Master thesis by: Guro Løwén Heradstveit (Can. Soc. Human Resource Management).

Transcription

1 Master thesis by: Guro Løwén Heradstveit (Can. Soc. Human Resource Management). Research area/problemområde: The impacts of changes on leadership-style and behavior Hvordan endringsprosesser kan påvirke ledere og deres atferd Department of: Organization Supervisor: Majbritt Krogh, institut for afsætningsøkonomi Copenhagen Business School, 2015 Number of estimates: Date:

2 SAMMENDRAG I denne oppgaven har fokuset vært rettet mot de enorme endringene som den norske olje- og gassindustrien gjennomgår, som omfatter lavere aktivitet og store nedskjæringer. I denne sammenheng, har jeg ønsket å undersøke hvordan denne kritiske situasjonen har påvirket ledere, og videre hvordan ledere har evnet å utnytte sine egenskaper som nettopp ledere gjennom prosesser denne krisen har ført til. Det argumenteres i oppgaven for at endringene i oljeindustrien har ført til at ulike barrierer for ledere har blitt revet ned. Dette har ført til et større fokus på at ansatte skal være mer informerte og ha større makt. I tillegg har endringene medbragt et skifte hvor de ansattes fleksibilitet og deltakelse i beslutningstaking har endret seg til en ovenfra-og-ned tilnærming, karakterisert av mindre fleksibilitet for de ansatte. Jeg har med dette studiet ønsket å undersøke graden av usikkerhet i forbindelse med de utfordringene og mulighetene krisesituasjonen i oljeindustrien har medbragt. For å kunne undersøke dette, har jeg valgt å rette fokuset på ett bestemt selskap, nemlig Scanoil. I forbindelse med endringsbehovet i organisasjonen spesielt, og industrien generelt, har selskapet igangsatt et endrings- og effektiviseringsprogram som i denne oppgaven omtales som PACE. Med dette som bakteppe, har målet dermed vært å undersøke hvordan krisesituasjonen i industrien, samt implementeringen av PACE, har påvirket ledernes adferd, og om prosessen har ført til at ledere har måttet endre/tilpasse sine roller som ledere. Ved å gjennomføre en slik analyse av ledere i et olje- og gasselskap i Norge, har det blitt mulig for meg å identifisere forskjeller i måten å håndtere endringsprosesser. Læringen tatt fra denne forskningen har dermed dannet grunnlaget for de endelige konklusjoner som tas, og for de anbefalinger som tilbys for hvordan endringsledelse kan utøves på best mulig måte gjennom en organisatorisk og industriell krisesituasjon. Søkeord: Endringsledelse, Lede endringer, Kommunikasjon, Transformativ lederskap, Situasjons ledelse, Systemisk ledelse, Organisatorisk endring i

3 ACKNOWLEDGEMENTS This thesis symbolizes the end of two years of studies at Copenhagen Business School on MSc in Human Resource Management. Several months of demanding and inspiring work has given rise to a substantial learning process, and I am proud of the final result. I did not believe that writing a thesis within such large proportions would generate so much satisfaction and curiosity during the process. I wish to express a sincere appreciation to my supervisor, Majbritt Krogh, for her support throughout this process. She has provided me with guidance, valuable suggestions, and ideas. Further, I will also like to express an appreciation to Scanoil s cooperativeness, it has been great working with them, and they have provided me with good and valuable information. I hope that the best practices identified in this paper will provide the reader with some ideas and suggestions to support and encourage them during a potential change process. I hope you will enjoy the reading! Copenhagen Business School, ii

4 Table of contents SAMMENDRAG ACKNOWLEDGEMENTS i ii Chapter 1. Introduction Introduction Background and research problem Research question Case company Rational behind the thesis Scope and delimitations Thesis structure 8 Chapter 2. Theoretical framework Introduction Leading change Definition of leadership & leading change Organizational change Lewin s force-field model Kotter s eight steps to change William Bridges, managing the transition Carnall, change management model Resistance to change Leadership- style & Change leadership What characterize good change leadership? Change-oriented behavior Leadership style Change leadership development Summary 26 Chapter 3. METHODOLOGY Introduction Choice of paradigm and research approach Choice of research approach Research Design The research design Collection of data A) Sampling B) Designing an interview guide 33 iii

5 3.2.2 C) Conducting the interviews Transcribing interviews Analysing the data Assessment for qualitative research Methodological reflections 38 CHAPTER 4. ANALYSIS Analysis The Norwegian Petroleum activity Radical changes in the oil-sector Empirical Findings What leaders do during change 59 CHAPTER 5. DISCUSSION Discussion Identifying the main challenges Traditional approaches for change leadership Managing transitions effectively Dealing with organizational cultures Managing organizational politics Balestracci s five essential skills when managing a change process Summary 67 Chapter 6 -CONCLUSION, MANAGERIAL RECOMMENDATIONS & LIMITATIONS Conclusion, managerial recommendations & limitations Conclusion of results Managerial recommendations how to survive as a leader during transformation Limitations 76 REFERENCES 79 Appendix Appendix iv

6 Chapter 1. Introduction Chapter 1. Introduction If you want to create incremental change, focus on behaviour. But if you want a real breakthrough, change the paradigm. S.R. Covey 1.0 Introduction Change is said to be the only constant. Everyone claims to be in so-called change mode. Products and processes are being revised, revamped, and re-engineered to respond to change. New industries are emerging, new types of companies are being created; new partnerships forged; new territories invaded ; new departments established; and newly skilled employees hired. Evidence of rapid and radical changes is everywhere (Beerel, 2009; 4). Then why is it, that human beings normally resist changes? Further, can leaders in an organization undergo a change process without having to adapt to such resistance, and hence shift/adjust their leadership-style and behavior in order to ensure that employees obtain their motivation and engagement even though the only constant is change? After decades characterized by a booming oil industry, with seemingly ever-growing revenues and jobs created, a new reality has presented itself within the golden Norwegian industry. Several factors have influenced the Norwegian economy during the past years since the financial crisis, and that will continue to have futuristic repercussions. In addition to lower activity within the oil industry, the oil price have almost halved since the summer of The steep fall in oil prices have forced oil companies to focus on reducing costs. These issues have impacts on several investment projects, which results in projects being postponed and as a consequence of this employees get laid of. August 2015, Aftenbladet claimed that approximately jobs related to the oil-industry were absent with a likelihood of even more jobs disappearing (aftenbladet.no 1 ). Given that the Norwegian economy is so heavily based upon the oil and energy sector, the laid-off workers experience difficulties in finding 1 1

7 Chapter 1. Introduction new jobs suitable for their previous experience, and therefore the massive layoffs has increased the unemployment rate. In addition to the high amount of workers who have lost their jobs, communities and cities closely associated with the industry are also affected by the downturn, with lower activity within other sectors such as the hotel and restaurant industry, and lower demands has also resulted in red figures for the private transportation industry. Another severe consequence has been a drop in real estate prices, resulting in difficulties for a large group of families servicing their loans. When such a large crisis strikes an entire industry, there is no getting around, companies will suffer, and things might never be the same post-crisis. However, it is important that companies recognize this change process as an opportunity to find better solutions for the future, rather then looking at the crisis as a defeat. Therefore knowing how to lead during change and how to communicate with employees could be crucial for a corporation struck by a crisis, no matter how severe the situation might be. 1.1 Background and research problem The problem area for the thesis derived from an interest in leadership. When exploring the existing literature on leading change and change leadership, I discovered that much of this literature was highly applicable for the on-going crisis within the Norwegian oil- and gas industry. This resulted in a desire to dig deeper into to this crisis within a field highly relevant for future experiences. Much research has been done within the field of change leadership and how to best deal with changes, especially after downsizing activities. Hence, waves of scientific journals are produced to emphasize the importance of good leadership during changes, and how these incidents affects employees trust, motivation, and lack of commitment to the corporation. Media are looking for opportunities to front corporations focusing on horrible workenvironment, employee s dissatisfaction etc. However, knowing how to deal with a crisis and plan for it in advance has become a vital part of organizations strategy plans. 2

8 Chapter 1. Introduction Aitken & Higgs (2012) argues that much of the dysfunctional behavior seen in working environments during change are caused by change leaders in relation to not practicing what they advise and/or personal values that conflicts between managers, employees, suppliers, customers and stakeholders (Ibid.). Thus, change leaders need to recognize the necessity for being consistent during the change process. Due to the recognition of leaders as a source of successful transformation and the growing necessity for leading change, the purpose of this thesis is to contribute to the understanding of leading change. According to John P. Kotter, leadership defines what the future look like, aligns people with that vision, and inspires them to make it happen, despite the obstacles. Successful transformation is 70-90% leadership, and 10-30% management (Kotter, 2012; 26). Hence, the emphasis of this thesis will be to look into the situation that a Norwegian oilcompany is forced to deal with in the wake of the industrial downturn in Changes in the industry has forced management to utilize a change program, and I want to look at how this process has affected leaders in the organization. In order to do this, there are several key questions that have to be raised, and these will be further elaborated in section Research question Based on the problem area just discussed, I have formulated the following research question, which will serve as the basis for this thesis: Have leaders in Scanoil been forced to adjust their leadership-style and behavior as a consequence of the on-going crisis within the Norwegian oil- and gas industry? And further, how has the process of implementing PACE influenced the way leaders lead? In order to answer this research question, I have conducted semi-structured interviews with different leaders in Scanoil, a company I will introduce further later in the thesis. By doing this, I hope to reveal some common traits and, based on those, find answers that might help me towards a conclusion. Additionally, there will also be presented several more tangible research questions, in order to concretize the overarching research question. 3

9 Chapter 1. Introduction Research questions - Have leaders been forced to adjust their work-style when implementing PACE? - What were the critical deliveries for leaders during the change process with regards to elements such as, flexibility and availability? - To which extent is the leader left to develop his/her own leadership style when leading PACE, and how much is influenced by guidance from top management? - Have leaders been forced to adjust their information/communication flow in order to obtain motivation among employees? - Are leaders aware of the degree of severity the changes have on the company? - Have leaders been through training in relation to leading change? And if so, has this training been affective for further work? - Does leaders differ in type of style when leading the change? With regards to which considerations each leader takes. - What leadership behaviours tend to be associated with effective change management among leaders in Scanoil? - What approach to change management is likely most effective in Scanoil? 1.3 Case company The company I have been researching during my thesis wanted to stay anonymous due to pressure from government and media. I will therefore be referring to the company as Scanoil. In addition to this, I have developed a fictive name for their change program in order to keep their anonymity, which will be referred to as PACE. Scanoil is an international energy-corporation with offices in 25 countries. The company has more than 40 years of experience within the oil- and gas production. Their main office is placed in Stavanger, where there are approximately 4569 employees. Scanoil has grown with the Norwegian oil-industry, which started at the end of 1960, and today the company is one of the world s largest suppliers of oil and gas. 4

10 Chapter 1. Introduction Scanoil s Leading Change Program PACE LEAD CHANGE Develop change case Organise and plan Develop solutions Implement and evaluate change COMMUNICATE CHANGE Driving sustainable change through leadership and culture PACE is Scanoil s response to the industry challenges and is developed as an overall efficiency program with several under-projects. One of the main goals with the program is to ensure an efficiency-gain of 25% by each well within the end of PACE was implemented before the actual crisis hit the industry, as a strategy plan for decreasing expenses and increasing efficiency level. The efficiency program is developed to ensure that change processes drive business objectives and performance, and provides practical support on how to drive change and improvement. Through an information booklet provided by Scanoil, the company outlines some strategies for leading a team, called What leaders do during change. In accordance to the topic of the thesis and my research, I have found it both necessary and highly relevant to present these strategies, as they are manifestations of the company s expectation towards their own leaders. Thus, I will use these approaches later in the analysis. Leaders create energy Leaders should work actively to involve employees by giving them responsibilities and challenges during the change process. 5

11 Chapter 1. Introduction Leaders reduce uncertainty Leaders should prioritize critical change activities and reduce uncertainty by communicating what is important with the team and individually. Leaders create presence Leaders should ensure that the individual employee is seen in the process. They are both accessible and highly visible. Leaders pass on information Leaders should use information actively to establish a common knowledge and understanding of why and how the process should be accomplished. They should translate and facilitate corporate information into practical information for the individual. As a basis for my research, I have conducted interviews with 8 leaders in Scanoil from different organizational levels, but within the same business unit. This is illustrated below: Drilling & Well Drilling & Well Mobile Units Exploration Drilling Engineering Drilling & Well- Interventions Vice President HR mananger Drilling & Well Manager HPHT Drilling & Well Manager Mobile Stavanger Leader - International Exploration Leader Operational Support Center - Drilling & Well HR Leader Leader Plan- Drilling Norway 1.4 Rational behind the thesis The main goal of this research paper is to investigate the leadership-role in accordance with changing conditions in the oil- and gas industry, and look at how these changes affect the leadership-role. I have argued that the emergence of the oil-crisis we have witnessed in recent time has brought new challenges as well as possibilities for change leadership. The thesis thus aims to examine how change affects the leadership role. 6

12 Chapter 1. Introduction The objective for choosing this subject is that it is contemporary and highly relevant in society today. The subject of change leadership in relation to the oil crisis is fairly new, although there has been much research upon the subject of change leadership earlier. However, the on-going crisis has had a high-speed development and there has not been much time for proper research upon the topic, therefore I find it quite interesting. I will base my assumptions and claims on existing theories on the topics of change leadership, situational leadership, systemic leadership, transformational leadership and organizational change in particular, together with other related theories. For my analysis I will examine one company within the oil-and gas industry in Norway. By assessing leaders response and efforts to change, I hope to reveal differences in the way leaders have approached these issues in their company, which eventually will be used for my final proposition on; in what way leaders have been forced to adjust their role during changes. 1.5 Scope and delimitations The aim of the thesis is to investigate how leaders cope with changes surrounding their organization by dealing with crisis in the right way, from a corporate point-of-view. The research is delimited to one specific Norwegian oil-company and one single industry, in order to get as much homogenous as possible for comparison of leaders, aiming to make the research more reliable. The reasoning for choosing this specific industry was that the oil- and gas industry in Norway is enormous, and Norwegians build much of their economy upon this industry. Therefore, a crisis like this one will have consequences not only for the entire industry; it inflicts enormous consequences on several other industries, and on the entire Norwegian society as well. In addition, the Norwegian oil- and gas industry is quite distinctive compared to other key industries, characterized by a high degree of regulation and power, closely linked to the governments, but with a somewhat low degree of transparency, which in sum opens up for some types of issues other industries might not experience. Further, the industry can also be said to be under a high degree of scrutiny, both from the public, by governments and by other stakeholders. This tends to make companies work to protect their image and presume a positive corporate reputation, and avoid unfortunate activities such as downsizing. 7

13 Chapter 1. Introduction Hence, I understand that by narrowing my research down to one industry in one country will make it difficult to generalize the findings to other industries in other parts of the world. Nonetheless, I hope my research will contribute to a deeper understanding towards the challenges and possibilities concerned with leading change, and open up for further investigation and emphasis on the subject. 1.6 Thesis structure Chapter 1 is designed to establish a broad understanding of the research field. The thesis thus starts by introducing the overarched topic and research question, which lead to the subordinate research questions, and functions as the basis from which the structural framework is built. This section will also clarify the background and justification of the topic leading change. Chapter 2 presents the theoretical framework selected in relation to my topic. The chapter emphasizes to clarify the leadership role, as well as elaborating on existing literature on change leadership and leading change, while justifying my research. The chapter is divided into three different parts. First, I will start by looking into the phenomenon leading change, and what this term actually means. Further, I will look into the evolution of organizational change, in order to get a better understanding of how organizational changes affects employees, and consequently distresses leadership. Lastly, I will clarify and assess change leadership as well as different forms of leadership, building the basis for my discussion. Chapter 3 introduces the methodology chosen for the thesis. Further, I will also present the methodological design, hence how the collection of samples and data was collected and further processed. Additionally, I will critically justify the reasoning and theory used for my analysis and case study approach. Chapter 4 consists of the analysis and empirical findings. First I will present a description of the oil-industry in Norway. Thereafter I will start by presenting the empirical findings depicted from the discourse analysis. The aim of the analysis is to highlight leaders role during the crisis situation, and how this process has affected their role as leaders. 8

14 Chapter 1. Introduction Chapter 5 will comprehend a discussion of the analysis and key findings in relation to the literature review. First, I will present the main challenges leaders have been struggling with during the crisis. Second, there will be a discussion of the companies effort in accordance to the existing theory on change leadership by Carnall (1990) & Balestracci (2002). Chapter 6 concludes my main findings before answering the research question by presenting some further recommendations on how leaders can survive and benefit from organizational changes, based on my main findings. Lastly, I will emphasize the limitations I have identified during my research, and thereby suggest futuristic research on the topic. 9

15 Chapter 2. Theoretical framework Chapter 2. Theoretical framework 2.0 Introduction The theory presented in this chapter will be the basis for the analysis, which will finally help me answering the research question. The main theory of this thesis is linked to leading change, organizational change models and change leadership. However, I have also used other sub-theories to increase my understanding of the industry I am investigating and to get a more holistic picture of the phenomena. Given that the research question alludes in how leaders in Scanoil are influenced by the need for change and a seemingly critical oil-crisis, I have chosen to call attention to theories that circle around leading change as a phenomenon and changes in general, in addition to theories regarding leadership. One of the reasons for this choice is that I will gather a large amount of information about how leaders perceive the challenges and surrounding issues in the industry, in addition to the general organizational situation they are situated within through the in-depth interviews. This leads to a need to obtain and use more general information about the other key topic of the research, namely the concept and characteristics of change. In order to know what leading change is, what the need for it implies, where it originates, and how it can be utilized in a healthy and positive way for organizations, I will need to review theories about the topic before more information can be employed. In this manner I will be capable of understanding the backdrop for the situational need leaders in Scanoil are facing, and how they can exploit these changes in the best way possible. The knowledge is of great importance, when to answer the overarching research question of whether leaders in Scanoil are forced to change their leadership style, and if the implementation of PACE have changed the way leaders lead. 10

16 Chapter 2. Theoretical framework 2.1 Leading change Leadership is about change. It is about taking people from where they are now to where they need to be. The best way to get people to venture into unknown terrain is to make it desirable by taking them there in their imagination FIRST. Noel M. Tichy, The Leadership Engine Definition of leadership & leading change In order to understand the tasks and challenges leaders are facing as a consequence of the turbulence within the oil-industry, it is essential to start by looking into the evolution and increased importance of leading change and change leadership. First I will start by introducing the concept of leadership and leading change, before clarifying the concept of change. Gary Yukl (2006) defines leadership as the process of influencing others to understand and agree about what needs to be done and how to do it, and the process of facilitating individual and collective efforts to accomplish shared objectives. However, I would like to refer to Paglis & Green (2002) definition of leadership, since it specifically pertains to managers driving change and continuous improvement at work: Leadership is the process of diagnosing where the work group is now and where it needs to be in the future, and formulating a strategy for getting there. Leadership also involves implementing change through developing a base of influence with followers, motivating them to commit to and work hard in pursuit of change goals, and working with them to overcome obstacles to change. In order to successfully initiate a change process one is dependent on good leadership. Paglis & Green (2002) explains this by illustrating the importance of leaders driving change, and working closely with employees in order to motivate them. I find this definition highly important in relation to the oil crisis, since employee s reactions to the changes is of a particular interest, when looking at how leaders adjust under crisis situation. In this manner, it is extremely important for leaders to identify a driving change as well as to follow their employees, and make them commit to their jobs during this crisis situation. In contrast, change may vary in degree of severity, where one can distinguish between radical and incremental changes. Radical changes are often characterized as difficult to apprehend, 11

17 Chapter 2. Theoretical framework and resistance towards the change is often stronger. In order to create willingness to relinquish old styles of working in favour of new ones, radical changes requires a certain level of acceptance (Reardon 1998; Baesu & Bejinaru, 2013). Incremental changes on the other hand, are easier to accept and implement, as these are applied more gradually and informally. Thus, when people get used to these kinds of changes they become more like a routine. In regards to the backdrop of this thesis, which is linked to the difficulties leaders in the Norwegian oil- and gas industry are facing, it is natural to consider the changes needed as radical, rather than incremental, at least in most cases The basis for leading change Leading change occurs when organizations anticipate, respond to, or adapt to challenges and opportunities in their internal or external environment (Hickman, 2010; 25-26). In this manner, leading change is to bring about a difference in form, quality, or state of the organization, so that the organization survives and achieves its mission and goals (Ibid.) Kotter (2012) argued that the concept of leading change was to interpret the necessity for transformation and change, and to accept the fact that organisations can function better if leaders defines a clear strategy linked to the future of the company, and if employees are aligned with that strategy and inspired to make that necessary change happen (Kotter, 2012; 26). Over the last decades there has been a significant rise in the focus on leading change and change leadership among companies. Increased globalization, changing social expectations and huge technological developments among other things, which may surface the need for changes and renewal, have largely contributed to this trend in organizations. Gary Yukl (2013) argues that leading change in an organization is one of the most important and difficult responsibilities for managers and administrators. It involves guiding, encouraging, and facilitating the collective efforts of members to adapt and survive in an uncertain and sometimes hostile environment (Yukl, 2013; 86) Many theorist connect leadership to change as well. Burns (1978) argues that leadership manifest most in the change context, Linsky & Heifetz (2002) introduces leadership as facilitating adaptive change, and Yukl (2002) argue that change is the essence of leadership and everything else is secondary (Andrews, McConnell & Wescott, 2010; 13). Additionally, there is a broad specter of theories 12

18 Chapter 2. Theoretical framework concerning change leadership, including theories on leadership behavior, transformational-, situational-and systemic leadership. Therefore, in order to identify which theories that can be linked to the theme of this thesis, it is necessary to develop a comprehensive understanding of the importance of leadership in a change process. Today, companies that fail to meet society s expectations will mostly be criticized or receive negative publicity from environmental organization, general public, governments, as well as the media, which consequently increases the public focus on these companies, especially during challenging times. Hence, the last year has been difficult for most organizations operating within the oil industry, companies struggling to obtain their position, and at the same time save costs. These difficulties have affected their corporate image, and forced many companies to face the fact that there is a need for change. With more information available, several corporate scandals have been revealed publicly, and media is exaggerating the industry s future, which has provoked companies to increase their focus on leadership. Jody Spiro (2009) argues that change can be a dynamic and positive force for creating new strategies and putting them into action, stimulating creativity, diversity, learning and growth. Thus, leaders need to convince their employees that changes are not necessarily all negative, it can also stimulate learning and growth, and furthermore establish a sustainable future. Nonetheless, the changes described in this thesis are about a deliberate disruption of the status quo, hence, it will be harder for leaders to actually encourage employees to accept and agree with the changes. 2.2 Organizational change Organizations are influenced by a multitude of factors, which are affected by both the internal and the external environment. Hence, companies are forced to deal with changes every day, however, these changes differs in characterization. Baesu & Bejinaru (2013) describes changes as to alter the present shape/estate in order to become a better one. Change management is defined as the coordination of a structured period of transition from situation A to situation B in order to achieve lasting change within an organization (Barktus, 1997; Baesu & Bejinaru, 2013). In general, individuals focus more on what they have to give up when change occurs and not on what they could gain. Theorists argue that resistance is 13

