and delivering great digital products. This is a great question because, on the surface, there doesn’t appear to be too much in common between Big Oil and disruptive tech.
The Oil & Gas industry is fundamentally a commodities business, where the key to success is reliable, incremental, and low-cost operation of physical assets such as refineries, wells, etc. In contrast, today’s tech companies manage rapidly changing technology and a fiercely competitive landscape to build new, innovative products that delight customers. When it comes to workplace culture, these two industries could not be further apart from one another on the spectrum.
I’ll be the first to admit that when I first started in my new role at Connected, it wasn’t immediately clear to me how some of the unique aspects of the oil business extend to tech. Having now spent time in both industries, my experiences provide some interesting insights for building and delivering great digital products.
Here are three lessons from oil & gas that can help technology companies build better products:
1. Think long term, like really long term
During my time in the oil & gas industry, one of the largest capital investments my company made was in a large-scale oil sands project near Kearl Lake, Alberta. This was a three-phase, $20B open-pit mining project with a lifespan of 40 years. That’s right, 40 years. While this range of long-term planning is not practical (or even possible) in tech, the idea of thinking for the long term leads to building better digital products.
In tech, the principle of long-term thinking can be applied in many ways across a product’s lifecycle. For example, one of the biggest issues we try to avoid in development is technical debt, which can be defined as the cost of making a new change to a product’s codebase. Developers strive to write clean code, that is, code that is modular, reusable, extensible, and well-tested. Taking the time to write clean code helps reduce technical debt in the long run. It’s an investment in the future and an example of technical long-term thinking.
Thinking for the long term can also surface important insights at the product level too. It can often be useful to think of products as specific solutions to problems. Ask yourself, does your product provide a temporary fix? Or, does it solve a deeper, longer-term problem? Companies like Amazon and Tesla illustrate the power of long-term thinking in tech. In their early years, each of these companies was willing to suffer short-term financial losses in order to build innovative products that solve long-term problems.
2. Think in terms of risk management
When I first arrived at my previous company, one of the first things I noticed about the culture was a focus on risk management. From the top of the organization to the bottom, every employee was trained to recognize, evaluate, and mitigate risk. This framework played a role in nearly every decision made at the company, and with good reason; the 2010 Deepwater Horizon oil disaster was an example of the devastation that can result from poor risk management in the oil industry.
Calling out project risks at the earliest stages of development is an integral part of our role as a product delivery firm. Technical risks, such as platform constraints, SDK limitations, and 3rd-party API dependencies can pose risks to team velocity and overall project schedule.
In addition, product risk management involves testing and validating features early in the product life cycle. By testing designs and prototypes with users directly, we decrease the risk of building products or features that don’t solve real problems.
Identifying market and competitor risks can help flush out some of the most important fundamental questions about a product. If a competitor releases a similar product or feature, ask yourself, how could you mitigate the risk of users abandoning your product?
3. Think in terms of scale
One of the best things about working in the Oil & Gas industry is its massive scale. Because the industry is based on physical assets operating over extremely long time periods, every project must be built to withstand literally billions of cycles. This level of reliability leads to large development, construction, and operational efforts. And of course, large upfront costs.
As a commodities business, the Oil & Gas industry is dominated by major players who operate at extremely low-profit margins. This means that, in order to generate large amounts of profits, projects need to operate at an extremely large scale. This leads Oil & Gas companies to evaluate strategic decisions in terms of scale at early stages of project development.
In tech, the word scalable has become a buzzword in recent years. While the rise of ‘everything-as-a-service’ has solved many problems relating to scalability, thinking in terms of scale remains a pillar of building great products. For example, does your product’s customer service model scale beyond a million users? How about 10 million? Advances in artificial intelligence and natural language processing offer new solutions to problems such as these.
Thinking in terms of scale has enabled companies like Amazon and Uber to develop powerful logistics networks that enable new customer experiences previously considered economically impossible. Order a new laptop and have it delivered to your door by 2pm that day? No problem. Amazon can do it, and by drone! Experiences like these only become viable when the power of large-scale thinking is fully realized.
Having spent time in both the energy and technology sectors, I’ve learned a great deal by reflecting on these two vastly different industries. I challenge you to explore how different companies and industries are connected, even if they may seem unrelated. It will help broaden your perspective and see problems in a different light, leading you to better products in the future.
Danny is a product manager at Connected where he balances engineering, design, and client needs to deliver better products. He has a background in mathematics and engineering. In his spare time, Danny loves reading, spending time with friends, travelling and eating ice cream.
Connected is a product innovation and delivery firm. Our mission is to build better products. We are digital natives and have helped ship some of the most disruptive products of the last decade.
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