19 Chapter 2. Theoretical framework the norm when changing an organization, however, this is rather paradoxical as any change is completed in order to ensure the company s survival. Generally we do not like changes, we resist them if we can, change frightens and inconveniences us (Beerel, 2009; 4). However, adapting to changes requires transformation. Transformative change results from learning, since we live in a world were the only constant is change, the only way to survive is to strengthen our adaptive capacity (Ibid.). Organizational change refers to a set of actions that come to amend previous methods, procedures and organizational behaviors through assigning some directions. Typically theories suggest distinct phases in the change process, stages in the reaction of individuals, or effects of repeated changes on people. In this section there will be presented different change processes, which I consider essential in order to be able to answer the research question. The reason I find this important, is that the models for the different change processes can help understand and identify where Scanoil is in the process of change, and which kind of challenges the different leaders in the company may be facing Lewin s force-field model Lewin s force-field model was one of the earliest change models developed. He proposed that the change process could be divided into three phases: unfreezing, changing, and refreezing (Yukl, 2013; 90). This model is relevant for my research in order to identify the need for an actual change within the organization, and thus to understand the process of actually changing an organization, and how people tend to act during transitions. In the unfreezing phase, people come to realize that the old ways of doing things are no longer adequate. This recognition may occur as a result of an obvious crisis, or from an effort to describe threats or opportunities that were not evident to most people in the organization. In the changing phase however, people look for new ways of doing things and select a promising approach. A critical part during this phase is the training session, where one is supposed to develop new ways of thinking and handling. In the refreezing process, the new approach is implemented and it becomes established (Ibid.). 14

20 Chapter 2. Theoretical framework Lewin argues that two types of action may attain changes. One approach is to increase the driving forces towards change (increase incentives and use position power to force change). The other approach is to reduce restraining forces that create resistance to change (reduce fear of failure or economic loss, co-opt, or remove opponents) (Ibid). I will get further back to this model in the analysis, where I will look at Scanoil in relation to Lewin s three-phased force field model, and their approach towards unfreezing, changing and refreezing. The model has potential of helping us understand attitudes towards the need for change, both from leaders and their employees, in the light of Lewin s unfreezing step. Further, the model can also be applied to investigate how the company has dealt with the actual process of changing, be it through training, preparations or adaptions Kotter s eight steps to change Kotter can be looked at as a father figure when it comes to leading change. Therefore I find it highly relevant for my thesis to mention his eight-step model developed to transform an organization. His model derives from analysis completed within 100 different organizations going through change. Where Lewin s model categorizes the stages of change into three, quite general phases, Kotter presents eight-steps where he addresses some of the power issues in making change happen. He highlights the importance of a felt need for change in the organization, and emphasizes the need to communicate the vision and keep communication levels extremely high throughout the process (Cameron & Green, 2012; 126). Even though the model presented is fairly general, it can work as a framework for understanding how a change process works in an organization, and additionally how leaders can respond and adjust to these changes. Such a framework will also serve as a good backdrop for my research, as I evaluate the change process that Scanoil is undergoing and how it affects their leaders, given that Kotter both explains the basic steps of a change process, as well as the normative need of good and strong communication throughout the process. Kotter has been criticized for not really emphasizing the need for managers to follow through with as much energy on the last steps in his model. The model peaks early, using powerful concepts such as urgency, power, and vision. However, after Step 5, it seems that he emphasizes that the process that can be managed by others, lower down the hierarchy (Cameron & Green, 2012; 127). Even though Kotter is seen as a father figure within the field, 15

21 Chapter 2. Theoretical framework I understand and support the criticism that has been raised. Leaders have responsibilities and certain unique roles within their units, and it appears as quite necessary that they remain visible, open and present during the whole change process. 1. Establish a sense of urgency; Discussing today s competitive realities, looking at potential future scenarios. Increasing the felt-need for change. 2. Form a powerful guiding coalition; Assembling a powerful group of people who can work well together 3. Create a vision; Building a vision to guide the change effort together with strategies for achieving this. 4. Communicate the vision; Kotter emphasizes the need to communicate at least 10 times the amount you expect to communicate. The vision and accompanying strategies and new behaviors need to be communicated in a variety of different ways. The guiding coalition should be the first to role model new behaviors. 5. Empower others to act on the vision; This step includes getting rid of obstacles to change such as unhelpful structures or systems. Allow people to experiment. 6. Plan for and create short-term wins; Look for and advertise short-term visible improvements. Plan these in and reward people publicity for improvements. 7. Consolidate improvements and produce still more change; Promote and reward those able to promote and work towards the vision. Energize the process of change with new projects, resources, and change agents. 8. Institutionalize new approaches; Ensure that everyone understands that the new behaviors lead to corporate success. Kotter (2012); Cameron & Green (2012) William Bridges, managing the transition Bridges (1991) developed managing the transition to make a distinction between planned change and transition. Bridges model has some similarities with Lewin s force field model, in their explanation of a change process. Bridges argues that transitions are highly complex, and therefore requires a deeper understanding of what goes on during transition and how can we manage the process more effectively (Cameron & Green, 2012; 134). Transition is about letting go of the past and taking up new behaviors or ways of thinking. Transition consists of three phases: Ending Neutral zone New beginning Bridges argues that before a corporation can start something new, one has to end what used to be. The corporation has to mark the endings for everyone to understand. In the neutral 16

22 Chapter 2. Theoretical framework zone, people feel disoriented, motivation falls and anxiety rises. The manager s job is to ensure that people recognize the neutral zone and treats it as part of the process (Cameron & Green, 2012; 136). Bridges argues that new beginnings need to be developed carefully, and one should encourage, support and reinforce in order for the change to be successful (Ibid). If leaders are to motivate and engage employees during times of transition, like leaders in Scanoil are, it is highly important for them to actually understand the degree of severity, as well as what the transition actually means. Thereby, it is essential for leaders to understand the transition in order to actually encourage and reinforce the company Carnall, change management model Lastly, I would like to highlight Carnall s model for effective change management, as this model can be utilized when looking at how the change process has influenced leaders in Scanoil, in addition to comparing leaders utilization of effective change management, similar to Carnall s idea. Carnall (1990) argues that the effective management of change depends on the level of management skills in the following areas: - Managing transitions effectively - Dealing with organizational cultures - Managing organizational politics In this manner, the manager will be able to utilize these characteristics and thereby help people to learn as they change and create a work-environment of openness and risk-taking. On the other hand, the manager can also focus on the organization s current culture, and develop a more adaptable culture. Thereby the manager/leader has the possibility to develop skills within utilizing and recognizing various political tactics such as building coalitions, using outside experts and controlling (Cameron & Green, 2012; 139). Carnall (2002) argues that only by synthesizing the management of transition, dealing with organizational cultures and handling organizational politics can we create an environment, which fosters creativity, risk taking, self-esteem and performance (Ibid.) Resistance to change Regardless of the extensive literature providing guidance to change, and how to best initiate and manage change, there is still difficulties when analyzing how changes actually appears 17

23 Chapter 2. Theoretical framework and how reactions towards these changes differs from person to person. A major common difficulty when working with changing conditions is the challenge of dealing with resistance. Generally, theories argue that employees react differently in relation to the changes. However, it is essential to acknowledge that leaders will have the same characteristics as any other employee. Leaders are also people, and reactions will therefore differ among leaders as well during transformation. Nonetheless, their reactions are harder to manage since they do not have the possibility to react publicly, or in meetings like employees might do. Further, leadership is about being a figurehead for the company. A leader needs to demonstrate that he or she sees the need for change, and that changes are a natural part of the game. When dealing with transformations, leaders are the ones that are supposed to encourage, follow-up and lead their employees during the changes, regardless of what they agree with. Higgs & Aitken (2012) outlines a framework for key factors determining reactions to changes. Mainly, they express concern for the feeling of ambiguity that might occur during changes, which can trigger negative reactions. Additionally, when information is withheld or lacking before changing an organization, similar reactions can be triggered. Furthermore, people are creatures of habits, and therefore they do not like when changes threaten to modify already established patterns. Lastly, it is negative when the change threatens jobs, power and status in an organization (p. 28). Based on the figure above, many organizations establish a strategy for how to manage employees during change in relation to how they may act. Typically people experience shock, anger and resistance in the beginning of the change initiative. However, when the changes are 18

24 Chapter 2. Theoretical framework communicated well, and followers experiences a sense of being a part of the game they start accepting the changes, and looking forward. In order to develop strategies for handling different forms of reactions, it is helpful to consider how people in an organization experience changes, cf. figure 2.4. These forms of reactions will be taken under consideration during my analysis, nonetheless, it will be the reaction described as in response that is relevant for leaders and employees in Scanoil. In response, is about resistance where we see ourselves as victimized. Typically this concerns top-down restructuring. Further, leaders have to consider that their behavior will affect how employees react to changes. The likeliness of having employees who commit to support changes increase when leaders are trusted, and convincing in their effort to explain why the change is necessary and effective. However, resistance to change is still normal within organizations, and it may occur for several reasons that are not mutually exclusive (Connor, 1995; Fedor, Caldwell & Herold, 2006; Yukl, 2013; 91). Hence, resistance to changes can occur when leaders who propose it are disrupted, and this distrust can have a spillover-effect on other sources of resistance. Lack of trust may encourage a leader to be reserved in regards of the real reasons for change or some of the risks, and thereby further increasing suspicion or resistance (Ibid.). 2.3 Leadership- style & Change leadership Change processes are complex and it requires leaders that have the ability to change their own and others behavior. Leaders need to express a deeper understanding for their peers and connect with their motivational drivers, which engage heart as well, as minds (Aitken & Higgs, 2012; 57). Leadership is compound and they differ much in how they act and behave as leaders, and therefore it is natural that some leaders are better as change leaders than others. Theories argues that generally people are more likely to accept and connect with changes if leaders provide actions that are authentic with their work (where actions match words) and where messages communicated, resonates with their vision, purpose and values (Ibid.). Aitken & Higgs (2012) argues that much of the dysfunctional behavior seen in working environments during change are caused by change leaders in relation to not practicing what they advise and/or personal values that conflicts between managers, employees, suppliers, customers and stakeholders (Ibid.). Thus, change leaders need to recognize the necessity for being consistent during the change process. 19

25 Chapter 2. Theoretical framework Caldwell (2002) identified leaders as change agents. A change agent is the facilitator of the change. He/she helps the sponsor and the implementers stay aligned with each other. The change agent acts as data gatherer, educator, advisor, meeting facilitator and coach (O Neill s, 2002; Cameron & Green, 2012; 202). He argued that since many change initiatives derives as a top-down approach, leaders needs to identify themselves as change agents who can represent the voices from below. Thereby, change agents have two alternatives, either by aligning with the current culture, or by deliberating a new behavior in order to succeed with the change process. During the process a key aspect for each individual is to establish some sort of individual freedom. Scheein argues that a key task is to balance the anxiety people feel about surviving the change with the paralyzing effect of the anxiety felt about being able to learn new ways of doing things (Ibid; 216.) What characterize good change leadership? Increasing globalization, rapid technological development, growing knowledge and shifting trends makes change leadership a primary task. The leadership role has been through a largescale development, from its hierarchical structure with typically top-down control, to a more flatter and flexible leadership role. The emphasis is now more directed to collaboration, communication, and openness. Graetz (2000) argues that change leadership involves two roles; 1. Instrumental 2. Charismatic Charismatic leadership is personalized leadership and is underpinned by strong interpersonal skills (Graetz, 2000). Those characteristics are necessary in order to empower and energize followers. Instrumental leadership on the other hand, involves managing environments to create conditions that motivate desired behavior (Ibid.). Caldwell (2003) argues that as new flatter and more dynamic organizations have emerged, managers and functional specialists are now expected to embrace the change-oriented attributes or behaviors that will allow them to cope with uncertainty and become leaders, innovators and risk takers. I will come further back to these types of role later in the analysis. 20

26 Chapter 2. Theoretical framework Change-oriented behavior Earlier theory on leadership paid little attention to behavior in relation to encouraging and facilitating for change. However, recent research diverges between different meta-categories on effective leadership behavior. When researching Scanoil s leaders behavior during the crisis situation, it is natural to take these categories into consideration. Yukl (2013) describes three different meta-categories; Task-oriented behavior, is primarily concerned with accomplishing the task in an efficient and reliable way. Relations-oriented behavior, is primarily concerned with increasing mutual trust, cooperation, job satisfaction, and identification with the team or organization. Change-oriented behavior, is primarily concerned with understanding the environment, finding innovative ways to adapt to it, and implementing major changes in strategies, products, or processes (Yukl, 2013; 65). I will elaborate relation-oriented and change-oriented behavior furthermore, later in the thesis Leadership style Roughly spoken, there are two explanations for why change efforts often fail. First, employees often get ignored in the process, second, inadequate leadership style assessed by change agents (Suada & Dzevad, 2014). Leadership behavior that is supportive and facilitative has a stronger link to success. Beerel (2009) argues that leadership is influenced by time. In times of rapid globalization and change we want leaders who can reconcile the old with the new. Additionally cultures diverge in how they envision leadership. Some cultures values leaders that are patriarchal and authoritarian, while others values leaders that are coaches or facilitators (Ibid; 63). In order to fully understand the process of leading change, its important to acknowledge that there are differences in leadership-style, and thus in their way of assessing change processes. In this manner the emphasis is to identify whether leaders have to change their behavior during crisis situations. In order to fully understand this phenomenon, we shall further approach the relation between different styles of leadership linked to organizational change. 21

27 Chapter 2. Theoretical framework Transformational leadership Transformational leadership is one of the most prevalent forms of leadership. Within the overall theory of leadership, transformational leadership is considered particularly relevant in the context of organizational change (Suada & Dzevad, 2014), which makes it highly relevant when researching if and how leaders in Scanoil are affected by the change process. Transformational leaders stimulate and inspire followers to both achieve extraordinary outcomes and, in the process, develop their own leadership capacity (Bass, 2006). Transformational leaders empower their followers by aligning the entire organization s objectives and goals (Ibid.). Nonetheless, transformational leaders are pursuing to satisfy their followers higher needs. Thereby they wish to engage and develop a team with a higher moral ground (Burns, 1979; Beerel, 2009; 11). Transformational leadership involves inspiring followers to commit to a shared vision and goals for an organization or unit, challenging them to be innovative problem solvers, and developing followers leadership capacity via coaching, mentoring, and provision of both challenge and support (Ibid.). Bass (2006) argues that transformational leadership can be characterized by four critical components of transformational leadership. These will be assessed furthermore in the analysis, when looking at how leaders in Scanoil have utilized these characteristics when leading change. - Idealized Influence; this category is characterized by the leaders as an admired, respected and trustworthy person. Followers will therefore seek to identify with their leaders. - Inspirational Motivation, argues that leaders behave in ways that motivate and inspire those around them by providing meaning and challenge to their followers work. - Intellectual Stimulation, leaders stimulate their followers efforts to be innovative and creative by questioning assumptions, reframing problems, and approaching old situations in new ways. 22

28 Chapter 2. Theoretical framework - Individualized consideration, leaders pay special attention to each individual follower s needs for achievement and growth by acting as a coach or mentor. Individualized consideration is practiced when new learning opportunities are created along with a supportive climate. Beerel (2009) differs from some of the key components Bass (2006) describes with transformational leadership. Beerel argues that leaders do not necessarily have to do all the work. Thereby, she argues that the leader cannot solve the entire administration, however, they can work as an inspiration and motivation. Conversely, it is highly dangerous to idealize or idolize leaders. Therefore Beerel (2009) points at the importance of not creating a vision alone. Visions need to be co-created in light of new realities (Beerel, 2009; 13). Nevertheless, critics argue that transformational leadership can be elitist and antidemocratic. Particularly there has been concern around the potential for abuse of power. Consequently transformational leaders motivate their followers by appealing to strong emotions, however, they do not consider how this will affect followers moral values. Further, transformational leaders are criticized for not balancing countervailing interests, and at the same time avoid dictatorship and oppression of a minority by a majority (Ibid.) Situational leadership The description of situational leadership is also applicable in regards of leading change, as top-tier leaders can encourage subordinate leaders to develop different leadership styles to manage diverse situations (Paterson, 2013). The core competencies of situational leaders are the ability to identify the performance, competence and commitment of others, and to be flexible (Ibid.). Situational leadership can be crucial during a change process, since situational leaders have the ability to adapt to new situations that demands new approaches towards how to lead each individual, with regards to communication, openness, flexibility and authority. Higgs & Aitken (2012) proposes in their book Developing Change Leaders that we initiate different leadership styles depending on the situational impact. These leadership-styles are interesting when looking at the possibility of leaders in Scanoil adjusting their leadership- 23

29 Chapter 2. Theoretical framework behavior due to changes in the organization. These leadership-styles will be assessed furthermore in the analysis. - Coercive/commanding, this type of leadership style work best in a crisis, to kick-start a turnaround, or with problematic employees. - Authoritative/Visionary, works best when changes requires a new vision, or when a clear direction is needed - Affiliate, is effective when healing rifts in a team or to motivate people during stressful circumstances - Democratic, to build buy-in or consensus, or to get input from valuable employees - Pacesetting, to get quick results from a highly motivated and competent team (High & Aitken, 2012; 121) Systemic leadership Systemic leaders seek to mobilize people to handle challenging issues that arise during the change process, and enhance their adaptive capacity (Beerel, 2009; 6). The general idea behind this approach is that leaders wish to make their employees see the need for why they must act as they do. Thereby they stimulate employee s self-motivation based on the action required. I have chosen to describe this leadership-style more broadly, due to the recognition that this leadership-style is particularly relevant for leaders in Scanoil, when trying to make PACE something that employees see the need for, and additionally act by the new goals. As Scanoil has been a company that has been struck harder by the crisis in Norway, there is a distinct degree of ambiguity and resistance among the employees, especially due to factors such as high rates of layoffs and turbulence. Further, this adds more ingredients into the bowl of resistance towards change that exists permanently and also in non-crisis situations, which makes it even harder for leaders to mobilize and demonstrate why changes are necessary. This leadership approach is based on the recognition that people generally resists changes. Therefore leaders need to reprioritize employees values, change their perspective or world view, and establish new behaviors or form a new relationship (Ibid.). Equally, people who resist changes tend to demonstrate their resistance by acting out. They deny, avoid, get angry, find someone else to blame, are preoccupied with other issues, lose motivation, rebel, 24

30 Chapter 2. Theoretical framework disappear, or sabotage change efforts (Ibid). At the same time, others might prefer to be told what to do during change processes. This is due to the fact that they do not have the same personal engagement to the process, and as a consequence to this they can blame someone else for their actions. Thereby, systemic leadership is build up to deal with these psychological and emotional issues, and at the same time deal with strategic, technical, procedural and structural issues around the change process (Ibid). Nonetheless, for a systemic leader to succeed, one has to be sharp, energetic, persevere. Finally, in order to deal with resistance and ambivalence towards change, self-confidence is also required. According to Pinnow (2011), systemic leadership means individual leadership, having a flexible, personal style and being able to adapt that style to the organization and the people of the current leadership situation rather than working with schematic standard tools (Pinnow, 2011; 119). Throughout a change process, systemic leaders should aim their focus towards what happens between two actors, instead of focusing on just one parameter. From his work with leaders, Pinnow (2011) emphasizes structures and forms of communication within the organization, as well as the readiness and ability to communicate at the individual level, and says that communication is interaction, it is listening and speaking and comprehending in exactly this order (Ibid.). Lastly, Ghosal (2004) argues that there has been a shift in how the leadership-role is exercised, and that the maintenance and building of relationships are the key elements that leaders need to comprehend and master (Pinnow, 2011; 123). Further, he portrays a reality where leaders have to spend more and more time dedicated to customers, products, and markets. Consequently, less time is left for being visible and present, leading and training employees, and giving feedback, and this can contribute to complicate the conditions for leaders in times of change. These issues are interesting when looking at how leaders in Scanoil have been able to utilize their resources when leading PACE. 25

31 Chapter 2. Theoretical framework Change leadership development Change leadership is variously and depends much on the situation. In order to develop conscious and effective leaders during change, it demands developing flexibility in leadership-style in order to match the current business conditions and culture. Baesu & Bejinaru (2013) describes in their article Leadership Approaches Regarding the Organizational Change, the importance of depersonalization. Hence, they argue that in order to overcome immediate resistance to change, one has to depersonalize the change. Depersonalization is described as decreasing the emotional reactivity to the situation, which allows for, and even encourages, change. Conversely, if you remove the emotional side of the change process, the firm and employees are more adaptable to move into the change mode. Thus, in order to respond appropriately to the changes there s a need for five essential skills: 1. Self-awareness 2. Emotional maturity 3. Self-motivation 4. The ability to show empathy 5. The ability to develop and maintain positive relationships (Balestracci, 2003; Baesu & Bejinaru, 2013). These skills will be further processes in the analysis, when looking at how leaders in Scanoil have managed to assess these skills when leading change. 2.5 Summary Rooted in my research question, I chose to divide the theoretical framework into three overarching sections, namely leading change, organizational change and leadership-styles and change-leadership. The purpose of doing this was first of all to portray an understanding of the theories linked to these sections. Additionally, this setup helped me to differentiate between different theories linked to various aspects of the thesis, as well as it simultaneously made it possible to create a form of informal categorization that consequently will make it possible to analyze and discuss my findings. By examining theories linked to widespread themes such as leadership and change, it is difficult not to get lost in seemingly large jungle of different approaches to different issues. Thus, by dividing the framework into three very specific sections, I feel that both the reader and I have a more concrete and specific theoretical backdrop before setting out into the following chapters. 26

32 Chapter 3. METHODOLOGY Chapter 3. METHODOLOGY 3.0 Introduction The purpose of the following chapter is to outline the methodological reflections and research design selected for this research. The objective of the chapter is to critically reflect upon the methodology chosen, and attempt to justify it in the light of other alternatives. Throughout this section, I will offer a presentation and discussion of the method I have employed in this research. The chapter is organized into three sections, I will begin by exploring the scientific direction I have chosen to examine in my research. Further, I will offer an elaboration of the research process and research design, where the data collection and the analysis of the data will be embedded. Conclusively, I will also offer an evaluation of limitations and assessment of research criteria, which alludes in reliability and validity, in order to provide a more profound insight into my approach towards the conduction of the study. 3.1 Choice of paradigm and research approach Kuhn (1962) defines paradigms as an entire constellation of beliefs, values, techniques, and so on, shared by the members of a given community (Dalby & Holloway, 2010; 101). Thus, the research paradigm can define how we can attain and assess information. Even though there are several different paradigms, I will only call attention to positivist and interpretive paradigms, which underlie qualitative research designs. Positivistic approach Positivism is an approach to science which is rooted in the ontological belief that an objective reality exists. The aim of research which is grounded in a positivist epistemology is to uncover universal laws and give an objective picture of the world (Dalby & Holloway, 2010; 101). Dalby & Holloway (2010) argues that the aim of research which is grounded in a positivist epistemology is to uncover universal laws and give an objective picture of the world. 27

33 Chapter 3. METHODOLOGY Interpretive approach The interpretive approach on the other hand, expresses an ontological belief in the existence of multiple realities and truths which are open to change because the social world, not having a separate existence from the individual, is socially constructed (Dalby & Holloway, 2010; 102). The interpretive approach tries to undercover meaning of how people understand their own experiences, behaviors and communication. With regards to my research question, I find the interpretive paradigm more suitable for my research, which aims at uncovering the challenges leaders are facing in an already critical situation. Human behavior can, as a phenomenon, be characterized as driven by beliefs, feelings, mindsets, rationales and actions. In times of changes, it is therefore almost impossible to predict employees actions, as they are driven by such guidelines, more than any rational attributes or general laws. In accordance to the interpretive approach, the researchers prioritize understanding over scientific explanation (Dalby & Holloway, 2010; 102). In order to understand the rationales and reasoning of the people involved in the case; i.e. leaders and the company overall, one has to get an understanding of how leaders are affected and influenced during a change process, and how these consequences affect them as leaders. The aim of the thesis, is as mentioned above to discover to which degree the implementation of PACE is influencing the leaders is Scanoil, and whether their style of leadership have been forced to change as a consequence of this. As I will dive into this by doing in-depth interviews with 8 leaders, I seek to discover how leaders review this particular issue, their own type of leadership, and eventually how they reflect upon the topic I am investigating. By doing this, I am not seeking to, or in the position to, offer a universal law rooted in a certain reality or objective truth. In addition, the thesis is heavily based upon a specific downturn in the industry, a factor that has a tremendous impact on both the leaders and how they review their role. Such impacts are influencing the situation and field this research is investigating, and since this is emphasized in the research, it will be more suitable to characterize the approach as more interpretive than positivistic Choice of research approach We distinguish between two general approaches to reasoning, inductive and deductive reasoning, which may result in the acquisition of new knowledge. 28

34 Chapter 3. METHODOLOGY Inductive reasoning The researcher collects all the relevant facts and then examines them to see what theory is suggested by this set of all the relevant facts. The theory thus emerges from the data (Wengraf, 2001; 2). Deductive reasoning This model declares that there is no thing as all the relevant facts, there are only hypothesis-relevant facts, and that research must always start with a body of prior theory, if only to decide which set of collectable facts should be collected or generated (Ibid.). Research following the deductive approach scans theory, derives logical conclusions based on this theory and present these conclusions in the form of hypotheses and propositions, which are empirically tested and presented through general conclusions based on corroboration or falsification of the hypotheses and propositions generated (Hyde, 2000). Since the deductive research is more suitable for testing existing theories, I find this highly relevant for my research. It is argued that both qualitative and quantitative researchers practice deduction and induction in their research, but do not always recognize these processes formally in their research (Ibid.). The aim of my research is to test already established theories, and see if the theory applies to specific instances in my research, including leaders reaction to changes in the organization, and how they adapt to these changes. However, the presented theories seems unable to cover all the problems leaders in Scanoil faces today, and therefore I believe that it needs to be subject to alternations and improvements. Hence, an inductive approach is used as a supplement throughout the thesis. Inductive reasoning is a theory building process, starting with observation of specific instances, and seeking to establish generalizations about the phenomenon under investigation (Hyde, 2000). Following the lines of inductive reasoning, the interviewees can hereby help improve change leadership theory by adding theory in a more practical manner, by studying leaders in a company during crisis. 3.2 Research Design Research design is a plan for collecting and analysing evidence that will make it possible for the investigator to answer whatever questions he or she has posed. The design of an 29

35 Chapter 3. METHODOLOGY investigation touches almost all aspects of the research, from the minute details of data collection to the selection of the techniques of data analysis (Flick, 2007). Mehmetoglu (2004; 50) argues that the research process consists of three phases; 1. Structuring the research design 2. Collecting the data 3. Analysing the data The research design The research design is dedicated to transform the research question into a pilot project. The first phase describes how the researcher chooses to collect relevant data as a supplement to the analytical procedure that will be applied later, in order to identify some conclusions based on the information identified. This phase will last until the researcher has found a suitable research question (Ibid) a. Type of method Type of methods is mainly identified as procedures and techniques, described in order to answer scientific questions and problems. We distinguish between two types of research methods: qualitative and quantitative. Quantitative research is primarily concerned with a) cultivating relationships between cause and effect, b) operationalize theoretical relationships, c) creating research design that allows generalization of results and formulate general laws based on them (Mehmetoglu, 2004; 17). Qualitative research on the other hand, seeks to identify underlying concepts and the relationship between them and might include transcripts of in-depth interviews, observations or documents (Hyde, 2000). The topic under research in this thesis advocates the use of qualitative data. Qualitative research emphasizes depth rather than breadth, thus the research is more personalized and open for interpretations. Additionally, qualitative research bases their acquisition of data on a smaller group of people. The aim of utilizing a qualitative research is thereby to learn about why and how respondents think, act and give meaning to their thoughts and actions. For this research paper I have chosen to perform a case study, which particularly focuses on how or why questions. Case study investigates a contemporary phenomenon within its 30

36 Chapter 3. METHODOLOGY real-life context; when the boundaries between phenomenon and context are not clearly evident; and in which multiple sources of evidence are sued (Yin, 1994; Hyde, 2000). The case study provided in this thesis is based on a fairly known area, change leadership, where Scanoil serves as the case I am focusing on within a quite large entity of organizations operating in the Norwegian oil- and gas industry. However, as the industry is an essential part of our welfare, I wanted to investigate how leaders in Scanoil were affected by the changes, and if they had to adjust their leadership-style due to the crisis situation. In order to uncover how the leaders react to such drastic changes and the industries abrupt need for change leadership, I found that a qualitative approach would be the more proper methodology to gather the data necessary. Hyde (2000) argues that qualitative research might include in-depth interviews, transcripts of in-depth interview, observations and other documents. I wanted to look at how leaders responded to the radical changes that the industry are facing. The way humans interact and respond to changes is a complex matter in which a survey would not uncover the basic information. Hence, I felt that it would hurt the research if I performed focus groups, due to the informant s general uncertainty in relation to the changes in the company, and the downsizing process. Therefore I have managed to conduct 8 in-depth interviews with leaders within Scanoil, all of whom managing different levels in different inhouse departments (cf. 13), in addition to information and documentation provided by Scanoil. Semi-structured interviews Semi-structured interview gives the researcher an opportunity to ask the same question during all of the interviews. At the same time, however, it is still possible to ask follow-up questions and to explore potential loose threads further, without being tied to an absolute line of questions. Nonetheless, some sort of structure has to be safeguarded. The sequencing of questions is not the same for every participant as it depends on the process of each interview and the responses of each individual. The interview guide, however, ensures that you collect similar types of data from all informants (Dayton & Holloway, 2010; 225). In order to do this research, and to investigate to which degree leaders behavior has been affected by the changes, I found it highly useful to perform semi-structured interviews. One of the reasons for this was that it involves developing an interview-guide, where different themes and mainquestions are defined in advance. Further, it allows the interviewer to conduct the questioning in an informal and relaxed manner, inviting the interviewees to be more relaxed, and 31

37 Chapter 3. METHODOLOGY consequently more honest and free-spoken. Additionally, you maintain the possibility to ask questions besides the actual interview-guide. Hence, it made it feasible for me to ask followup question through the interviews and follow up on interesting comments or statements. Had the interview been structured, I would not have the same opportunity to explore or investigate things that might have occurred during the interviews that was not taken under consideration in advance. Lastly, when interviewing an oil- and gas company, which is under a lot of attention and scrutiny during a widely covered crisis situation, it is a possibility that the interviewees are closed or less willing to elaborate. Therefore, by utilizing a semi-structural model, I secured myself from not being able to challenge or follow up on unsatisfactory answers. The interview-guide can be found in appendix Collection of data When conducting the research I used both primary and secondary information. My primary data consists of the interviewees, in addition to information from the corporation as a supplement to this. Secondary sources are information and data from academic books, scholarly articles, research journals within relevant fields, and relevant news. The basis of this thesis is built upon discussion depicted from different acknowledged researchers, as well as information from Scanoil. Further, in this section I will also describe the methodological choices made. I will present the selection of informants, designing the interview guide, as well as the implementation of interviews and the transcribing process A) Sampling Flick (2007) argues that a central feature of every research design is sampling. During this phase, researchers decide which material, cases, persons or groups that will be involved in the process. It also determines which comparative potential a study involves (Ibid.). Mainly, when collecting a sample of informants for research it is essential that the informants can reflect upon the actual theme. Scanoil is a large oil-company and I was therefore dependent on someone who could guide me in order to get the right collection of respondents. The population of informants chosen to be a part of my research was based on leaders that were able to give me a correct picture of 32

38 Chapter 3. METHODOLOGY how the changes were affecting them. I wanted preferably a certain spread in gender, age, and leaders from different levels. Hence, there are a number of different types of sample and sampling. A homogeneous sample consists of individuals who belong to the same subculture or group and have similar characteristics (Ibid.) Homogenous sample is especially useful when observing or interviewing a particular group. As my research was within a specific unit in Scanoil I managed to gather a homogenous sampling. In this manner, I wanted leaders from within different levels to see if there where any differences in the way they managed changes. Conversely, this can decrease chances of bias since the interviews were not based on just one level. The appropriate number of participants will depend on the type of research question, the type of qualitative approach used in the study, material and time resources as well as the number of researchers involved in the study. I ended up with a population of 8 leaders within Scanoil. Nonetheless, since the interviews took approximately minutes and I was introduced to a lot of the leaders thoughts and meanings in relation to the crisis, I felt that a small sampling could provide my research with the necessary information B) Designing an interview guide An interview guide is an appropriate tool when structuring the interviews. I developed a draft of the interview guide based on my theoretical background, where I was able to cover many of the aspects around my research area. The purpose with the questions developed in the interview guide was to cover aspects of leaders thoughts, feelings and experiences in relation to the oil crisis. I developed open questions in order to get the informants to talk freely about the subject of matter, with the ability to ask follow-up questions. When developing the interview-guide I wanted to cultivate questions that were concrete and understandable, and which at the same time was in accordance to the subject of matter. Moreover, it was important that the interviewees would not respond immediately, and that they rather got to reflect upon each question, in order to gather as much relevant data as possible. Kvale & Brinkmann (2009) supports this notion when they argue that it is important that the interviewer do not reveal the full purpose of the interview in advance. 33

39 Chapter 3. METHODOLOGY The interview guide consists of a short introduction to the subject of matter, in addition to information about the research project without divulging the full purpose. Thereafter, I informed the respondents about the anonymity and confidentiality of the thesis. Accordingly I asked some introducing questions, with regards to age, gender, position and seniority. Thereafter, an introduction question to the actual theme based on the crisis situation in the oil and gas industry was presented. In addition I asked some follow-up questions when this was necessary. Several others read through the question before the interviews were conducted, and a testinterview was performed in order to ensure that the interview guide was quality checked C) Conducting the interviews In depth interviews are a major source of data in qualitative research and a way of exploring informant perspective and perceptions. The value of interviews is that they are very flexible because the answers given by interviewees inform the evolving conversation (Dayton & Holloway, 2010). Furthermore, participants have the ability to explore their own thoughts more deeply or exert more control over the interview if they prefer. When conducting the interviews there are different qualitative issues one has to take under consideration. First, I wanted to establish a comfortable climate, in order to get the informants to feel that they could share their experiences and feelings in relation to the oil crisis. Kvale & Brinkmann (2009) argues that this is highly important in order to succeed with qualitative research. Hence, the interviews were conducted in Scanoil s main offices in Stavanger. Scanoil offered different meeting rooms at their offices, which maid if possible to fulfill the respondent s wish for anonymity. Audio-recording Audio recording is useful because it enables capturing the exact words of the interview, inclusive of questions. Thus, it enables for maintaining eye contact and pay attention to what the participant s say (Kvale & Brinkmann, 2009). Before I started the interview process, I asked the respondents if I could record their interview. Only one out of eight people opposed 34

40 Chapter 3. METHODOLOGY the audio recorder. This was due to the fact that the respondents felt that it would hurt the interview, because the interview subject would hold back important information due to language difficulties. Nonetheless, the audio recorder made it possible for me to concentrate fully on the subject of matter, and removed the potential obstacle of taking notes and thus not being able to be 100% present in the interview. The recordings are saved and stored, and will be provided if requested Transcribing interviews A transcript is a translation from one narrative mode-oral discourse-into another narrative mode-written discourse. Oral speech and written texts entail different language games, and according to Ong (1982), also different cultures (Kvale & Brinkmann, 2009; 177). Shortly after the interview process was over I started transcribing the data. As described by Kvale & Brinkmann (2009) oral interviews and texts entail two different languages, and therefore it was important to transcribe shortly after the interviews in order to get as many details as possible. Even though the recording provided me with records of the interviews it does not provide readers with mimicry and other impressions, hence it was important to transcribe before any of this was forgotten. By transcribing the interviewees myself, I have learned a lot about my own interview-style. Additionally, I think this process can strengthen my analysis, because by letting others transcribe there might be loss of visual clues. According to Kvale & Brinkmann (2009) there is no standardised way to transcribe an interview. Thus, in my research project, where the respondent s feelings and expressions have been in focus, I have mainly transcribed verbatim what the respondents have expressed. Additionally, I wrote down pauses when this felt natural, and laughs when I felt it was necessary for further research. Nonetheless, in some research projects it would have beneficial to write down all the pauses, overlaps, and interactions during the interview. However, I did not feel that this was crucial for my research project. 3.3 Analysing the data As previously stated, the research question will be answered by analyzing leaders reaction to the oil-crisis in Scanoil. The explorative nature of leadership and change leadership has led to much scrutiny. The increased focus on leadership and how leaders can lead successfully 35

41 Chapter 3. METHODOLOGY during changes has further triggered a sudden interest in how change leadership is performed in Scanoil during the oil-crisis. The aim is to analyze what is actually happening with leaders during times of changes, and how it affects their leadership style. As aforementioned, I am following an interpretive approach where I assume that multiple meanings or truths are possible. In this manner, I believe that a discourse analysis will be appropriate, as it enables for comparison between stories and examine the construction of these. Parker (1992) defines a discourse analysis as a system of statements which constructs an object (Phillips, Lawrence & Hardy, 2004). Discourses, put simply, are structured collections of meaningful texts. In using the term text, we refer not just to written transcription but to any kind of symbolic expression requiring a physical medium and permitting of permanent storage (Ibid). In other words, this type of analysis is used to look closer at how things are said and communicated in order to actually assess and comprehend what they are trying to say. When analysing data through interviewees, I wish to discover or see connection between leaders in Scanoil and the meaning of their claims and feelings, and thereafter analyse their assertions and obtain some connections between my research area and leaders in Scanoil. The process of analysing began by coding the data. Coding involves attaching one or more keywords to a text segment in order to permit later identification of a statement, whereas categorization entails a more systematic conceptualization of a statement, opening it up for quantification (Kvale & Brinkmann, 2009; 202). The coding process took some time, since it was necessary to conduct coding several times in order to secure that I did not miss anything important. Thereafter I categorized the coding in order to make sure that I got the relevant facts for my analysis. During the process, I tried to connect the empiricism to theory in order to get the coding categorization to match the different elements in the theory section. 36

42 Chapter 3. METHODOLOGY 3.4 Assessment for qualitative research Reliability Mehmetoglu (2004) argues that reliability can be divided into internal and external reliability. Internal reliability demands that the study s conclusions are consistent and can be reproduced. Reliability is based on the premise that different observers (researchers) will do the same interpretation or arrive at similar results based on the same data set. External reliability on the other hand, requires that all the research is repeated in another setting or at another time, and that the same results and findings are generated (Mehmetoglu, 2004; 145). Throughout the process I have worked hard to ensure that I have explained the procedure in order to provide the reader with an understanding of what I am doing, how I will do it, and why I am doing it, and thus secure reliability in my research. In this manner, all research and theory developed in this thesis are drawn from leading researchers within the field, which aims to strengthen the reliability. I have crosschecked my findings from the interviews, in addition to theory from other researchers. Further, I have described the methodology used in order to clarify how I have conducted the analysis, in addition to the discourse analysis, which was used to ensure that there were no misunderstandings. Reliability is also highly connected to researchers reflecting over the context and the collection of data and how this can affect the results. I recognize that there is a possibility that some of my interviews might be biased by personal opinions, but I have tried my best not to let personal issues affect the data. Nevertheless, I have used several sources in order to make the selection as reliable as possible. Validity When it coms qualitative research, the validity of the study is connected to the strength interpretation of the results. Validity can also be divided into internal and external validity. Internal validity is to assess whether the study s conclusions are credible. External reliability, however, represents whether the conclusions of a particular study may also apply to other settings (Ibid.). I have tried to ensure validity by crosschecking my results, questioning and reevaluating my selection and analysis, and I have been open for alternative perspectives. Additionally, my interpretation of the feedback from my supervisor, be it through comments 37

43 Chapter 3. METHODOLOGY or questions, has contributed to making me confident that I have done what s necessary to ensure this. Consequently, I am confident that the sources chosen, both in the theoretical framework, and the interviewees when collecting the data, have contributed to guarantee that both reliability and validity have been safeguarded throughout the process. Credibility, According to Mehmetoglu (2004) credibility is equivalent to internal validity in qualitative research. Creditability is about constructing confidence in that discovery and results of a study are trustworthy. During my thesis I have tried to explain and develop a good framework in order to establish credibility that my research is trustworthy. I have ensured this by observing relevant data, as well as interviews with different leaders in Scanoil. Further, I have discussed discoveries and results with colleagues from school who is not directly involved in my study. In this way it is easier to avoid bias. 3.5 Methodological reflections Qualitative research is a time consuming affair, and demands a great deal of effort in regards to being creative and thoroughly in the stages of preparation. Further, it requires a lot from the researcher when it comes to facilitating and conducting the data gathering, as well as in the processing of the gathered data. However, a qualitative research gives the researcher a unique opportunity to actually get involve in the subject, and by participating in the interviews, it is possible to both learn and engage deeper in the matter. Conversely, with a qualitative research process it is necessary to perform some methodological reflections, since the researcher actually becomes a part of the research process, and thereby creates a situation where his or hers presence may potentially affect the results. There are many limitations that one should be aware of when exercising qualitative research. First of all I would like to point to what Dalby & Halloway (2010) describes as the interview effect. Generally, it means that as an interviewer I have a certain impact on the interview subject, and that sometimes as a researcher you can modify the informants answers to please or appear in a positive light consciously or unconsciously (Dalby & Holloway, 2010; 239). 38

44 Chapter 3. METHODOLOGY During the research process, some respondents may have held back information due to uncertainty, and fear of me presenting the data to their leader. However, I tried to avoid this effect as much as possibly by securing them that this was highly confidential data and that all the interviews would be anonymous. On the other hand, there is also the risk of hearing the data, which means that there is a possibility that during the interviews, the informants may have meant something different than what the interviewer actually heard (Ibid.). This can lead the researcher to interpret certain findings and statements in a manner that fits the research in a good way, and dedicate them some significance that perhaps was not intentional from the interviewee side. However, it is hard for me to investigate if this has actually happened. Nevertheless, it is important to emphasize that I have done my best to avoid this limitation. Some of the interviews were also conducted with limited time between each interview. This can have affected the quality of the notes conduced after the interview-process, however, I tried to set of 10 minutes between each interview in order to reflect over each interview, and prepare for the next one Kvale & Brinkmann (2009) argues that some informants may be better than other ones. This is due to the fact that during the interviews one is dependent on a candidate that can talk freely and communicate, and someone who is motivated to participate in the interview. However, by cooperating with Scanoil in relation to choosing who should participate in my sample, I have done my best to avoid this. However, during the research process it became clear that there are some differences in relation to how much information leaders shared, in addition to diverging between how freely they communicated. Nevertheless, I tried to encourage leaders to share as much information as possible, by asking follow-up question and expressing a deep engagement in their argumentation. Furthermore, I may have reached more leaders in Scanoil by emphasizing quantitative research. However, it would not have provided me with the same information because the questions have to be developed on a disciplinarian level, in addition to lacking the personal 39

45 Chapter 3. METHODOLOGY part of the interview section. Therefore I find it more appropriate to use a qualitative research method. However, it might be reasonable to say that it is a limitation that I have worked under strong restrictions with regards to the actual company. Consequently, I have had to develop fictive names for both the corporation and their change program. Hence, I have been forced to hold back some information that may have been relevant for my assignment. However, this has been taken into account on an early stage, and I have thus been able to evaluate and process this possible challenge. Given that it is the phenomenon of how change affects leaders that is under investigation in the research, I feel confident that fictive names won t hamper my objective. The aim of the thesis is to explore how a certain situation affects leaders, and this is not exclusively tied to a certain program or company. However, it was important for me that the company operated within a certain sector, and that the program was linked to organizational change, and these criterions have not only been fulfilled, but the restrictions does not provide me from saying so either. Further, as previously mentioned, by only basing my research on one company in one single industry it might make it difficult to generalize the theory to other companies and industries. In other words, it will be difficult to transfer these findings since it is a small representative of a whole population. However, as the subject of matter is related to leaders suffering from transformation, and their struggles in leading change it can be compared with other industries and other situations as well. 40

46 CHAPTER 4. ANALYSIS CHAPTER 4. ANALYSIS 4.0 Analysis The following chapter is divided into two sections. The first section starts by presenting the Norwegian petroleum industry. The second section will outline the empirical findings from the discourse analysis, where the aim is to capture whether organizational changes forces leaders to change their behavior. 4.1 The Norwegian Petroleum activity In order to get a better understanding of the situation in the Norwegian oil- and gas industry, which is the backdrop and driving force behind Scanoil s need to change, its important to look into the industry s development and its level of importance for Norway. The golden story of the Norwegian petroleum activity starts at the end of the 1950 s, when a gas finding in Holland led to Norwegian optimism with regards to the potential of finding oil in the North Sea. This optimism grew even bigger with the finding of Ekofisk in 1969, and since then the petroleum industry is by far the largest industry in Norway. The oil-production reached a historical top in 2000, when Norway was the world s third biggest exporter of oil and gas. Since the beginning the oil production has contributed with approximately 9000 billion to the Norwegian BNP (gross domestic product), and stood for approximately 21% of the country s economical growth in 2013 (oljedirektoratet.no). The petroleum industry has had a huge affect on the employment rate, providing Norwegians with attractive and profitable jobs. Additionally, the industry affects other secondary industries, giving substantial repercussions for activity and employment. Thus, we expect that Norway offers individuals with approximately jobs, only within this sector. However, the on-going crisis has been at the expense of many individuals with roughly jobs disappearing, and the Norwegian unemployment rate is increasing, with 3.1% in August 2015(nav.no). 41

47 CHAPTER 4. ANALYSIS Radical changes in the oil-sector The oil industry has been like a fairytale for Norwegians, and there have been discoveries of oil- and gas fields that no one expected. Today, however, less manufacturing, fewer discoveries and new fields, as well as stronger demands from government, challenge the production. However, the petroleum industry does not guarantee a perpetual economic growth and rising employments, it has become evident that such positive consequences do not grow into the infinite. There are also other and often negative consequences, and challenges therefore need to be tackled by actions, knowledge and experience. Proactive research and development on technology, and focus on organizational and human factors has to be under consideration in order for the industry to establish a sustainable solution for the future (sintef.no, 2005). The Norwegian government published in 2011 A sector for the future about the petroleum activity (Meld.st.28 ( )). The government wants to facilitate a conscious effort to maintain production from the industry at a very high level for generations to come. The petroleum operations are described as Norway s largest industry, measured in value creation, government revenues and export value. Currently the industry contributes with about a fifth of total value creation and a quarter of state revenues. However, since the start of the adventure, the industry has experienced economic fluctuations and changing oil prices. Although there have been low-cycles, the sector has been characterized by growth and increasing productivity. Graph from (regjeringen.no)

48 CHAPTER 4. ANALYSIS As the figure above illustrates, the oil-production has been reduced since year 2000, and this trend is estimated to continue. Graph from (regjeringen.no) 3 The figures presented above, illustrates that there is a clear indicator towards a negative trend in the oil industry, and that something has to change dramatically in order to obtain production. The ongoing crisis started approximately in 2014, and it is still pessimism that characterizes the industry. Weakened economies, falling oil prices, fever new projects and lower activity forces companies to downsize their work stock. Even though it is interesting to review and look into how employees and commentators react to how the companies are handling the challenges, as mentioned earlier, this thesis will be based upon leaders, and how they have responded to the demanded changes. 4.2 Empirical Findings As a framework for the text analysis I have chosen a discourse analysis, as described in the methodology section. The analysis is completed with an assessment of 8 different leaders in Scanoil in order to obtain a better picture of how leaders in Scanoil manages the crisis situation, and how the process has influenced the way they lead. Additionally, I have used information provided by media as well as the company itself. In the following section, I will present the main findings from the interviews I have conducted. In appendix 2 you can find the transcription of the interviews

49 CHAPTER 4. ANALYSIS The section will, based on the research questions, present and assess leaders response in relation to the changes in the industry based on the actual statements from the different leaders. By presenting the findings based on the research questions, I aim to capture the development of how leaders perceive the changes in an overall perspective, and throughout the process see whether the response differs significantly among leaders. The findings and argumentation will be backed up with quotes, which have been chosen through multiple assessment of my material Organizational changes Leaders play a central role in leading change, the same way as change has major influence on leadership as Gary Yukl (2013) argue, change is the essence of leadership and everything else is secondary. Even though leaders usually play an integral part in facilitating more effective leadership during change, a change process depends on good leadership, and more importantly, that leaders agree with the need for change, in order for a change process to succeed. Generally leaders in Scanoil consented upon the need for an organizational and operational change, given the condition of the industry. The need for change within the industry generally derives from the fact that the oil-industry has been characterized as a booming industry with infinitely access to money, and therefore a lack of focus on cost-efficiency. One leader expressed that during an earlier change process, he was surprised by the amount of employees hired in stab-positions. Thus, he wondered how all of those employees had enough assignments to fulfill a day. During the research process it has become knowledgeable that this issue probably characterizes the entire industry. Many of the supply-companies within the industry, as for example Aibel 4, have been hiring at a seemingly unstoppable level. Thus, the oil-crises have affected them enormously, and they are now downsizing more than any other company. Thereby, the example illustrates that many of the actors within the industry has to transform in some degree in order to stay relevant. Beerel (2009) strengthens this argumentation when he claims that all organizations today, regardless of their purpose or mission, have one common goal and that is to remain relevant. Or as Baesu & Bejinaru (2013)

50 CHAPTER 4. ANALYSIS argues, one has to alter the present shape in order to become a better one. Hence, in order to become a better one, Scanoil was dependent on their leaders actually accepting, and even advocating, the need for change in their company. In order to survive in the future, the oilindustry has to collectively think and act differently. One leader expressed that he was motivated by the changes: I like them and I think they are motivating. Earlier we have wasted money, and taken bad decisions, and therefore I hope that we can establish something that is sustainable and more cost efficient. Generally, Scanoil is affected by the changes in many ways, particularly investors have responded positively to the changes. The reason for this is that by implementing specific changes, many of the operations are supposed to be more efficient, with less use of money, which again generates more returns for investors. Nonetheless, internally the company has been affected in a more vividly direction. First of all, the PACE initiative can be seen as a top-down initiative, and some of the leaders has expressed a concern due to closed-processes within the top management. By this, they explain that there is little information provided in regards to the downsizing activity. For example Drilling & Well were aware that they most certainly would be affected by a downsizing period, however, they were not informed about this process before June 2015 (after my interview-process). This contradicts with Bridges (1991) ideas explained in his model Managing the transitions. He argues that in order to succeed with a change process, one has to mark the endings for everyone to understand. When management holds back information in relation to personnel, this affects the change process negatively. This issue appeared in the conducted interviews, as many of the leaders expressed a concern for their employees. This was due to the fact that more and more of them were concerned about the future, and thereby there was a need for more information and communication daily in order to keep their employees motivated in their jobs. As a consequence to the lack of information provided by top management, leaders need to dedicate more time and resources on their employees making them confident and establish some motivational drivers in order to survive. Aitken & Higgs (2012) supports this notion when they argue that leaders need to express a deeper understanding for their peers and connect with their motivational drivers, which engage heart, as well as minds. 45

51 CHAPTER 4. ANALYSIS Critical deliveries during the implementation of PACE How has the implementation and establishment of PACE affected leaders workday? As a direct response to the changes, leaders struggle in order to find the right way to handle the changes, especially with regards to providing information and responding to PACE. Additionally, the leadership-role suffers from some changes, due to the need for more visible, clearer and trustworthy leaders. PACE was initiated before the actual crisis hit the Norwegian oil-industry. Therefore many of the employees, as well as the leaders, did not understand why they should transform their company in such a large degree. In this manner, employees did not really accept the fact that the company was changing. Additionally PACE was by a majority of leaders perceived as to wide and to disciplinary, with a lack of narrowness and specificity. Furthermore, the company had already been through a wide number of change processes before, and therefore many employees looked at the initiative as just another reorganization. Hence, Lewin s force field model can strengthen the need for letting go of the past (refreezing), one need to realize that the old ways of doing things is no longer adequate, and in order for the company to survive, the company has to change. However, the acceptance did not really arise until the oil-crisis became apparent, and employees really saw the need for change. Thus, leaders have been responsible for findings solutions to make employee see the need for change and depersonalize the issue, and furthermore argue that the change process can be viewed as something positive for the future. Moreover, as PACE is fairly disciplinary, leaders got in collaboration with their employees the possibility to develop their own goals within each initiative. For example one of the goals with PACE was to reduce costs by 25%. In order to actually reach this goal, Scanoil was dependent on their leaders actually transforming the initiative into something real. This process has been perceived as both positive and negative. First of all, the majority of the leaders expressed a positive concern in relation to PACE, due to the fact that they got to develop their own goals, and these goals made PACE a motivational driver during this critical situation. However, PACE has demanded more responsibilities for leaders, as their employees are now more dependent on leaders communicating daily concerning everyday assignments. One leader explained that this process has been particularly hard for some engineers, as many 46

52 CHAPTER 4. ANALYSIS of them are used to work within figures and numbers, which created a need for more direct and concrete messages. I need to communicate that for example when we design a well, it is important that we look closer at that, that, that and that. I need to be concrete with my group so they know what they should do. Additionally, leaders pointed to the fact that they have used a lot of time actually figuring out what this change means for the company, and in which way the company is heading. Nayar (2010) argues that ones you have created the need for change, there is often a significant gap between the intent to change and the actual act of changing. One needs to realize that by bringing information out in the open, employees feel included. Hence, they start to see the necessity of changing. Furthermore, as there have been several reorganization-processes in the company, leaders are forced to adjust their daily-work routines in relation to fewer personnel available. As a part of the PACE initiative, Scanoil has lost several of their consultants as well as local employees. This process has been challenging since PACE has brought new work-routines and a new strategy for the future, which forces leaders to work with somehow the same work-amount, but with fewer human resources available. This have been challenging for leaders in relation to not letting this issue affect their employees, and at the same time ensure that the work is completed in more effective ways than previously Leaders resistance/acceptance to change Since the beginning of 2014, the oil-crisis has had a grand impact on Scanoil, which has forced the company to downsize many of their units, change their work routines, and as a result of this caused fewer projects and assignments. These consequences have led to insecurity, a cultural change and an uncertain future among employees in Scanoil. In this manner, employees and leaders will react differently to the changes, and how they decide to live with them. Higgs & Aitken (2012) presents a framework for key factors determining how people react to changes, cf. p.27. Leaders in Scanoil are suffering from both an in response experience of the changes, and in direction. The victimized role is concerned with resistance towards the change. In direction on the other hand, is related to transform others resistance to something positive. First of all, both leaders and employees experiences some sort of 47

53 CHAPTER 4. ANALYSIS resistance in relation to the change process, however, as a leader you also have to be in, in direction-mode, which means that even though leaders struggles with the fact that the changes are transforming the company, and there is nothing they can do about it, they still have to convince their employees that this process can be turned into something positive. In addition to the latter, they will not only have the responsibility of convincing that the changes will have positive outcomes, they must also be able to show how the outcomes are positive, in order to motivate their employees. For example one can argue that employees in Scanoil are suffering from an in response source of changes. This means that resistance is build upon a victimized role, where employees look at their selves as victims. Erwin & Garman (2010) argues that how a person reacts to change depends in part of the person s general confidence about coping with change successfully. This can be verified by one leader who argues that the older generation might be more unsecure during a change process, than the younger generation. This can be substantiated with an uncertainty with regards to futuristic possibilities. One can assume that continuously changes affects the older generation negatively due to an uncertainty with regards to finding other jobs in other industries, and at the same time, they can be threatened by the fact that the younger generation might handle the changes more rapidly. Thereby they might experience the changes as more radical, due to an uncertainty and a lower risk tolerance contra the younger ones. In this manner, leaders in Scanoil have been able to perform in the light of systemic leadership, which deals with these psychological and emotional issues by providing a huge amount of their resources communicating and informing these employees. As aforementioned, how a person reacts to changes, depends in part of the person s general confidence. Thus, this confidence is affected by prior experience with change as well as by traits, such as self-confidence, risk tolerance, openness to new experiences, and internal locus of control orientation (Ibid.). Hence, the majority of the leaders I have been interviewing had been through several change-processes before, which enhances their skills in leading change. However, there are many leaders that have recently been promoted to line leaders, which means that many of them have never performed leading change before, and for them this process can be perceived as particularly challenging. 48

54 CHAPTER 4. ANALYSIS Furthermore, there are large gaps between how leaders in Scanoil have responded to the changes in their company. Leaders diverge in how they manage to involve others and how they look at the crisis as an opportunity or as a failure. One leader argued that the Norwegian work-culture resembles routines, and changes that flinch from those are catastrophic for them. Therefore it has been problematic that the change initiative has been a top-down approach, which means that every decision comes from above, and leaders have to adjust to these changes. Some leaders have felt that management has not been open in the process, and they have kept a lot of information for themselves. This contradicts with Kotter s philosophy, where he emphasizes the need to communicate the vision and keep communication levels extremely high throughout the process (Cameron & Green, 2012). Moreover, leaders differ in how they perform and lead, and some leaders have a more demanding leadership-style than others, and therefore they have more trouble succeeding with the changes. Another leader argued that leaders differ depending on where you are in the company. For example some of the leaders have been through so many change processes before that they have an attitude towards the change like this will pass through, we have been through changes before and everything went back to normal. These types of attitudes makes it difficult to lead, in addition to actually motivating employees to do their jobs regardless of what is happening in the industry. Higgs & Aitken (2012) argues that leaders need to express a deeper understanding for their peers and connect with their motivational drivers, which engage hearts as well as minds. Hence, if leaders do not see the degree of severity, they are not particularly suited to lead their team during the transformation. Furthermore, first-line leaders as aforementioned, which are newly promoted leaders, have not experienced leading during a change process before, and therefore they might have some difficulties knowing how to create engagement and ensure that they keep their peers up to date with regards to information, communication, trust etc. In this manner, it would have been beneficial for these leaders to go through workshops on leading change earlier in the process than what they actually experienced. 49

55 CHAPTER 4. ANALYSIS Cultural change When a company is transforming, the culture is also suffering from those changes. When Scanoil implemented PACE, it entailed a need for a cultural change. As a direct consequence of the initiative, a new strategy for the future arose. Earlier, Drilling & Well has had a high focus on being time-sensitive. This means that the more time they disbursed, the more money they spent which is of course negative for the company. However, with PACE this strategy shifted towards becoming more focused on costs. The VP of Drilling & Well argued that this shift has been highly demanding to transfer into, and stated that First of all, you have to force your mind to think more in relation to costs than earlier, and at the same time, you have to except that there is a change in work-routines. Hence, leaders have to convince themselves that this is the right direction for the company, in addition they need to persuade their employees, as well as to implement this new form of working. Carnall (2002) strengthens this argumentation, when he argues that in order to ensure an effective change process, one has to adapt to a new culture, which correlates with the new strategy for the future. Furthermore, Scanoil consists of both international and Norwegian employees. The leader of Plan-Drilling argues that these two cultures diverge extremely when it comes to changes. International employees are used to these kinds of transformation, and they do not fear for their jobs, rather they see it as an opportunity to work harder, or to get a new job. However, they demand a high-level of communication and information concerning the process. Further, several of the leaders argued that Norwegians on the other hand, are not used to these types of changes. The Norwegian work-culture is fairly based on employees being able to take part in big decisions made for the company. Hence, when top-management held back important information in addition to the implementation of the cost-saving efficiency program, PACE, leading these two cultures became highly challenging for leaders. Thereby, leaders were forced to adjust their behavior when communicating to these two parties, first, there was a higher demand for more information from international employees, as well as Norwegians demanded more visible, open and honest leaders. 50

56 CHAPTER 4. ANALYSIS Adjustment in leadership behavior The leadership role has been through several change processes during the past years. The emphasis is now more directed to leaders who have the abilities to collaborate, and to communicate openly with their employees. In this manner, Graetz (2000) argued that change leadership involves two roles: instrumental and charismatic. When looking at how leaders in Scanoil have been able to lead their employees during the change process, I wanted to look at the importance of these two characteristics. Generally, the majority of the leaders provided instrumental leadership when they involved their employees in the process, and at the same time motivated them to the desired behavior. This can be exemplified with the implementation of daily-meetings with their employees, addressing difficult issues, and at the same time discussing futuristic strategies for reaching the goals of PACE. Additionally charismatic leadership is characterized as personalized leadership. During the research process, it became knowledgeable that leaders in Scanoil have become more concerned with performing charismatic leadership than earlier. This can be typified with their emotional feelings towards their employees, thus, not wanting to hurt them. And at the same time, providing their employees with a more emotional side, strongly connected with strong interpersonal skills. When changing an organization, it is natural that some adjustments in leadership behavior have to be made. First of all, employees reacts differently in relation to changes, and as a leader you have to be able to deal with different opinions and reactions. This can be challenging, especially during the implementation of PACE when information was characterized by much obscurity. Due to this, leading during this phase has been particularly hard, given that leaders did not really know what was happening further up in the organization. However, they had no other option than to expel positivity and composure, and thus live up to their roles as leaders. Moreover, the process of selling the message, which can be quite difficult in itself, was particular challenging when leaders were not able to see a clear solution to the problem themselves. As one leader pointed out, the toughest part has been to make the change process into something positive, and develop engagement and motivation. This process requires 51

57 CHAPTER 4. ANALYSIS behavioral changes, and employees can not see the need for change before they actually change their behavior. The majority of the leaders expressed a need for a more apparent and open leadership culture. It is important to prioritize a close relationship with employees, carefully follow-up projects, and demand things to happen, in order to provide the necessary outcomes. During such severe changes it is important to become a role model for employees. This can be seen in light of Yukl (2013) descriptions of relation-oriented behavior, where leaders are concerned with increasing trust, cooperation and job satisfaction. I find the relation-oriented behavior extremely important in Scanoil s occasion, due to the recognition that generally leaders wont be able to obtain followers (employees) motivation and engagement without establishing trust and job satisfaction. Furthermore, there are some challenges with regards to diverse leadership profile. There will be a broad specter of leaders in a large company, and subsequently, notably in Scanoil, many of those are engineers. Thus, several of these leaders are not familiar with change processes, and many of them have not been through relevant training in how to lead during changes. However, the company has been through a multitude of change processes, and consequently one can argue that the majority of the leaders have some experiences/skills in leading change. Thereby, it has been up to each individual to develop their own leadership style in order to succeed during changes. Nonetheless, Scanoil has initiated training and guidance workshops in leading change developed by an HR-team in Scanoil. However, these workshops were implemented late in the process, probably too late, and therefore leaders did not get maximal exploitation. This may have affected the change process negatively since there are some uncertainties in relation to leading during change. This potential problem can also be seen in the light of Lewin s force-field model. In the change-phase, he outlines the importance of arranging training sessions, where one is supposed to develop new ways of thinking and handling, and therefore one might be tempted to say that leaders were left to handle the change process without some of the most crucial ingredients, that was supposed to be ensured from the top-management. 52

58 CHAPTER 4. ANALYSIS Further, the transitions forces leaders to become more focused and act upon the changes fast. The individual leader has to think long-term, where unknown factors may emerge, and adapt quickly to changes. However, as a leader it is important to have the corporation in your back when decisions are to be taken. Nonetheless, leaders might have an opinion with regards to the changing conditions, even though it is important to act in accordance to the corporation s goals. Several of the leaders interviewed argued that this could be challenging, since they were used to take decisions individually, with relatively loose limits. Furthermore, leaders are now forced to dedicate more time collaborating with stakeholders. Consequently, there has emerged a need for leader who can collaborate, communicate, and work hands-on. This proves that the process has forced leaders to change their leadership behavior in some directions. Changes in leadership behavior can be categorized as change-oriented behavior, where leaders are concerned with understanding the environment and define new ways to adapt to these changes in collaboration with stakeholders and investors (Yukl, 2013). Additionally, some leaders have become more interested in industry context. The more information identified and processed in relation to the challenges in the industry worldwide, enhances leaders skills in sharing and expressing information. As one leader expressed, It is highly important to understand context in order to have a factual base when you communicate with peers, in order to provide them with some feeling of security. Why does the company react like it does? Supplementary, the need for external information cannot be underestimated, in order for the leader to respond to- and to understand why the company is acting as it does, and to deliver messages with regards to cautiousness, since one message can be interpreted a hundred different ways Leadership styles Transformational leadership can be characterized by four critical components as mentioned in p. 31. These four components consist of different characteristics, which are considered important when changing (Bass, 2006). Further, I would like to emphasize these components when evaluating leaders utilization of these characteristics throughout the change process. In order to transform an organization, management depends on leaders that are perceived as trustworthy, who followers will seek to identify with, and Bass describes this as idealized 53

59 CHAPTER 4. ANALYSIS influence. However, as the sources in my gathering of data are leaders, I can only assume that most leaders in Scanoil are perceived as trustworthy. Nonetheless, when the process first was initiated, management did not have much influence on the rest of the company, due to lack of information provided. Therefore if leaders in Scanoil are to obtain their trustworthiness, they need to communicate strictly and clearly so that their followers identify with their direction. Leaders in Scanoil can be perceived as motivational drivers, as they have to inspire their employees when working with PACE, which can be understood as one of Bass components, namely inspirational motivation. The benefit most organizations in the oil-industry has right now, is that the entire industry is changing, and therefore employees might have more motivation and trust towards their company, than they would have had if this was just another reorganization. Generally, I assume that most employees have an interest in reassuring that their company survives this crisis. However, in order to obtain this motivation, it is extremely important that leaders include their employees in the process. Intellectual stimulation occurs when leaders stimulate their employees to think differently, reframing problems, and approaching old situations differently. PACE is developed in order for the company to think differently when they work. Therefore one can assume that generally people accept PACE and find it highly stimulating, due to the initiatives challenges, as well as the possibility to work with something new and different in order to keep the company alive. Individualized consideration, however, is when leaders pay special attention to each individual s need for achievement and growth by acting as a coach or a mentor. Leaders in Scanoil are focused on keeping their employees in the loop. During the research process it became evident that leaders are forced to think more about their employees during the change process. As one leader argued, earlier many employees would think that something was wrong if a leader entered their office just for a cup of coffee. Now, however, employees are demanding daily conversations with their leaders. They need to reassure that they have the information they need, and to know their leader have their back. Additionally, one of the leaders has also experienced some challenges with regards to older and younger generations. Thus, he has been forced to work as a mentor in relation to the older generation, making sure that they feel confident and secure in their jobs. In this manner, it is 54

60 CHAPTER 4. ANALYSIS natural to claim that each leader has some transformational characteristics, and these components are reinforced in relation to the critical situation of the company, and thus the undergoing change process. However, as I looked into the diverse leadership-styles in connection with Scanoil s current situation, it has become apparent that systemic and situational leadership is also highly applicable for transformations, and thus leaders in Scanoil. Traces of systemic leadership became apparent when interviewing the leader of plan drilling. This was mainly because of his challenges with regards to the generation distinctions between older and younger employees, especially in relation to processing information. Systemic leadership is based on the recognition that people generally resists changes. In this manner, it is important to reprioritize employees values and establish some sort of a new behavior (Beerel, 2009). Consequently, this leader has prioritized being honest with his employees, establishing daily-meetings where employees get to talk together about what s going on, and at the same time the leader gets to inform their employees about the current situation. Nonetheless, in order to control the differences between these two generations, the leader of plan drilling have developed much of his resources in order to obtain the older generation s motivation, and ensure that they feel secure in their jobs. As aforementioned, one leader argued that several of the employees have already been through many change processes during their time in Scanoil. Therefore, they do not perceive the real consequences of this process. Many of the employees are arguing that We have been through this process before, and everything went back to normal in a short amount of time. However, what they do not seem to understand, is that this change has already lasted for a year, and media are continuously posting article after article about a new company downsizing or loosing more project etc. Systemic leadership addresses the need of dealing with this sort of denial, as they often seem to blame someone else, or they do not look at the changes as something they have a personal engagement towards. For example when downsizing the stab-function in Scanoil as mentioned earlier, one leader did not seem to care because he did not have a personal engagement to this unit. Additionally, it is reasonable to believe that a larger part of the whole industry is suffering from the victimized role as Higgs & Aitken (2012) presents, where they do not take any responsibility for the actions taken, and 55

61 CHAPTER 4. ANALYSIS the consequences this has triggered. Therefore Scanoil is dependent on leaders performing systemic leadership, where they can work with and eradicate this sort of denial. Situational leadership on the other hand, emphasizes leaders capability to change their employee s behavior in order to succeed with the change process. In order to fully understand how leaders in Scanoil are able to assess diverse situational leadership profiles, I emphasized the difficulties of implementing PACE, and how the change-process affected them as leaders. First of all, there are differences in what leaders consider most difficult when implementing PACE. Most of them mentioned the fact that they had not really been a part of the most difficult process of PACE, up till now they have worked with succeeding with the change initiatives, and argued that this process has mostly been fun and exciting. Nonetheless, the PACE initiative became hard when it was linked to rationalization and downsizing. Particularly the process has been characterized by much uncertainty. Many consider the initiative as short-termly, which affects the leadership role. In accordance with this, it is argued that it is easy to talk about the initiative as something positive, another factor is to start acting by it, and generating a positive outcome from it. Vice President of Drilling & Well argues; How can you ensure engagement, motivation and certify that things actually happen? What about when things stop, when we have to take pauses in a project due to the economical, operational or personnel issues? How do you tell your employees to keep their motivation, when they do not get to do their actual job? However, one can consider situational leadership as adjusting to diverse leadership-styles depending on the situation. During the crisis-situation in the oil-industry, leaders have been forced to dedicate a lot of time and resources in developing coalitions that can contribute in succeeding with the change initiative. Additionally, leaders have developed a better understanding in relation to the diverse responses employees have in relation to changes. In this manner, leaders have to adjust to each individual making sure that they feel confident and secure during the process. Moreover, Higgs & Aitken (2012) argues that situational leadership consists of different leadership-styles during a change process, as aforementioned. Nonetheless, during the implementation of PACE one can characterize leaders in Scanoil as performing both coercive/commanding & authoritative/visionary leadership. When 56

62 CHAPTER 4. ANALYSIS implementing PACE it was important for leaders to abide a commanding leadership-style where leaders were in control, as well as authoritative leader who could point out the new direction. However, as PACE has been implemented and employees get used to the changing conditions, leaders have developed a more democratic approach where they want as much valuable inputs as possible from their employees Leadership characteristics in association with effective change management Change requires leaders to transform and adapt to new procedures, organizational behaviors and actions continuously. However, there are some differences in how one can perform effective change management. In the theoretical framework presented in section 2.0, I assessed different change models for leading change. For example Lewin s Force Field Model proposed that the change process could be divided into three phases. This model can be compared to William Bridges model, managing the transition, where he argues that a change process suffers from an ending a neutral zone and new beginning. Lewin proposes that in order to succeed with change, there are two approaches. One is to increase incentives and use position power to force change. The other approach is to reduce fear of failure or economic loss. Thus, the first approach can be compared to this case, as leaders can communicate that by succeeding with PACE, they can secure jobs and establish a sustainable future for the company. The unfreezing process can be seen as the process when Scanoil s management acknowledged that there was a need for transformation in relation to the changes in the oil-industry. Even though Scanoil implemented PACE before the actual crisis hit the oil-industry, there were clear signals pointing towards a critical situation. Therefore management decided to come up with a change initiative, which represented some main goals that the company had to reach in order to survive. In addition to this, Scanoil started the process of downsizing the company, first out was the stab function. Hence, leaders role in this process is to develop a change in behavior and to affect employees into realizing that there is a need for change. Further, the changing process is characterized as looking for new ways of doing things and to select a promising approach. When PACE was initiated, employees were forced to deal with the transformation by developing their own goals within PACE. For example one of the 57

63 CHAPTER 4. ANALYSIS initiatives is to reduce costs by 25%. This means that each department within Scanoil has to come up with their own plan in order to reach this goal. Hence, leaders within different departments in Scanoil have developed change teams, where they discuss and evaluate which direction to lean into in order to succeed. Finally, the refreezing process represents when the new approach is implemented and established. This process can probably characterize the company s position right now. Employees in Scanoil are working within the PACE initiatives, and they are starting to get used to the new realities in the company, and accepting the need for change. However, there is a long way to go in order to fulfill the actual purpose of PACE and leaders are forced to deal with these changing conditions everyday. Another change-leadership enthusiast is Kotter who has developed 8-steps in order to transform an organization. Kotter s model can be seen as simple, meaning that his eights step might be perceived as relatively disciplinarian. However, I wanted to illustrate his model in this thesis, due to his recognition of emphasizing the value of communicating on a high level, as well as his idea to develop a guiding coalition. Leaders in Scanoil has assessed these approaches when developing change-teams with diverse change agents that they thought could contribute in succeeding with the change process. This has proven to be quite valuable, since leaders have been able to pick different employees that they look at as change agents, and establish several coalitions that can work together in order to develop a sustainable change process. Additionally, they have expressed an understanding for the importance of a high degree of communication between employees and leaders during a change process Change agents It is argued that change agents are to represent the voices from below. In Scanoil s occasion this is highly relevant since the initiative originally comes from top-management. As aforementioned, earlier employees have been used to taking part in huge decisions, nevertheless, as the initiative has been a top-down approach, this flexibility has decreased. Hence, it has been important for leaders to represent their employees in a manner that reflects their opinions and feelings towards top-management. 58

64 CHAPTER 4. ANALYSIS Additionally, leaders are forced to deal with maintenance of culture of trust between each employee everyday. Vice President of Drilling & Well said that during the change process the level between each individual became smaller. During the process it has been easier for her to actually talk to employees on the bottom level, when she would ordinary talk with their leader. This is mainly positive due to the fact that the hierarchy becomes less visible, in addition to building up a more solid culture of trust between each individual in Scanoil. Nayar (2010) argues that communication is highly important during this process due to the fact that employees often recognizes which problems the organization are struggling with, even before management realizes it. In this manner, there have been some complications due to the fact that the management in Scanoil has kept most information secret. Ordinary employees in Scanoil are used to participating in decisions and conveyed their perspectives on different matters. This has been challenging during the change process because employees have lost their flexibility some how. Therefore there has been a lot pressure on the leaders in Scanoil actually communicating what they are supposed to in addition to pleasing employees. 4.3 What leaders do during change Finally, to sum it all up, I would like to highlight Scanoil s four key assignments as described in the introduction of Scanoil, for leaders in order to succeed during changes. Leaders create energy, is based on the permission that leaders are suppose to ensure that loose rumors do not go around preventing unmotivated employees. One of the leaders in Scanoil mentioned this issue early in the process. His main assignment during this transformation was to provide as much information as possible in order to reduce uncertainty, which creates rumors. Additionally, he also mentioned that if his employees said that they were okay with something, and later he noticed that they were starting rumors and talking about in the hallways, he would have a serious conversation with them. It is okay to be uncertain and afraid of the future, however, you cannot say that you are okay or that you agree with something if you do not. Furthermore, leaders in Scanoil are concerned with providing their employees with assignments strongly connected with PACE, in order to achieve the goal of the initiative. Additionally, the change process and the implementation of PACE can be looked at as a valuable learning curve for futuristic challenges. 59

65 CHAPTER 4. ANALYSIS Leaders reduce uncertainty means that leaders must prioritize critical change activities and reduce uncertainty by communicating what is important with the team and individually. During the research assessment is has become evident that leaders in Scanoil generally are concerned with reducing uncertainty. Even though many of the leaders expressed a concern for their future, they mentioned the fact that they had to stay positive and obtain motivation and trust. Messages that were hard to understand needed to be interpreted properly in order for their peers to take the message positively. One of the leader even expressed that he had committed to Scanoil to be and behave as a leader, and even though he might did not agree with all of Scanoil s decision, this was his role, and he would do what that role contained. Leaders create presence implies the need of having to ensure that the individual leader is seen in the process. They are both accessible and highly visible. The Vice President of Drilling & Well said that the change processes has forced them to communicate besides the hierarchy. It is now much easier to communicate with i.e. a line leader than earlier. Furthermore, leaders held daily meetings with their peers in order to keep them close and make sure that they felt visible in the process. Leaders pass on information, entails that corporate information is translated and facilitated into practical information for the individual. This aspect is one of the most important approaches leaders in Scanoil have provided and it is illustrated by the way they have approached PACE. The change initiative is highly broad and therefore each individual leader in collaboration with their employees has transformed these initiatives into something more realistic and practical. Hence, PACE is now more motivating to work forward with, and it takes the focus away from downsizing and crisis situations in the rest of the industry. Lastly, it is important to acknowledge that these key aspects are considered in the view of leaders in Scanoil. However, if I were to talk with employees in Scanoil these interpretations might be considered completely different. The findings analyzed above will also be summarized further in the upcoming section, where the findings will be discussed against the theoretical framework of the thesis. 60

66 CHAPTER 5. DISCUSSION CHAPTER 5. DISCUSSION 5.0 Discussion In this section, I will discuss and analyze my findings from the analysis in relation to the academic literature presented in the theoretical section. Based on my findings in the previous chapter, I will first present the most significant challenges leaders are facing during PACE and the crisis situation in the oil-industry, and explain how these changes forces adjustments in leadership behavior. Further, in order to discuss the case analysis and empirical findings in relation to change leadership, I will supplement with literature on change leadership and different change models cf. theoretical framework. 5.1 Identifying the main challenges When looking at the empirical findings from the analysis, it is noticeable that all the leaders in Scanoil are experiencing some challenges with the change initiative, although in differing extent. However, there have been adjustments with regards to leadership behavior and style. First, Scanoil s management team failed to exploit the possibilities of providing leaders with workshops on leading change to its full extent from the beginning. The involvement appeared late in the change process, which means that many of the leaders had already been through the stages that would have been provided in the workshops. The majority of the leaders felt that this might have affected the change process negatively, since Scanoil consists of a broad specter of leaders, and i.e. first-line leaders have not been through the process of leading during changes before. Therefore it would have been beneficial for the company and their leaders if this training were initiated before the process. However, it is worth noticing that implementing and initiating workshops from leading change is highly valuable and an effective tool for the future. Supplementary, the information process from top-management when implementing PACE was limited. At the very beginning, employees and leaders in Scanoil did not quite understand why the change initiative was developed. This was due to the fact that PACE was implemented before the actual crisis hit the oil-industry and the lack of information provided 61

67 CHAPTER 5. DISCUSSION created much uncertainty. However, as it developed into a huge crisis for the entire industry, it became more clear why the company acted the way they did. Thus, it would have been beneficial for Scanoil if leaders were informed about the change process earlier, and if they were more involved in the process. Hence, the change process has been characterized by much uncertainty and demands from management, which leaders have been forced to adapt to and abide. Further, PACE can appear as quite ambiguous, for example with the goal of reducing costs by 25%. Many of the leaders were blown away by the goals set by the company. However, as they had the opportunity to develop their own goals within each initiative, it became easier to work and accept the changes. Additionally, management in Scanoil made it possible for leaders to approach PACE in their own way, which made the initiative a motivational driver in the crisis situation. Therefore, PACE has generally been looked at as a positive initiative for the company, since employees can work with something new, which can gain motivation, and additionally leaders get the opportunity to grow in their own way. However, the challenging and dramatic part of the change initiative became apparent when it was compared with downsizing and restructuring. Moreover, during the first few months the company did not understand the seriousness of the change initiative. This is partly due to the fact that Scanoil has been through several change processes before, and many of the employees looked at PACE as just another change process. At the same time Scanoil got a new CEO, who also partly gave rise to new goals within PACE. Hence, the reliability has been of some various degrees. Thus, managements handling of the crisis situation provide further negative repercussions for leaders, as they are the once communicating the message on to their employees. Additionally, the uncertainty in relation to downsizing and restructuring makes the process more difficult than it could have been if the information flow had been better. As previously noted, the company initiated a change program that can be seen as a top-down approach. Hence, there is a large need for information flow downward, and between each department in the company. Drilling & Well did not get information in relation to the downsizing process before June 2015, and even than, they only got information about the upcoming downsize, but 62

68 CHAPTER 5. DISCUSSION no additional information was provided. These messages are highly uncertain and contribute to reduce motivation and will to actually remain effective and productive in their work among employees as well leaders. It is also worth mentioning that I have only been researching one department in Scanoil, namely Drilling & Well. If I were to talk with more leaders in other departments in Scanoil, it is reasonable to assume they would say the same, given that the top management did not have any reason to communicate poorer or less detailed to Drilling & Well, than to any other department. Moreover, it is known that people generally react differently towards change. Some of the leaders have different experiences when it comes to how their employees are reacting/facing the changes. The most apparent challenge has actually been cultural differences. One of the leaders is working with both Norwegian and international employees in his team. He experiences huge differences between these two cultures. Norwegians are not used to these kinds of situations, and they exert much more fear than international employees. Normally the Norwegian culture is not based upon hierarchical structures, employees are in much larger degree than others involved in any decision process, and have the ability to discuss and come up with own ideas during this process. However, this change has affected this form of flexibility, and has forced employees to change their culture and work behavior. Additionally, there have also been some differences between the older generation and the younger generation in relation to the changes. The younger generation exerts less distress than the older generation. This can be due to the fact that they do not fear that this situation will last forever, as well as they see opportunities in other industries and other companies, while older employees might feel that they will face more difficult conditions if they are forced to look for new jobs. This has challenged leaders in relation to how they communicate between these two parties. Especially, some employees have demanded much of leaders time in relation to communication and establishing some sense of security. Finally, there are clear indicators pointing at leaders that have been forced to adjust their leadership style and behavior. Before the crisis-situation, their role was dedicated to guide and lead their group in the right direction, and function as a frontrunner for their unit. However, as the crisis situation accelerated in high-speed, leaders are now forced to function as both a 63

69 CHAPTER 5. DISCUSSION psychologist and a frontrunner. They have to communicate daily with their group, be visible for their followers, have a stayer-ability, establish an honest and open relationship between each individual, and they need to dedicate a lot of their time communicating and informing their employees, as well as stakeholders, investors and customers. Furthermore, leaders have to adjust employees workload due to fewer personnel, but with somewhat the same tasks and activities as before. This has been challenging since some employees are frustrated over their increase in workload. It is hard to see that the company should downsize even more, when there is a need for personnel to cover their workload. Moreover as one leader pointed out I need to be brave, I need to handle that I might be the most hated person in the room. This is due to the fact that a leaders role is to represent the company in the best suitable way, and therefore they need to demonstrate that they agree with their company, and ensure that employees stay motivated and engaged in their daily work. 5.2 Traditional approaches for change leadership In this section I will introduce and discuss traditional recommendations for change leadership. I have chosen to emphasize Carnall s argumentation for effective management, as well as Balestracci s identification of five essential skills when leading change. I will compare these skills to Scanoil s leadership profile from their company handbook. Carnall argues that in order to obtain an effective and successful change process one has to fulfill three main categorizations. I find these categorizations highly relevant for Scanoil s change process and therefore I will emphasize it in a more specific manner. Additionally, Balestracci s identification of several skills for leading change is essential when looking at leader s adjustment in behavior and leadership style during the change process Managing transitions effectively As aforementioned, Scanoil did not decide to initiate and implement PACE as a direct consequence to the crisis, but before. This does, however, not mean that the program was not connected to the crisis. It was a consequence of the detection of the need for being more effective in an increasingly tougher and more difficult industrial climate, at an early stage of the changes that eventually lead to the crisis. Consequently, compared to their competitors, Scanoil had the ability to respond quickly when the crisis manifested itself. In order for a 64

70 CHAPTER 5. DISCUSSION company to stay relevant, it is essential to respond quickly to changes, especially since transformations has escalated during the recent years. Since PACE was already initiated, the conditions were facilitated for Scanoil to respond quickly. This was beneficial for the company when the crisis actually occurred due to their quick adaption, as well as the fact that stakeholders, investors, employees etc. had already been informed and started to acknowledge that things were changing rapidly. Additionally, leaders were able to identify with the change process before the crisis actually hit the industry, which is generally considered beneficial, as they were one step ahead of their competitors. However, as Scanoil s top-management held back important information with regards to restructuring and downsizing the company, leading change was hard in the beginning. In addition to this, their lack of training before leading change might have affected their change process negatively Dealing with organizational cultures Scanoil consists of a diverse organizational culture, and these differ in how they react to changes in the organization. As mentioned earlier, there have been some difficulties for leaders in relation to different generations as well as the differences between international and Norwegian employees. First of all, the information flow has been of varying degree and there have been difficulties in dealing with two different parties. The older generation can be characterized by distress, which again has affected leaders daily work routines, since much of their time has been dedicated to securing that this generation of employees receive as much follow-up and information as possible. Additionally, there are also some differences between diverse cultures. The Norwegian culture have demanded more from their leaders than what they normally do, which have forced leaders to be more visible, understanding, express loyalty etc. Leaders agreed upon the need for repeating messages over and over again. Leaders communicating consistency demonstrates availability and willingness to disclose information. However, when a company is struck by such severe changes, there will be employees questioning the actions of the company, and it is up to each individual leader to decide what information to reveal or not. 65

71 CHAPTER 5. DISCUSSION Managing organizational politics Carnall argues that during a change process leaders have the ability to develop skills within utilizing and recognizing political tactics such as building coalitions (Cameron & Green, 2012; 139). As part of the change process, leaders have developed diverse change teams, which in collaboration with leaders work in order to establish a sustainable change process. In this manner, leaders have ability to build coalitions and establish some sort of controlling. Additionally, leaders mentioned that this process has been beneficial since they have had the possibility to use employees that respond positively to changes, and that can work as a change agent during the process Balestracci s five essential skills when managing a change process Furthermore, I would like to emphasize Balestracci s identification of five essential skills when managing a change process, and comparing these skills with my findings. Self-awareness, generally leaders in Scanoil are perceived as relatively self-aware. One leader argued that even though he might not agree with all the changes and decisions management in Scanoil has taken, he committed to a physiological contract which emphasizes on believing that what Scanoil is doing, is the right way for the company. A leaders job is to stand by the company, even though you might desperately want to agree with your colleagues. Emotional maturity, Scanoil s leaders can be perceived as emotional mature, as they are aware of how changes in a company can affect their employees. They understand that there are uncertainty in the company, and that people fear for their jobs. One leader even argued that she thought it was difficult in many situations to argue for something she did not really believe in herself. However, the job as a leader is to maintain positive and motivated during a change process, and to express a deep engagement and concern for your employees during a change process. Self-motivation, many of the leaders in Scanoil has looked at PACE as a motivating initiative, where they can do something good for the company and develop their own goals within a challenging change initiative. Mainly, they have argued that they have looked at PACE as 66

72 CHAPTER 5. DISCUSSION something positive for the company, and a way to make their corporation more sustainable for the future. The ability to show empathy, thus, in this context, one leader expresses so honestly, that many of his employees might experience him as very hard and strict, and concerned for the company. However, when it comes to his employees, he had a deep empathy for them, and was always concerned about their feelings. Hence, he argued that in order to be perceived as an authoritative leader-figure, he exercised a strict leadership-style. However, when there were situations that required deep empathy, he delivered. During the research process, I had many indicators pointing towards leaders caring for their employees, and wanting them the best. The ability to develop and maintain a positive relationship, during this research it has become knowledgeable that all the leaders are concerned about their employees, and therefore there is a huge focus on maintaining positive relationships between each individual. There is a need for close communication between each individual, there is a need for fun and laughs, and lastly there is need for open and honest communication between leaders and their employees during this critical situation. 5.3 Summary In this chapter I have identified the main challenges Scanoil s leaders are facing during the oil-crisis and the implementation of PACE. The findings were discussed based on Carnall (1990) model for effective change management. Additionally I also looked at Balestracci s (2003) identification of five important characteristics when leading change. Throughout the discussion it remained clear to me that leaders in Scanoil have experienced some clear difficulties in relation to leading their employees throughout a change process with minimum information available. The company was quick at reacting towards the changes in the industry. However, openness is something top-management could have been better at; although I think many corporations are suffering from the same challenges, as it is doubtful that one will ever experience a management that revels all information available. However, the management team seemed to have learned something throughout the process, since many of the leaders argued that the information process have been improved in some degree. 67

73 CHAPTER 5. DISCUSSION As noted in the literature review, the goal of effective change leadership is to deal with different organizational cultures in addition to managing organizational politics. My belief, and the basis for this thesis, is that with the new strategy and work-culture the company was forced to adapt to a new culture, which focuses more on costs-efficiency than earlier, and this should be incorporated as part of the PACE initiative. As have become evident during the research, leaders are struggling to implement a new culture as a part of the change process. Further, these efforts have been challenging as many employees have struggled with accepting that there is a need for change. Finally, it has throughout the research become quite clearly to me that the leaders have struggled in their efforts of implementing PACE. Not only did the top management do a somewhat poor job in the early stages of the implementation, when they failed to offer workshops, training and information through clear communication to the leaders in Drilling & Well. The leaders were also left on their own, squeezed somewhere in between a demanding and absent top management and an uncertain and worried group of employees. In this space, the leaders have seemingly been left to themselves when it comes to how they best can motivate and engage their employees, in order to achieve the goals that the implementation of PACE was to provide. Because of such conditions, it is obvious that there is a great likeliness of having to make adjustments in how to lead employees. Rooted in how the relationship between leaders and employees used to be, and how the expectations towards the leaders were affected by the new situation in the company, an adjustment in the leaders behavior was seemingly inevitable. What kind of knowledge that can be extracted from the analysis and the discussion, is thus the next subject for the thesis. The last chapter will first of all serve as a review where I answer my research question. Moreover, I will explain and justify this answer, before I discuss the conclusion further. Finally, I shall supply some managerial recommendations for how companies can ensure a positive change process, for leaders, their employees and the company as a whole, rooted in what the research has taught me. Lastly, I conclude by offering some critical reflections and limitations of this research project. 68

74 Chapter 6 -CONCLUSION, MANAGERIAL RECOMMENDATIONS & LIMITATIONS Chapter 6 -CONCLUSION, MANAGERIAL RECOMMENDATIONS & LIMITATIONS 6.0 Conclusion, managerial recommendations & limitations My research question was: Have leaders in Scanoil been forced to adjust their leadership-style and behavior as a consequence of the on-going crisis within the Norwegian oil- and gas industry? And further, how has the process of implementing PACE influenced the way leaders lead? The main issue of this study was to investigate and examine how a business-related change process affects leadership within a company. My argument was that the emergence of the oilcrisis has brought with it new challenges as well as possibilities for change leadership. The purpose of the research was to explore whether the changes in Scanoil have forced leaders to adjust their leadership-style and behavior, or not, and if the process of initiating PACE has influenced the way leaders lead. The research project is rooted in- and based on existing theories on the topics of change leadership, organizational change, employee s potential resistance to change, and different leadership roles, in particular. For the analysis I have examined one company within the oil and gas industry in Norway, namely Scanoil. By assessing interviews with leaders in Scanoil I was able to reveal differences in their approaches. The lessons learned by this research has been the basis for my final proposition and recommendations, which will be outlined shortly, on how leaders in Scanoil can use their leadership role more prudently when dealing with changes. The last chapter will start by presenting my main findings and conclusions drawn from the analysis. Secondly, it will provide a proposition including managerial recommendations on how Scanoil can use the change process more positively, and thus how they can assess leaders even more effectively in order to ensure a good change process. Lastly, limitations and critical 69

75 Chapter 6 -CONCLUSION, MANAGERIAL RECOMMENDATIONS & LIMITATIONS reflections associated with this thesis and research process will be emphasized, and finally propose some suggestions for further research within this field. 6.1 Conclusion of results In order to conduct the research, I chose one company within the Norwegian oil- and gas industry, which is undergoing major changes due to the ongoing crisis in the sector. Based on the findings from my case analysis, together with the discourse analysis and discussion, I will present the main findings and conclusions that I have drawn, related to each of the leaders behavioral differences during the crisis situation. Kotter (2012) argues that successful transformation is 70-90% leadership, and 10-30% management (Kotter, 2012:26). In other words, successful transformation is not just based on responding quickly to adaptions, or utilizing the right tool, it is related to how leaders are able to utilize their role when leading change. However, as we have seen throughout the research, top management have contributed to withhold information and thus made the change process more challenging for leaders, than what it could have been. In order for the company to gain the best effects in the aftermath of a crisis situation, it is a prerequisite that the communication flows better, and that the company focuses on two-way communication, aimed at involving leaders more effectively, rather than holding back important information. As aforementioned, leaders are dependent on good information processes in order to ensure that the company achieves the results, which a good changing process potentially can facilitate. For top management, it is important to acknowledge that employees often holds more information and knowledge, than one often would expect. The increased flow of online information, has contributed to making employees, as well as stakeholders and investors, more enlightened. By than holding back information, topmanagement risks that trust and other influents worsen employees motivation and relation towards their superiors within the organization. Such conditions, does not only make it more difficult to achieve pinned out goals, but also makes it more difficult for leaders to motivate and engage their employees during change processes, which consequently might force leaders to change and adjust how they work and lead. 70

76 Chapter 6 -CONCLUSION, MANAGERIAL RECOMMENDATIONS & LIMITATIONS Overall, one can say that PACE mainly is dedicated towards reducing costs. Hence, this transformation has required leaders to motivate employees to obtain this goal, in addition to finding better solutions for the future. Thus, even though the company has been through several change processes earlier, I got the impression that leaders in Scanoil had been struggling with getting their employees to really see the actual consequences of the crisis. As one leader pointed out, we have to see the seriousness in this change process, because this is the future. However, as the entire industry has been forced to downsize their staff and reduce their activity-level, it has become clearer for everyone how severe this crisis actually is. Conversely, these issues are more related to an overall perspective. Therefore, I wanted to see how it affected the role as a leader. While examining how a change process affected the leadership role, it became evident that leadership is not necessarily a unique definition; leaders are employees with the same feelings of fear and anger. However, they have to react differently to the changes due to their role as front-figures. Throughout the first period after the crisis situation hit the oil-industry, leaders have dedicated a lot of time communicating with employees, stakeholders, investors etc. on what they expect for the future, how their company is changing, and how this will affect others in the industry. Additionally, decisions in relation to PACE and the oil crisis are taken by top-management, which again requires leaders who are loyal to these solutions and demands, even though they might not agree with them. Hence, as one leader explained, changing their work culture from being time-sensitive, to suddenly only caring about costs has been highly demanding to understand for themselves, and to convey to employees. Moreover, with a demand to reduce costs by 25 % it requires leaders that can turn and bend on every penny in order to find new and less costly methods. It requires more effective work with fewer personnel to do the assignments. This, again, causes less time spent on other important assignments, and worst-case scenarios are that some tasks might even be put aside. Compared to before, leaders are now forced to dedicate a lot of their time on employees, and at the same time they are to ensure that their assignments are completed, and that they perform as expected by the company. They have to think differently in order to survive with fewer personnel, and utilize their work craft more effectively. 71

77 Chapter 6 -CONCLUSION, MANAGERIAL RECOMMENDATIONS & LIMITATIONS Finally, the majority of the leaders find PACE motivating, and a possibility to look forward without focusing entirely on the bad conditions in the industry. Media is according to some exaggerating the industry s future, drawing a picture that says that there will be more downsizing and restructuring into the future. Therefore, PACE can be a possibility to look away from these catastrophic predictions and work towards a more sustainable future. As a conclusion to the aforementioned, the findings are quite clearly, and not surprisingly, showing that leaders have been forced to adjust and change their leadership style and behavior. Even though there might be several reasons for having to change, the findings in the research shows that the ongoing crisis and the implementation of PACE have undoubtedly been catalysts, forcing leaders to change. Further, this has been made visible by many factors. Firstly, the repercussions of the implementation through both poor communication from above, but also from tougher conditions with strict demands and fewer resources available, in addition to skepticism and neediness from the employees, has created an environment that for most of the leaders I have interviewed, is entirely new. In order to adapt to such conditions, leaders was additionally not offered adequate training and workshops before it might have been too late. Consequently, to be able to meet such difficulties, the leaders did not have any other choice, than to adapt to the new surroundings. Secondly, the ongoing crisis and the implementation of PACE have not only created a need for change. It has in fact, at least according to the findings based on the conducted interviews, resulted in concrete changes in how leaders lead and behave. As a result of the backdrop characterized by uncertainty and insecurity the crisis creates, employees have demanded that their leaders make themselves more available, more flexible and less distant in the everyday business. Judging by the answers from the interviews, leaders have in fact adjusted themselves to such demands. Several of the quotes and revealed findings presented in the analysis confirms this, or at least that the leaders have an impression of this. Further, as a result of crisis and the new status quo it has brought with it, the lack of communication from above has forced leaders to be clearer and more active in their leadership roles, especially when it comes to guiding and informing their employees. The startup of new routines of everyday meetings, as well as the informal establishment of a lower threshold between leaders and employees, serves as good examples of this claim. Such changes from the leaders side, 72

78 Chapter 6 -CONCLUSION, MANAGERIAL RECOMMENDATIONS & LIMITATIONS which attempts to accommodate the need and desires from their employees of building a safer and more transparent relationship, can not be seen as any other thing than clear signs of leaders trying to change and adapt. A third and final example, is found in how the leaders themselves have been struggling to adapt to the changes in the same way as the employees have. In order to lead their employees towards the goals set out by PACE, the leaders have had to deal with the same forms of resistance as they find among their employees. At the same time, they have also had to adjust their techniques and styles of leading, in order to convince and withdraw the best from their employees. Several of the leaders I interviewed, expressed that they themselves have felt the uncertainty and skepticism towards the changes, and this has brought them to adapt to the new reality, in order to reach the overarching goals. Additionally, the leaders have recognized that in order to succeed, they would have to make certain changes, especially culturally in the office. In this manner, the consequence of the crisis and the implementation of PACE, has been that the leaders in Scanoil did not only have to change, they did in fact make several adjustments and changes in their style and leadership. As a conclusion to the aforementioned, it is reasonable to say that even though changes might have been necessary, with or without the crisis that characterizes the Norwegian oil- and gas industry. Based on the answers the leaders I have interviewed offered, the leaders in Drilling & Well did not only have to change during the implementation of PACE, they have in fact also changed to some degree in how they lead. Even though the interviews only include a very small group of leaders in the company, and their answers can not be used to generalize or conclude on behalf of all leaders in Scanoil, the answers provided by the sources I had were unambiguous enough to at least portray a certain picture of how the change process have influenced leaders in Scanoil. 73

79 Chapter 6 -CONCLUSION, MANAGERIAL RECOMMENDATIONS & LIMITATIONS 6.2 Managerial recommendations how to survive as a leader during transformation Theories have tried to come up with some advice on how to best lead during change, and how effective change leadership should be assessed. However, it is important to acknowledge that no change processes are alike, and therefore there is actually no determined way to emphasize changes. However, one has to adapt to its company and its position, and utilize their qualities in the right way. This section will provide some recommendations on how leaders can look at a change process as something positive, and utilize it as a communication tool, in order to ensure motivation, engagement and trust among employees. First, despite all efforts on how to best initiate a change process, the basic rule for change is communication. The crisis should have been handled with accurate, honest and open information about the change process from the beginning. This process is first of all dedicated to top-management and their assignment to convey this information onto leaders in the company. Second, do not wait until late in the change processes before you acknowledge that you have handled the changes insufficiently. Scanoil failed to involve their leaders early in the change process, which challenged PACE due to a lack of information about how and why things were changing. Employees in Scanoil did not recognize the need for change before after the crisis hit the entire industry. First when employees from the sector lost their jobs did they realize why there was a dire need for change. Leaders can be perceived as effective tools when initiating a change process, because of their role in the company. First of all, they have a strong connection to their employees, and in addition they are dedicated to working in the spirit of the company s best intentions. According to Caldwell (2002), leaders can be regarded as change agents, which facilitates for change. He/She helps the sponsor and the implementers stay aligned with each other. The change agent acts as data gatherer, educator, advisor, meeting facilitator and coach. Leaders are thus to represent the voices from below, and use these messages when collaborating with top-management. Companies should strive to become more open. Further, especially when undergoing an organizational crisis, companies should also aim at being a source of useful information for their leaders and employees. For example, can there be established a workstation between top-management and leaders in the 74

80 Chapter 6 -CONCLUSION, MANAGERIAL RECOMMENDATIONS & LIMITATIONS company. Creating a blog, twitter account or Facebook page, where they can share important information that needs to be conveyed, could for example help the company reaching such goals. By establishing an open environment, where a dialogue that allows employees to share their thoughts about the crisis situation, opens up for a more effective change process. By engaging leaders to enhance information and assess employees in the right way, it might be easier for companies to ensure that leaders adapt to changing conditions. Third, globalization and technological development creates an economic climate that makes it necessary for companies to be aware that changing conditions should always be prepared for. It is easier to control a change process if leaders and employees have been through workshops in relation to change processes in advance. Additionally, this can be used as an arena for listening and sharing experiences that can be used as a source of knowledge in a potential and futuristic crisis situation. Instead of avoiding criticism, one should open up for criticism during these workshops, and share experiences on what tools that are effective during a transformation. Also, educating line-leaders that have recently been promoted as leaders in leading change is extremely important. Change processes are intended to ensure that corporations survive. If leaders do not succeed during such processes, there is a possibility of not surviving. Therefore, top-management has to prioritize educating leaders in how to best initiate and manage change processes. In this manner, establishing change groups, as Scanoil has implemented, can be extremely useful, given that the teams are based upon employees and leaders that can work as change agents, which look at the changes as a possibility rather than something negative. Forth, companies should prepare their leaders on the fact that change processes are not always a walk in the park, and that they have to perform in accordance with some demands that they may not agree with. Leaders need to be prepared for the abilities they have as leaders, since they are representatives for the company. Fifth, leaders should never underestimate employee s resistance to change. As I have already mentioned, employees diverge in how they manage changing conditions. Fear spreads as wildfire, and it is thus important for leaders to monitor their peers closely and communicate honestly and openly. Based on my research, this is something leaders have struggled with in 75

81 Chapter 6 -CONCLUSION, MANAGERIAL RECOMMENDATIONS & LIMITATIONS particular, due to lack of information in relation to downsizing and restructuring. The process of implementing PACE and changing the work-culture is one thing, but when the change initiative is connected to downsizing, it is hard for employees to maintain positive, especially with lack of information. However, it is hard to blame leaders for this entirely, since they are suffering from the same lack of information as their employees. However, as a recommendation for other companies, it is never wise to withhold information, because it might backfire, and you may end up hurting yourself. This takes me to my next recommendation, which is that change processes should be utilized as a means to involve and establish a secure work-environment. During the research, it became clear that daily meetings with employees contributed to hold the entire company together. During these meetings, employees got to share information and discuss with their peers in relation to the ongoing crisis, and at the same time, their leaders were visible, open and honest in the best possible way with regards to information about current situation, and futuristic prospect. Even though leaders did not have all the answers, they told people what they knew, and that they would eventually look into their questions and come back to them as soon as possible. Finally, it is worth mentioning that initiating a change program similar to what Scanoil presented when they introduced PACE, can be beneficial for a company. Mainly because it takes the focus away from the crisis situation, and gives employees and leaders the possibility to look for potential solutions in relation to development, through change groups, and in this way build a sustainable company for the future. Further, change programs can contribute to detect organizational challenges, problems or latent conflicts. Regardless of their origin or potentially relation to communication, routines or hierarchical arrangements, change programs have the abilities to create an open environment where such challenges not only can be detected, but also discussed and possibly solved. 6.3 Limitations Before finalizing the paper, it should be acknowledged that this study has its limitations. First, my sample size is relatively small as aforementioned, and only based on one single industry, which makes it hard to generalize to other industries in other parts of the world. Additionally, 76

82 Chapter 6 -CONCLUSION, MANAGERIAL RECOMMENDATIONS & LIMITATIONS the study is also centered on one single company, which can also make it difficult to generalize the findings onto other companies. However, as it is dedicated to change leadership, one can draw some correlations between each industry. This also goes for companies, especially those undergoing comprehensive change processes. Secondly, I could have based the research on more leaders in Scanoil. However, in order to get permission to do research in Scanoil, the company chose the selection of participants. Additionally, it is also worth mentioning that since the oil-industry is suffering such a severe crisis situation it was hard to get to collaborate with companies in Norway. The ideal research would probably have been to conduct interviews with different leaders in for example three different oil-companies. But unfortunately I did not have enough resources for this research to do this. Furthermore, I could also have based my research towards employees. It could also have been of interest if I could interview employees in order to add their viewpoints and impressions to the research of how leaders are affected by the changes. However, I tried to get to interview/conduct a survey in relation to employees, but this was difficult in relation to the crisis situation the company was suffering. Another limitation I have recognized relates to the fact that I have only based my analysis on 8 leaders in Scanoil, which makes it difficult to draw clear conclusions. All discussion and analysis completed is based on the reflections of 8 leaders, while the company consists of far more leaders. Adding more leaders to the research, could possibly have affected my findings and conclusions. Nevertheless, I have chosen to conduct the interviews with different leaders from different units, but within the same department. In this manner, I feel that I have been able to scale down the company. The fact that I got to interview different leaders from different units, made it possible to collect data from different levels of the department. Even though the answers differed when it came to how leaders reflected upon the changes, all of the leaders answered in a manner that made it possible for me to offer a clear conclusion to the research question. Another limitation I would like to mention is the easiness of becoming biased while interpreting and drawing conclusions from my research findings. I have been aware of this throughout the entire process, and in this matter tried my best not to become biased, although 77

83 Chapter 6 -CONCLUSION, MANAGERIAL RECOMMENDATIONS & LIMITATIONS seeing that this is a qualitative analysis based on interpreted data it is hard to not be in some extent. Furthermore, the fact that I have been entirely alone for this research, although I have had some help reading through the thesis, this may have affected my research. Further, one could point to the fact that having to work under strict restrictions from the company could also be characterized as a limitation as well. As a consequence to Scanoil s restrictions, I had to develop fictive names for both the company, and the efficiency program, in order to be allowed to interview and use the company as my source throughout the research. The potential limitation that might have been advocated by this direction from the company is that I, as a researcher, have been forced to hold back some information that could have given strength and more validity to my thesis. This issue has also been elaborated in chapter 3. Finally, I would also like to point out that the topic chosen for my thesis, namely leading change, may have been a bit difficult to examine in such a research project, with it is limitations, both in regards of time, space and resources. It would most definitely have been more difficult to examine with a quantitative methodological approach, and it was natural for me to choose a qualitative approach. However, the topic leading change is quite difficult for leaders to define and comprehend in a theoretical context. Nevertheless, it was easy for them to reflect upon the changes, and how they were affecting them, so my findings should not be affected by this problem, even though the starting point were difficult in the light of the somewhat mysterious topic. Thus, for future research on this topic I would like to suggest using larger sample sizes, from more diverse industries and from other parts of the world, this to see if there for example are differences in how Norwegian leaders/international leaders differs in the way they look at change leadership. Secondly, it would be interesting to investigate the difference between how leaders and employees look at the changes the company is facing, and whether there exists any distinct differences in the success of recovering. Finally, it could be interesting to take use of other methods of data collection, e.g. surveys, different forms of interviews, etc. to improve the richness of the data. 78

84 REFERENCES REFERENCES Aitken, Paul & Higgs, Malcolm (2012) Developing Change Leaders The principles and practices of change leadership development. Routledge; 1 edition (1 July 2009) Andrews, Matthew, McConnell, Jesse & Wescott, Alison (2010) Development as Leadershipled Change A report for the Global Leadership Initiative. World Bank Publications Baesu, Camilla & Bejinaru, Ruxandra (2013) Leadership approaches regarding the organizational change. The USV annals of economics and public administration, vol. 13. Bass, Bernard M. (2006) Transformational leadership. Mahwah Lawrence Erlbaum Associates; 2006 Beerel, Annabel (2009) Leadership and Change Management. Sage Publications Ltd. Caldwell, Raymond (2003) Change leaders and change managers: different or complementary? Leadership & Organization Development Journal, Vol. 24 Cameron, Esther & Green, Mike (2012) Making Sense of Change Management: A complete Guide to the Models Tools and Techniques of Organizational Change. London: Kogan Page Daymon, Christine & Holloway, Immy (2010) Qualitative Research Methods in Public Relations and Marketing Communications (2 nd Edition). London: Routledge Flick, Uwe (2007) Designing Qualitative Research. Sage Qualitative Research Kit. Sage Publications Ltd. Graetz, Fiona (2000) Strategic change leadership. Management Decision, Vol

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86 REFERENCES Pinnow, Daniel F. (2011) Systemic Leadership or: Designing a World That Others Want to Be Part Of. Springer Berlin Heidelberg Scharmer, C. Otto (2009) Theory U Leading from the Future as It Emerges. Berrett-Koehler Publishers; 2009 Senior, Barbara & Freming, Jocelyn (2005) Organizational Change. Pearson Education; 2005 Suada, Penava & Szevad Sehic (2014) The relevance of transformational leadership in shaping employees attitudes towards organizational change. Economic Annals, vol. 59. Vinger, Gift & Cilliers, Frans (2006) Effective Transformational Leadership Behaviours For Managing Change. SA Journal of Human Resource Management, 2006, 4 (2), 1-9 Prentice Hall. Wengraf, Tom (2001) Qualitative Research Interviewing. Sage Publications, Inc. Webpages Yukl, Gary (2006) Leadership in organization (6th ed.) Upper Saddle rover, NJ: Pearson

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88 Appendix 1. Appendix 1. Interview guide Introduction The purpose of this interview is to reflect upon the changes that your corporation is suffering from in relation to the oil-and-gas crisis situation. First I will ask some introduction question in order for you to reflect upon the subject of matter. Thereafter we will look closer at the process of implementing PACE, and how the changes have affected your role as a leader. Demography - Role - Education - Years of experience Background for research - How do you feel about the changes in the industry? - In what way are the changes affecting your company? Leading Change - Have there been changes in your organization, and how have you been experiencing these changes? - What is the desired change with your change program PACE? - Who has participated and contributed in the decision process to act upon the change? - Did you as a leader obtain information about the goal of the change? How were you involved? - What is your role in the process of implementing PACE? - Where you offered help/training in leading change? - Do you have any formal competence or previous experience within change management? - How do you feel your competitors/peers are managing the changes good or bad? - Which factors do you consider difficult when implementing PACE? 83

89 Appendix 1. Leadership behavior - Have the changes affected your role as a leader? In what way? - Are there any key changes in leadership behavior? - Are there any parts of your leadership style you did not feel was compatible with the needed changes? - What leadership characteristics do you think is necessary when implementing PACE? - Have you made any reflections/learning during the change process? Debriefing I have no further questions. Is there anything else you would like to bring up, or ask about, before we finish the interview? Thank you so much for participating. 84

90 Appendix 2. Appendix 2. Transcribed interview Demography - Role Leader for unit; mobile rigs - Education Engineer - Years of experience 17 years in Scanoil Background for research - How do you feel about the changes in the industry? Changes is something you have relate to, in many ways it is positive, because there is a larger focus on costs and efficiency, and which way the company is heading as a company, but also as a culture. The problem is, however, that often when things goes well, the company is swimming in opportunities, and this leads to an un-culture where there is no/not the same focus on costs and efficiency. Therefore the changes in the industry make it possible to focus in a completely different way than before. It gives you some sort of a drive. - In what way are the changes affecting your company? Interviewer: We have talked about a little bit above you mentioned costs and efficiency. Interview object: Yes, it is mostly about savings costs, gaining efficiency, and there is a lot of different ways to do this. Leading Change - Have there been changes in your organization, and how have you been experiencing these changes? Ehhhh, the changes hits you in different levels, the main objective however, is costs down, efficiency up. However, there are various efforts across the boards, we attack, large and small. And when you asked about how I have been experiencing these 85

91 Appendix 2. changes it is related to downsizing, cuts in meetings, travelling, courses, consultants etc. Which means more work on the other employees. In my unit we have implemented several efforts to gain efficiency, for example standardizing well solutions, working on making less risky assignments, which means that we can reach our goal the first time. We are also pushing suppliers to deliver cheaper solutions, and also working with less employees on rigs etc. However, these efforts are hard get running, easy to talk about, harder to implement. - What is the desired change with your change program (PACE)? Interviewer: You have already talked a lot about the desired change, but can you amplify this even more? Interview object: It is mostly about cutting costs by each well. This is what we work to achieve, talks about and plan for. - Who has participated and contributed in the decision process to act upon the change? PACE is a top-down initiative, which means that all messages come from above. The main heading comes from the top in relation to the change-process. Within these main heading my unit and other units have the some maneuver, in relation to how we can solve problems and assignments. Before the projects that was initiated sometimes gave to much maneuver, which did not lead to many results. Therefore it is highly important for us to communicate clearer in relation to the task, but also to communicate what is expected. Therefore there are fewer maneuvers than earlier, however employees have the ability to develop something as a front-runner, however if that does not work we have to tell them how they are supposed to do it. - Did you as a leader obtain information about the goal of the change? How were you involved? As mentioned before this initiative is a top-down approach. However, there has been communicated good information. We get information-packages which builds upon the change program. Also we get a big help from the media, because they are pointing towards the change process and therefore employees get a bigger understanding of the 86

92 Appendix 2. need for change. However, it was harder before this was communicated external, because than people did not understand why we were supposed to change. The oil prices had not lowered, and employees did not understand why we were not making money. Therefore as the media got a hand on the situation, things got a lot easier, because people understood more, and at the same time, many companies are experiencing exactly the same as Scanoil. - What is your role in the process of implementing PACE? I am leading my sector, and have a responsibility to lead and implemented this on the projects that I am responsible for. I have to make sure that PACE becomes a part of our projects and gets implemented in accordance with PACE. - Where you offered help/training in leading change? Yes, we had some workshops. Me: And did you feel that those meetings helped during the change process? Him: Yes, it is good with some reflections with other leaders during change processes. Especially since I am a technician, and therefore leading changes is not exactly my area of expertise. Therefore it has been good to talk and reflect with others, and we have spent a lot of time in my leader-team discussing these matters. - Do you have any formal competence or previous experience within change management? I have been through changes processes before, but not to such a degree as now. I have experienced both changes that have failed but also succeeded. However, I value leaders that can make the change to something positive. - How do you feel your competitors/peers are managing the changes good or bad? Hmmm (pause) both good and bad (laughs), I do not think we are especially good at it. I think we got be better at dealing with changes. Some are good and succeeds with this, but others have more demanding leadership-style and therefore it is more 87

93 Appendix 2. challenging for them to succeed with changes. - Which factors do you consider difficult when implementing PACE? Interviewer: Are any factors that are harder to implement than others? Interview object: Hmm, make things happen, it is one thing to talk about, but its another thing to develop engagement, motivation, make things happen, move, it is a demanding change process. Sometimes, you achieve, and things go by themselves, results, than we can just move on. However, its demanding when things do not happen, and they takes longer time than expected, then it is important as a leader to become more clear/specific, and worker closer with your peers to get them involved in the process. This can be challenging, because people still resist do these changes and rationalize the problems. This is hard because they do not have the ability to do things, and therefore it is important for me as e leader to communicate with these, and manages to take those difficult conversations. Leadership behavior - Have the changes affected your role as a leader? In what way? I think that when a company suffers from such a challenging change process as we are going through today, it is important for leaders to become more apparent and specific especially in relation to what you communicate. We have to become even closer to the employees, follow closely on projects, and demand every day to get things to happen. Verify that things are communicated understandable. If people go back to where we were, than things do not change. It is positive with changes, more challenging, but I think it is important to change your leadership-style. - Are there any key changes in leadership behavior? Follower your peers closer, be a role model. - Are there any parts of your leadership style you did not feel was compatible with the needed changes? Hmm.. that must be as mentioned before that I am an engineer, and does not have 88

94 Appendix 2. those skills developed to lead during change. - What leadership characteristics do you think is necessary when implementing PACE? We have some typical leadership characteristics that have been communicated from above that it is important to abide. Those are; willpower, will to accomplish, discipline, take responsibility. Also it is important to talk about the changes, in order for employees to get a positive attitude towards the change. If something is supposed to change, we have to want to change. Employees have to have willpower, and that is something that a leader cannot give them, thus they have to chase it themselves. They have to have the confidence that we can cut costs, but with no ambitions, we cant change at all. - Have you made any reflections/learning during the change process? Hmm, it surprises me that we did not see the possibilities to change/adapt earlier. Also, I think we are standing above many challenges, and that we have not reached the most important/hard step yet. 89

95 Appendix 2. TRANSCRIBED INTERVIEW Interview Demography - Role: HR Manager Drilling & Well - Education: Master in Social Scientist - Years of experience: 10 years experience as management consultant in Exenture, 10 years in Scanoil Background for research - Interviewer: How do you feel about the changes in the industry overall? Interview subject: The cycles goes up and down, and we have been experiencing it before as well. The challenges however, are the large costs-savings, which means when things are turning in the industry and we are experiencing a downturn, there are things to loose, in that can be quit intense in downturns. - Interviewer: In what way are the changes affecting your company? Interview subject: The consequences are huge for the marked, however the changes are not quit as dramatic for Scanoil as it is for the supplier-industry. We have the possibility to take small breaks. The changes affect the company over a longer period of time, with less dramatic changes, than other companies. Scanoil has a good position in the marked, and therefore we are prepared for changes, and also careful considering the consequences the company can suffer if they do not think long-term. Leading Change - Interviewer: Have there been changes in your organization, and how have you been experiencing these changes? Interview subject: Yes, there have been some changes. For example we started an reorganization about a year ago in Drilling & well. This was done to gather our products from a geographical organization to a more functional organization. Also we initiated an efficiency-program, which is designed to increase efficiency, with more focus on resolutions, also resolutions we do not like on behalf of Scanoil, and not our 90

96 Appendix 2. own units. - Interviewer: What is the desired change with your change program (PACE)? Interview subject: Our efficiency program is called PACE and is developed to increase our efficiency and our resources. Which means, if the activity level is stable, we use our employees and a limited amount of money. If the activity level is lower, as it is today, we are supposed to work with less resource, which means fewer employees, and less money. However, efficiency does not necessarily involve downsizing. It is more about, how to handle redundancy? - Interviewer: Who has participated and contributed in the decision process to act upon the change? Interview subject: The process of initiating PACE comes from top-management, and therefore it has been a top-down process, but they have also been dependent on engagement and involvement from other employees. This process required a top-down process, because of the need for clear messages. However, until now there has not been much involvement in the process from other, just awareness. Top-management has communicated the change process to middle-leaders and first-line leaders. - Interviewer: Did you as a leader obtain information about the goal of the change? How were you involved? Interview subject: The goals were set by top-management, and thereby communicated to middle-leaders on how to handle these changes to reach the top goal. It is highly important for management to communicate the vision with the change process. If there is not a good strategy for how to organize and implement, it will be hard for employees to process. Everything has to be prioritized, and therefore topmanagement is important, since they have the ability to set these clear lines and communicate, and give employees maneuver to process and handle the new vision. Independence is highly important in such a process, and the ability to act. - Interviewer: What is your role in the process of implementing PACE? Interview subject: HR is supposed to make sure that the message is understood, and 91

97 Appendix 2. that employees have a clear understanding of the direction the company is entering, this is particularly challenging. Especially since we could have done so much more if we were more people. Adherence, if we are in a downsizing process, we need to play by the rules, and comply and act upon these. Compliance underlines everything. - Interviewer: Where you offered help/training in leading change? Interview subject: Yes, or we developed a leading for change/leading in change concern program on a disciplinary level. However, this has been quite challenging. Since leaders often want a complete guide on how to handle changes, and we knew that it would be hard to be too detailed and also there is no recipient for change. However, it is important to give some guidelines for leaders and employees. Leaders need to be close to their employees during this process, and communicate, and acknowledge formal demands according to staff requirements, employment, and how much one can juggle an employee from one part of the unit to another. Leaders are also tutored about how to handle a difficult conversation. They have the ability to practice on how to handle these difficult situations. And we can guide them on what they can say, and what they shouldn t say. However, this training is not enough to handle a change process, it is up to each leader to develop their leadership style on how to handle these drastic changes. The company requires leaders to be present. For example on onshore facilities leaders are required to be presence 10 hours everyday, and there are 10 teams in the field. - Interviewer: How do you feel your competitors/peers are managing the changes good or bad? Interview subject: This is very varied, depending on where you are in the organization. For example the development production team in Norway, which stands for most of the production has been through many change processes before. So they have an attitude towards the change like; This will pass through, we been here before and everything went back to normal. How can these employees handle changes? We know that the costs are to high, and we have to lower them. The change process can be understood as some sort of a blaming game the supplier industry is blaming our company for their downsizing process. But who has the responsibilities for costs? The 92

98 Appendix 2. answer lies in the whole oil-industry and not just one company. First-line leaders have never been through a change process before, and therefore they are inexperienced when it comes to leading through changes. How can we create engagement even though times are bad, and still manage to work? We have to be able to motivate and create engagement, but communicate during a difficult situation. One can see it as a negative spiral. - Interviewer: Which factors do you consider difficult when implementing PACE? Interview subject: It is particularly hard since there is so much uncertainty around the future, and we do not know exactly how much we can give/take. And sometimes I think that our change program can be considered as short-term based. On my unit Drilling & Well employees are very good at delivering, when something is supposed to be done, they run. However, I think they are struggling with the fact that they want to drill more and be even more effective, but money stops them from doing this. And since it is another unit, who handles the economy, and they want to cut, than we cannot do anything about it. These issues stop the process, and we have to reorganize staff, stop contracts and so on. Many decisions are short-term because we do not know enough. So the main challenge with the change program is actually the uncertainty. Leadership behavior - Interviewer: Have the changes affected your role as a leader? In what way? Interview subject: The changes affects you as a leader, one become more focused on handling the changes fast. You have to think long-term with unknown factors and adapt quickly to changes. We have to become better at understanding what s at the bottom and how can we adapt to these uncertainties? The leader has to communicate the facts. - Interviewer: Are there any key changes in leadership behavior? Interview subject: The leaders have to be on, do not sit back and wait, but understand this situation and act upon it. It is also important to have the corporation in their back, 93

99 Appendix 2. we may have an opinion, but it is important to act upon the corporation s goals. This can often be quite challenging for some, many leaders are well-educated, highly paid, are used to take decisions. Now we are more dependent on leaders who can work and collaborate with stakeholders and others in the company. - Interviewer: What leadership characteristics do you think is necessary when implementing PACE? Interview subject: We need leaders that can collaborate, communicate, work handson even more than before. And are able to handle frequent changes. The need to be purposeful in a collaborative way. They need to understand their maneuver, the situation is now more complex and decisions cannot be made in the same way as before. Holistic perspective according to personnel, suppliers, economy, the leaders need more background experience. They are also dependent on working with employees around them, and communicate a more open leadership-style. - Interviewer: Have you made any reflections/learning during the change process? Interview subject: Yes, I learn something everyday. How can you for example ensure a rough change program and still involve employees? The Norwegian labour-culture is very democratically, everybody is supposed to communicate their vision and opinion. This may have changed in way, which means that employees can still have an opinion, but they have to communicate it prior to the decision. We need to change the culture, engagement before a decision is made, and involve more employees in the implementation process. Involvement is highly important, but one can involve employees in another way. How can we handle the balance between top-management making the decisions and middle leaders to act upon them. Communication is even more important than ever. 94

100 Appendix 2. Transcribed interview Demography - Role Formally on the paper I am HR Manager, but I am called HR Leader. - Education - Years of experience I have been 40 years in the company, in been through many of the situations the company has been struggling with during the last years. I have been working with counseling, recommendations, reports, and as a contact-person. Reorganization, our leader-group focuses on establishment of a common understanding and solution for the future. From 2011 to 2014 we have had continuous leader workshops, where we focus on why we are here and what is our assignment. We want to develop tools that allow people to deal with the changes. Also we recognized during these reorganization processes that there were some people who did not understand what the changes entailed. Therefore we established in October 2014 a leader workshop, where the goal was to establish, why we are here? We established a team-chart, which was designed to establish why we are here, were are the company heading? How do we collaborate etc. We found that the purpose was to develop sustainability, economical solutions that are manageable. Also we want to be positioned for future challenges. Background for research - Interviewer: How do you feel about the changes in the industry? Interview subject: There was one who once said; the only certainty is the uncertainty. Mostly I think it is amusing with some changes. By this I mean that there are continuously changes, and that makes employees not able to solidify. However, many researches and people focus on the changes in the industry, and that the oil and gas industry will fade away eventually. I do not think that s the fact, however, I do value the focus on other energy solutions. (Pause, eeeh) There have been marginal changes during the years with regards to the oil-and-gas production. 95

101 Appendix 2. One can ask, why is it so? Eeeeh, it is a small elastic industry. Currently I am guessing that there are around planes in the air, not one of them are driven by windpower or solar-power. Eeeh (pause) are we fare away from what we are supposed to talk about? Interviewer: Eeeh, yes I want to talk further about how these changes are affecting your company? But it is interesting knowing the background for the entire industry. Interview subject: Yes, how will this affect our company? - Interviewer: In what way are the changes affecting your company? Interview subject: I think that it will affect our company in the form of the company taking a direction that is more renewable, we must think differently/alternative, those who are standing on one foot, are not particularly steady, we must get several legs to stand on. Scanoil has had over a period time more focus on renewable energy solutions, among others things we had wind turbines standing at the bottom of a fjord in Hammerfest. We have also been involved in wind-power. So something is definitely happening within alternative (eeeh pause) energy. So Scanoil has to adjust more to the changes and think more alternative than before. But as an oil-and-gas company I think we have long-termed future. So yes, more alternative, however, a long-termed future for the world is counting on us. Interviewer: Yes, I think that to. Leading Change - Interviewer: Have there been changes in your organization, and how have you been experiencing these changes? Interview subject: (Pause) eeeh yes, I went from the gas-industry in 1997, I worked within the gas industry from , thereafter I came into a unit called technology, product and competence. That unit has recently been reorganization, and they had gathered much of the technology production in that unit. We also had reorganization in 1998, 2000, a new one in 2004, 2007, 2011, and the one we had now in the summer of Interviewer: So you have experienced it before I can hear (laughs). Interview subject: How has this affected me? It has affected my positively because 96

102 Appendix 2. when things go by itself, then things become routine, the vigilance in leader meetings go down. It is after a change program you experience the creativity the company possesses. How do we work from here? The entire industry has a need for continuously changes. I am positive to changes, I think it is positive. On the other hand, what is not that positive is that Scanoil has by driven by closed processes, which means that very few people except the management team is involved in the process, which creates uncertainty in the organization. I am pro open-processes, and have experienced open processes, and this has been very positive since people have the opportunity to come up with their thoughts. Anyhow it is the management who decides at last, but then people have the opportunity to say something. They have been involved in the way they are supposed to get involved. And the management team has also been informed with many good thoughts and meanings. We had an unit in Bergen in 2007 and 2011 were the change process did not work, so we had to brainstorm in order to get the process more up-and-running. Therefore we put together a work-team, so that the leader-team could avoid using too much time and energy in one place that they did not really have the competence for. The work-team was put together by people who had a lot of experience and competence on that area, they were presented to the management, and got 100% support. Thereafter we went from poor work-survey results to very good ones. Due to the fact that people were involved in the process, they had the opportunity to come up with their thoughts and opinions and people were secured during the process, since they already knew what was going on. Interviewer: Yes, that is highly important. Interview subject: Yes it is we did the same in the gas unit when I was there earlier. Then we were told to have a closed process, but my chief and I refused and said, this should be an open process. And we had an open process, were everyone was involved and this worked perfectly. So I think open-processes are highly important. Interviewer: Yes, I agree with you. Interview subject: But you asked about, what has been done. I think the most important thing you can do when you have been through a change process is that when your going through a change process you have all those stages Denial, acceptance, etc. and thereafter you fall of again, and that s when management should initiate a new change process. (Pause) A continuously change is positive. 97

103 Appendix 2. Interviewer: Is positive? Interview subject: Yes, I think so. But, you can not have it all the time. Interviewer: No, because you have to ensure some security and motivation in the company as well. Interview subject: Yes (pause). But to answer you, people that are educated and has work a lot with changes, might have a different experience than what I have. But we have spent a lot of time after a change process, to gather leader-teams and reflect/communicate the message. - Interviewer: What is the desired change with your change program (PACE)? Interview subject: PACE is supposed to make the production process more efficient and save costs. How can we work smarter and more efficient? We are supposed to handle documentation differently, and go from 250 solutions to approximately 20. Also the program is initiated to develop more interaction between different units, which should improve the company s profit. (Pause), in addition it has gone beyond the employees, with downsizing. However, we cannot have an overall focus on costs in long-term, because then the company will go down when they stop investing etc. The company has flown with the wind, and hired more people than necessary, the stab is grown outside propositions. What should you do with a stab that are fare out of proportions and that do not deliver anything? Yes, they control, bureaucratization. To many people, with to many opinions. Control does not create much. (Pause) eeeh. You probably have many more questions. - Interviewer: Who has participated and contributed in the decision process to act upon the change? Interview subject: Top-down process management. This was also initiated as a closed process, those who were involved in PACE were not suppose to say it to anyone. - Interviewer: Did you as a leader obtain information about the goal of the change? How were you involved? Interview subject: Yes, we were involved about the goals with the change program 98

104 Appendix 2. during leader-meetings. - Interview: What is your role in the process of implementing PACE? Interview subject: No special role. But I will probably contain a bigger role if they initiate more reorganization. But as a conclusion to what I mentioned earlier, I do not think Scanoil needs more reorganization if they have some ice in their stomach. Kennedy once said, it is in sunshine you should repair the roof. It is not exactly sunshine in our organization today, but we have some free personnel, maybe we should use them with futuristic needs. What should we do in order to be competitive? Which solutions do we have for the future? - Where you offered help/training in leading change? We have had workshops and leader meetings, preparing us for the changes. - Do you have any formal competence or previous experience within change management? As mentioned before I have been through a lot of changes during the years in Scanoil. See above. - How do you feel your competitors/peers are managing the changes good or bad? I do not have any employees working under me. But if you mean my peers I think they are handling the changes fabulous. The biggest problem with the change is actually uncertainty/insecurity and secrets. - Which factors do you consider difficult when implementing PACE? Redundant personnel Leadership behavior - Have the changes affected your role as a leader? In what way? Yes personally? Interviewer: Yes, or more as a leader 99

105 Appendix 2. Interview subject: I have not directly a leader-role, but on the other side I have, so yes, they affect my role as a leader. I am insecure as well, and that (Pause) leads to changes in the way I do things and forces me to take complicated conversations etc. - Are there any key changes in leadership behavior? - Are there any parts of your leadership style you did not feel was compatible with the needed changes? - What leadership characteristics do you think is necessary when implementing PACE? We have a slogan that says; WILL TO LEAD and humility. I consider communication extremely important, openness, honesty, paint a picture that people can relate to. Openness in processes, less noise. - Have you made any reflections/learning during the change process? To closed and protected processes. If you have any further questions, just call me. Interviewer: Yes, thank you so much. Since we got a little time now, I might have skipped a few question, so maybe you will hear for me. But thank you so much. 100

106 Appendix 2. Transcribed interview Demography - Role Leader operational support center drilling and well - Education Engineer - Years of experience 11, 5 years in Scanoil, and 5 years in Baker Hughes Background for research - How do you feel about the changes in the industry? Actually I think the changes are healthy corrections and necessary corrections. Especially with regards to long-term sustainability. And of course I think it is healthy for the industry overall. - In what way are the changes affecting your company? There is more focus on costs and savings, which means more reorganizing, renegotiate contracts, also rigs are docked in anticipation of new missions and new way to save costs. Organizationally these consequences are of great importance for how the company is organized and the leverage of personnel. There is an expectation that employees have a more cost-focus perspective, and employees have to justify the choices they take in another way than earlier. Leading Change - Have there been changes in your organization, and how have you been experiencing these changes? Yes, as I mentioned before I think the changes are healthy for the entire industry. However, I am concerned in relation to the amount of employees and the size of the organization, and how we can coordinate, when we are so many. There are many initiative, but I am uncertain about the big picture. Everybody is working to save costs on their unit, however, I wonder if we benefit from our savings, or are we saving to 101

107 Appendix 2. much? This is due to the fact that some service/support functions are crucial for our work assignments. - What is the desired change with your change program (PACE)? The desired change with PACE is to prime the organization towards a more extensive cost reduction. Scanoil has not been good with regards to cost savings earlier. Therefore the necessity of establishing a visible cost-focus, sustainability and longterm focus has been extremely important. Also the necessity to establish a long-term commitment, not just a solution for a crisis situation right now. So the main goal is to develop a change program that is long-term based, which, looks after HMS safetyculture, information and security. Safety is more important than ever, especially with regards to cruel people who come to the company with mean intensions. - Who has participated and contributed in the decision process to act upon the change? The change program is developed on a consolidated basis. Orders come from tophierarchy. However, my responsibility is to establish a vision/strategy for what my unit can do for the main goals, and what does the cost-savings been to us? Accountability practice, what are our contributions in the large picture? We have leadership discussions, when we meet every week, where there are especially a lot of discussions with regards to the change process, and what the process demands from us. Which solutions are possible? - Did you as a leader obtain information about the goal of the change? How were you involved? You get involved in the process since you are a leader. There is a clear expectation that we are supposed to be loyal and see the contributions we can develop based on the sector you are dependent on. Also there is information continuously, which makes it easier to see the way forward. However, there have been some variances in level of details, but there has been a significant improvement in information in the last six months. The information communicated is now more tighter, stricter and clearer, and this makes it easier to relate to. We are now more focused on making solutions based 102

108 Appendix 2. on business clusters and units, and develop improvement agendas. - What is your role in the process of implementing PACE? As a leader in Scanoil you are the company s representative, and therefore I think it is necessary to disagree in accordance with my level of experience and role. Discussions, alignments and clarifications with my colleagues happen in closed meetings. We do not want to push the company down, but rather be loyal to the company, and try to make other people understand the necessity of the changes. Emerge with integrity. What can I do for the company? Driving force. - Where you offered help/training in leading change? Yes, there have been some workshops called Leading Change. This has been extremely useful, due to the fact that you get to collaborate and reflect in fellowship with others. By talking and discussing with your peers, you get many perspectives on several issues. For example I have been involved in a project, which works directly with the reorganization, and therefore I have tried the dimension of evaluating different solutions and set up new proposals for other solutions and drive argumentation. And of course present these solutions, and evaluate how people react to these solutions. It is impossible to predict reactions. - Do you have any formal competence or previous experience within change management? Hmm, I have not got any leader-training or formal education, but I have been through a lot of changes in Scanoil. I have also worked for a service company for a couple of years ago, when there was a downside period, and therefore I have experienced being permitted, and felt the uncertainty and experience this establishes. I think that is an important experience to take with me in other situations. - How do you feel your competitors/peers are managing the changes good or bad? I think there is alignment towards the necessity of changes. However, many companies looks at Scanoil as a much larger corporations than others, and therefore 103

109 Appendix 2. they expect Scanoil to take a leader-role in order to drive the changes in the industry. So I think many people recognizes the need for change, however, they expect others to do it for them. For example many organizations are structured in different ways, with expat, and therefore I do not think they have the same resource-base as Scanoil. - Which factors do you consider difficult when implementing PACE? As mentioned before, information earlier in the process was characterized by obscurity. However, after the mitigation the management has been better as communicating and pointing towards a direction. The purpose with PACE is not that it is a side effect assignment, but rather that all assignments are a part of PACE. Thus, the company has the ability to answer to the challenges we stand over at our sector. Pace is the term for all of our activities, we are supposed to do the job, we create the jobs. However, it is possible that it is recognition is toughest for most employees, because we have an active role in the process, we know the requirements and what this requires from us. People react differently to changes, actually it is an art reacting to changes. Some employees accept the changes rapidly and therefore they can be an important team-member in the process. However, other struggle and lands in the denial phase. As a leader we have to find the flexibility to deal with both parties. Therefore, we need to be open, tidy, and provide useful information. It is not easy being a leader in these days, answering to the challenges given. Leadership behavior - Have the changes affected your role as a leader? In what way? Yes, hmmm, in recent time I have become very interested in industry context. The more I know and understand in relation to the challenges in the industry worldwide, and the interaction between onshore USA and OPEC countries (non-interaction). It is highly important to understand context in order to have a factual base when you communicate with peers, in order to provide them with some feeling of security. Why does the company react like it does? I have also become more dependent/engaged in Scanoil s handbook, because it provides leaders with good tools and works as a guidance. What is important to more, in order to safeguard, establish security, and at the same time perform. The need for 104

110 Appendix 2. information is greater. - Are there any key changes in leadership behavior? Yes, I think that the external information needs to be clearer, set a direction, be a leader figure in terms of knowing where we are going, and where we can work to improve ourselves. What are our limits, communicate clarity- what should be prioritized and what should not be? Highly important to be open, and communicate as much as I can at any time. Also I think you get more confident as a leader with time, especially since you have a network of colleagues you can collaborate and interlock with. - Are there any parts of your leadership style you did not feel was compatible with the needed changes? Hmm, tricky question. I tend to be very relaxed, but I do not know if that is compatible. I think this question relates to personal attributes, regardless of position. I am not self-centered, but interested in doing a good job. Not necessarily struggling to deliver on top every time, but deliver good at every level, and that goal is easier to deal with. This is also easier to deal with in times of changes, due to the fact that I can prioritize my time on several activities with limited resources. In order to defend the company you need to know the message, and emerge with integrity. - What leadership characteristics do you think is necessary when implementing PACE? Open, communicate information, integrity, stand up for what you communicate, have a trustworthy appearance. If your always open with your peers, you do not need a locked room to communicate. Be flexible in relation to adaptability, in order to change something, you have to be open to changes with regards to changes in work situation, assignments, support colleagues in their changes. Establish some completeness. This is highly important in order to use the context and information, also understand/know the assignments your sector are working for, in order to make the right moves. Perseverance, ready to stand in the storm. 105

111 Appendix 2. - Have you made any reflections/learning during the change process? The most important lesson I have learned during this process, and which I have pleasant of learning is the importance of understanding the context. Also I have been surprised be the amount of time and understanding it takes for some employees to understand the severe consequences the industry are facing. I have also learned that this situation is hard, but if the company and I face the issues and get through them, I think the company is heading in a very interesting and exciting direction. The company is developing new energy solutions, which is highly important and interesting. Also it is an extremely educational period of time, and if we make the necessary adjustments, the work environment will be a lot more interesting. I have also learned a lot about how to handle different people, and learned how to use different tools to handle different employees as a leader. Thank you so much for participating in this research, it means a lot! 106

112 Appendix 2. Transcribed interview Demography Interviewer: First I would like to ask you some general question, to begin with I want to know your role/title in the company? - Role Leader for international exploration with responsibility for onshore search operations - Education Engineer at DPU in Denmark - Years of experience 20 years experience, been in Scanoil since Background for research - Interviewer: How do you feel about the changes in the industry? Interview subject: Initially I have been observing the changes from the outside, and how the industry has been working rationalization in relation to low oil-prices. Now it has reached us as company as well, and therefore we have seen that there is a need for rationalization and efficiency, the activity goes down and we have to adjust our resources, simultaneously as we want to become more efficient. There have been upswing and decline for as long as I can remember, and those situations are not unknown, however there has been a long period with no big declines, and sometimes I feel that we have been living in a bobble, and that we have suddenly reached reality again. Interview subject: have you had other interviews? Interviewer: Yes, I actually I think this is my fifth interview, but I have some remaining. - Interviewer: In what way are the changes affecting your company? Interview subject: General price reduction in the oil-industry, demands 107

113 Appendix 2. rationalization and more efficiency. PACE is developed to gain more efficiency, with fewer resources, produce more and better. With the price-reduction this process has become even more strong and important. Leading Change - Have there been changes in your organization, and how have you been experiencing these changes? We have talked a bit about earlier. Interview subject: Yes, you are thinking about the changes in our organization? Interviewer: Yes, in relation to PACE Interview subject: Yes, in my unit we have been working with the PACE initiatives from above, but developed our own goals in relation PACE, but more specific. And I have been communicating to my peers that if they follow this plan, they do not have to think about PACE, cause than we have already initiated the most important points. So we present the overall PACE initiatives, and then we make it more specific, like planning for performance, offshore processes, perfect well-processes this cuts across the entire drilling & well unit. We are now stricter with regards to costs and time. So we have developed some sort of a cookbook and if the employees follow these recipients, they follow Scanoil s demands. So we are aware of the changes, and we have taking a step towards a more performance and efficiency minded profile. - Interviewer: What is the desired change with your change program (PACE)? Interview subject: PACE is an efficiency program for Scanoil with focus on more cost-efficiency and basically we were supposed to save 1,3 billion dollars, but when the new CEO took over, we are supposed to save 1,7 billion dollars during Which means that all the things we have done and implemented must be materialized to actual savings in our unit. Our goal is to reduce 25% on our time and costs, thus, produce over a smaller period, and save costs. It is very clear what we are supposed to reach, the road we build as we go, the direction is clear, and we have build several local structures to reach these goals. - Interviewer: Who has participated and contributed in the decision process to act upon the change? 108

114 Appendix 2. Interview subject: We have taken PACE and the company s ambitions, and worked together in leaderteams where we have developed an improvement agenda applicable to all of EDI. We have involved a workgroup from my unit, and told them that this is what we work with, if we do this we meet the company s demands, we had workshops where I communicate to my staff, contractors, suppliers, internal stakeholders. To my staff I have used several hours communicating, in order for everyone to know and accept the improvement agenda. I have also used several hours communicating with my suppliers, and travelled all around the world communicating with these in order to communicate where the company is heading, and what they are doing, and which tools we are using in order to meet our goals. And in addition, I have spent a lot time on internal suppliers, internal in Scanoil we have DPI and exploration, and DPN. Interviewer: Yes, so a lot of your time goes by communicating with others? Interview subject: Yes, but it is highly important for everyone to understand what we are doing and where we are going. Interviewer: Yes, especially during such radical changes. - Interviewer: Did you as a leader obtain information about the goal of the change? How were you involved? We have been through some of this already. Interview subject: Yes, we have obtain very clear messages about where we are going, thus, not so clear about the tools we need to use to get there. We have to build our own road in order to meet the goals. So I have been involved in how my unit has chosen to deal with the changes. - Interviewer: What is your role in the process of implementing PACE? Interview subject: My role is some sort of interpreters, pusher, what the company wants gets traded to specific actions and deliveries and structures in my unit, which pulls us in the right direction. With regards to implementing PACE it is the same as I have talked about earlier, where we have developed an improvement agenda, communicated this to employees, and worked on reaching the goals developed. So I think everybody are aware of what we are doing and why, but some might not know exactly what PACE is, since we have been developing this on our own way in our 109

115 Appendix 2. unit. - Interviewer: Where you offered help/training in leading change? Interview subject: Not individually, but we have had some eeeh workshops. When you are saying if we been offered any help/training in leading change (pause) we have a structure, and framework so there is many good qualities with leading change, but maybe individual (pause) sessions with some sort of a mentor in leading change we have not had. And that could have been helpful, especially at the end when things really get tough. But they have structures, and we have been through workshops in will to lead and (eeeh) but this have been more in our leader-group, but we have also had it in my leader-unit, but beyond that we have not had any individual support or anything. - Interviewer: Do you have any formal competence or previous experience within change management? Interview subject: Yes, I have been working in the oil industry since 1997, and there are a lot of changes. Purchased, sold and reorganized continuously. (Pause). There have been a lot of changes, but this change is marked/characterized as more eeeeh (pause) robust and with longer time-perspective. Interviewer: Yes, the time perspective is unknown, you do not really no when it will end. Interview subject: Yes, and it has been a strong initiative with implementing PACE, especially with regards to sharp fall in oil-prices that happens about a half year later, it is almost like a river, you can not control it, you just have to make sure that you do not fall in the edge. In such large processes you just have make sure that the boat floats the right way. - Interviewer: How do you feel your competitors/peers are managing the changes good or bad? Interview subject: (eeeh) They have handled it good until now when we are reaching the end, good atmosphere, and there is still good atmosphere, however, the uncertainty 110

116 Appendix 2. is boomingly spreading, which means activities going out, to much personnel, and therefore people are afraid for there own jobs, because they do not have an overview. We have been working very actively with taking care of our own, with maybe putting some of the employees into different parts of the company where they have a need. But eeeh the uncertainty is significantly larger than previously. Interviewer: Yes, and that is very understandable, and I think many in the entire oilindustry is feeling the same Interview subject: And of course it affects us, when we hear that other companies are downsizing with people. And you know many in your circle that are experiencing downsizing and loosing their jobs. Interviewer: Yes, it is hard. And actually the situation in Stavanger was one of the reason why I chose to write about leading change, because of the huge changes in the industry, and the enormous impact that has on the entire industry, as well as the housing-industry, taxi etc. - Interviewer: Which factors do you consider difficult when implementing PACE? Interview subject: Implementing PACE were not particularly hard, it was mostly fun and exciting. However, it got complicated when PACE was linked with rationalization and downsizing. At the beginning PACE was something we could work with to get better, the last half-year however, PACE is connected to rough processes especially in other units with downsizing and cost cutting. And this will probably affect us as well later in the process with downsizing, we just do not know yet. Downsizing is the fun part of changing. And downsizing happens a bit back-stage we do not know exactly what is happening, we only know that something is happening and if it means something for size and people why do not know and this affects employees uncertainty. Leadership behavior - Interviewer: Have the changes affected your role as a leader? In what way? Interview subject: (Pause) Yes it has, in the way that when we were not talking about being smaller or eeeh reducing, we were more clear in which deliveries we wanted and what we should do. Now, we are more cautious, (pause) and it is challenging not 111

117 Appendix 2. knowing what is happening or what we can expect. My role in this process is making sure that employees feel that they have a normal workday and a good workenvironment, and maintaining a good work-environment during changes is quit challenging and if you do not have a good work-environment results will suffer. And it affects my in the way that I have to be very observant on (pause) eeeh messages that I communicate can be interpreted in many different ways, and people might think will I get fired? and therefore I need to be careful with what I am communicating. One is more aware, also in relation to my own role, during difficult times you interpret everything. - Interviewer: Are there any key changes in leadership behavior? Interview subject: More cautious when communicating, await for what to come, we have made up some opinions and what s coming, and we are hoping that we can put employees in other positions in the company when downsizing hits us as well. - Interview: Are there any parts of your leadership style you did not feel was compatible with the needed changes? Interview subject: No not particularly, I think my leadership style is compatible with leading change, but I have become more conscious about what I am communicating. - Interviewer: What leadership characteristics do you think is necessary when implementing PACE? Interview subject: You have to be motivated, engaged, and you have to be interested in improving your work, and something that interest you. And this unit has that interest, this unit is fantastic, we take initiative, ownership, we have delivered and giving back to the company, so you have to be engaged, proactive and establish concrete actions to your unit, you have to sell the message to your leaders, and I think we have reached those goals. And we have gotten very good feedbacks. So PACE initiative has been a blessing for us, eeeh, there where it gets hard is when it gets connected with the low oil-prices and the industry overall. 112

118 Appendix 2. - Interviewer: Have you made any reflections/learning during the change process? Interview subject: I have made up some reflections during the change, information and the need information from management is huge. We can be much better as a company communicating facts about what is coming, and real alternatives for the future. Because of time from when people suspect that something is going to happen, until something happens, people are thinking what is happening? How will this affect us, and how are we supposed to handle this? And at the same time we need to be professional, so when the company is demanding something from us, we have to deliver at those initiatives. It is a long process, and sometimes clear guidelines comes at the very end. Debriefing I have no further questions. Is there anything else you would like to bring up, or ask about, before we finish the interview? 113

119 Appendix 2. Transcribed interview Demography - Role Chief mobile units in Stavanger and I have been there since the reorganization last year, before that I was in the north (6 years). - Education Petroleum s Engineer - Years of experience 23 years Background for research - Interviewer: How do you feel about the changes in the industry? Interview subject: I think it was necessary for the oil-industry, change of culture, focus on other things than upturns, with less focus on costs. But the industry needs the change, and so does Scanoil. It is commercially right, but I think it is hard to change a culture in an organization, especially since we have been working under good periods for so long. - Interviewer: In what way are the changes affecting your company? Interview subject: Yes, its like I said to run more commercially right, and everything should have a commercial viewpoint when you take decisions, changes in both near/distant time, and therefore it is right to work more commercially right. The biggest changes lies there, earlier we spent a lot of money without actually having them. And now it is more important that we have a basis before earning. Leading Change - Interviewer: Have there been changes in your organization, and how have you been experiencing these changes? Interview subject: Within drilling and well we have been working over a longer period of time with changes than Scanoil, I feel that we started a year earlier than the 114

120 Appendix 2. rest of the company and started making our production more efficient. In drilling and well we started streamlining time and costs. And eventually PACE came, with even more focus on costs. Larger measures in order to save costs. This affected the way we work, we have to change how we do things, suppliers, make sure that we develop more effective production, a different workday. Scanoil had to become tougher with suppliers, in order for them to deliver. Much more use of contracts, and the Nordic culture is not experienced like that before, and now we use much more contracts and work more offensively. - Interviewer: What is the desired change with your change program (PACE)? Interview subject: Save costs as mentioned earlier, and make things more efficient. And this will in the future lead to more projects. The change process is highly important for the future and employees need to think long-term in order for Scanoil to build itself to tackle challenges in the future. And this is also what we communicate to our suppliers. We tell them that if they are a part of our time and cost focus they benefit from it in the future. It can work as some sort of sale-message. - Interviewer: Who has participated and contributed in the decision process to act upon the change? Interview subject: This is a bit hard to answer, in the beginning it is a top-down initiative where visions are build, and then it is up to the company s line to develop this into actions. So it is more a duplex case, where you have to convert strategy into actions. In such a large company as Scanoil typically such large initiatives have to come from the top with some executive goals, then it is up to each division/unit to develop this into some concrete actions in order to obtain the goals. The challenges are however, that the goals are tough, and as a leader your supposed to sell a message that you do not even know if you see a solution on yourself. It is demanding to establish engagement and motivation to something you do not see a solution on. It is challenging to make things positive, and there are not any help from the top, so you have to find out on your own how you want to sell the message. Interviewer: No, and I understand that is hard and demanding, especially since I have read a lot of articles with regards to these matters, and often employees are reacting 115

121 Appendix 2. bad to changes, and are in some sort of denial phase and how can you then motivate and engage those, when you do not even know how you are suppose to work Interview subject: Yes, that is definitely hard, and that is why I said that motivating and engaging employees is particularly hard during this phase. Sometimes you have to turn the message around in order to obtain engagement. Especially since the overarching PACE initiatives are very huge goals on an executive level, so if employees just look at these goals they will think, wow, the company is definitely in the way to a disaster. And therefore it is highly important for us leaders to make those goals to something achievable. - Interviewer: Did you as a leader obtain information about the goal of the change? How were you involved? Interview subject: Yes, early in relation to the marked, because Scanoil started the change process before the oil-prices fell, and that made it hard for us to communicate the changes to employees, since the oil-prices were high in the beginning. Thus, when the changes in the industry also became known, it was easier for employees and us to accept. Involvement has been good, and as mentioned earlier, we false-started the change earlier, we had a leader who already saw the need for change before PACE was initiated and therefore our organization was already prepped for changes. Drilling & well is an extremely loyal organization, so if we have taken a decision, everyone is involved and works for those goals. I have been pondering a bit lately, and we have a large organization that approximately jumps when something is initiated. And there is often some resistance occasionally, but when everyone gets along, you have a muscle that works together towards a common goal. This particular loyalty is unique for our unit. I have experienced other parts of the organization were people are not that loyal. This may be because we work with suppliers and have a slightly different attitude. However, it is very fun to see the great cultural differences within Scanoil, because they are huge. - Interviewer: What is your role in the process of implementing PACE? Interview subject: (Pause) Hmm, we talked about a bit in the beginning, but my role is actually to take action from strategy to action, and to sell a message that is 116

122 Appendix 2. understandable for everyone, and to establish and create energy out of each employee in order to reach the goals. And also, I have leaders under me as well, and therefore it is important that we align us as a leader-group and that those leaders brings the message on. This is highly important, because if you fail in this process, you are unable to communicate the message to all parts of the organization. We have to use the change process right. In addition, when I first came into this job we were put together in a completely new management team. This requires that the new team uses a lot of time to align themselves and not at least to understand each other. To begin with, we had goals we should communicate. However, we are not able to pass on all of those goals simultaneously, thus we had to discuss with each other which goals were most important and if different objectives could be merged together. - Interviewer: Where you offered help/training in leading change? Interview subject: Ehhh, little training, it came a bit afterwards. So we had to solve the assignments commonly in our leader-group. Later we had lead change workshops, but those came a bit to late, we had already been through them. Who should you communicate a common message? I missed a communication-package that could work as a common thought. However, it is good with some maneuver as well. But as we talked about earlier, the most important part is to align the leader-team because it is them that are supposed to align their peers and make sure that strategy is put to action. - Interviewer: Do you have any formal competence or previous experience within change management? Interview subject: More or less, but not so great, I have had managerial jobs were we have been through some different changes during the time among others like mergers, reorganizations and so on. And during these phases, you learn the value of communication. Interviewer: Yes, so you ve learned much about was is important during a change process? Interview subject: Yes, I have learned a lot during my time in Scanoil. And leaders, who have not been a part of a change process before, will suffer great during this 117

123 Appendix 2. phase, because it is hard to be a leader during changes. - Interviewer: How do you feel your competitors/peers are managing the changes good or bad? Interview subject: Quite differently, we diverge especially with regards to how we manage to involve others. Especially with regards to many different personalities, who might go against their leaders. And for example differences in the organization, as mentioned before well & drilling is a loyal part of the organization, but that is not necessarily the factum for the rest of the organization. Everybody has different personalities, and therefore they do not react positively to change, and especially Norwegians like routines, they do not accept things that flinch from the routine. The culture in the north is different from others, and we do not accept every decision made. However I think that drilling & well as mentioned before has a benefit with being so loyal. - Interviewer: Which factors do you consider difficult when implementing PACE? Interview subject: As mentioned before, to sell a message that you do not see a solution on yourself, and make it to something positive. It has been quit challenging to make the change into something positive, and establish engagement. But also fun interacting with so many different people and personalities. Good work-environment equals results. As soon as our team started interacting we manage to establish results. And of course it is always struggling to be under a change process, and of course it affects you as a leader. Leadership behavior - Interviewer: Have the changes affected your role as a leader? In what way? Interview subject: (Pause) eeeh I do not know if it has affect me as much, but of course during changes you have to be close to your peers, communication in all parts of the organization, visible leader, conscious with regards to the fact that it is human beings I am working with. You experience people that react different to changes, and some might take it very hard, which requires you to tackle both ups-and downs. Open, clear, honest communication, visible leader and be close with your peers is the 118

124 Appendix 2. most important. - Interviewer: Are there any key changes in leadership behavior? Interview subject: Yes, that is natural. Close, close with your peers, demand results, make sure that your peers know what they are doing, and if you do not demand results, you wont survive the changes. And also trustful communication, if you do not know, tell them. Be humble as a leader. - Interviewer: Are there any parts of your leadership style you did not feel was compatible with the needed changes? Interview subject: (pause) no, leadership is always thinking changes, and be adaptable to all situations. - Interviewer: What leadership characteristics do you think is necessary when implementing PACE? Interview subject: Open, communication honest, stayer ability, demand result, same message over time, consistent. - Have you made any reflections/learning during the change process? Yes, we have been through it before, loyal organization that accept changes, fun to see the muscle that can work together during a change process. (Pause) Very different cultures within Scanoil, and therefore acceptance will take longer time in different units. Also the fact that we have PACE in our back, means that the management also gives us their full trust and loyalty and that is a good thing. That does something with the change process, and means that not just one person can deny the change. Interface. And as mentioned before, I think it is exciting to work with human beings, and see how they tackle changes, and you become closer with your peers, and you get to know them in another setting. You have to take time to listen to your peers as a leader. And it might even get tougher if Scanoil decides to downsize their organization, and then how to motivate and engage your peers? Debriefing 119

125 Appendix 2. I have no further questions. Is there anything else you would like to bring up, or ask about, before we finish the interview? 120

126 Appendix 2. Transcribed interview Demography - Role Vice President Drilling & well-interventions - Education Engineer from NTH - Years of experience 25 years Background for research - Interviewer: How do you feel about the changes in the industry? Interview subject: I have been through some changes, in 1989 there was a change, but regardless of that. The oil-business has been characterized by turbulence. However, I have not felt that the need for change has been so transparent as it is now. Earlier, it has been like this will pass, this time I do not think it will be over. (Pause) Different than before. Even though it feels difficult now, I think that with time it will be better, and I think we need to work in a different way to survive and be strengthened. So this is not just a change where cycles go up-and-down, we need to change our way of doing things. Also I am excited about seeing how this will affect the whole industry over all. Often the oil-industry gets hit first, and then the rest of the industry follows. When will this happen and establish ripples for all? Interviewer: Absolutely, and you can see some identification of ripples in the industry, with for example the housing industry, and also the taxi-industry. Interview subject: Yes, and many people are losing their jobs, and this will affect other areas. I think we will be hit by a low-cycle. - Interviewer: In what way are the changes affecting your company? Interview subject: In a large degree, I feel that we are suffering a cultural change. In my unit, which is drilling and well we have always had a high focus on time, the more 121

127 Appendix 2. time we use, the more money we spend. And also the less time we use, the more we save and we can produce more. Now there is a much bigger focus on costs, now we are counting crowns, much more than before. Costs have become some sort of mainactivity. So cost has become the most important activity for me right now, and find out how we can reduce costs and at the same time implement a culture that focuses on cost rather than time. Leading Change - Interviewer: Have there been changes in your organization, and how have you been experiencing these changes? Interview subject: (Hmm), (pause) It is a job, experience it as more dramatic than before, and that we need things differently, it wont go over. So we have to unfold our arms and used a lot of time discussing with the organization, business context. With leaders and engineers, what is happening and how can we solve it? - Interviewer: What is the desired change with your change program (PACE)? Interview subject: Cost reduction and increased efficiency. I feel that it is the cost reduction that we are measured on, and therefore costs are the primary focus. This is due to the fact that we do not exploit the increased efficiency by doing more, it is mainly to cut costs. - Interviewer: Who has participated and contributed in the decision process to act upon the change? Interview subject: (Pause) It is a top-down approach from the management team. Our management was early out expressing the need for change, before the oil-price felt so radical. 100 is the new 30, based on our costs-level that was to high, and therefore we needed 100 dollar barrel rather than 30 dollar barrel. (Pause) Therefore it was the management team that saw it first, and than it got spread to the rest of the organization. 122

128 Appendix 2. - Interviewer: Did you as a leader obtain information about the goal of the change? How were you involved? Interview subject: Yes, in relation to PACE, we receive information in our leaderteams from our own leader about what s going on. My leader has continuously meetings with the CEO, review meeting. So I feel that we have a good information flow about what is going on. - Interviewer: What is your role in the process of implementing PACE? Interview subject: No special role in PACE, I switched job last year, I went from leading drilling & well technology, to drilling & well interventions. Which is a new organization, where new members are put together in a different way than earlier. PACE is a separate project, but there are not so many of the PACE initiatives that hits us particularly. So my role is based on if the PACE initiatives hits us, what can we do? Because we still have the same need for reducing costs within my unit, even though I can not drag a direct link to PACE. So we have the same goals with regards to reducing costs with 25%. - Interviewer: Where you offered help/training in leading change? Interview subject: Yes (Pause) eeeh, when I have had a team with leaders, I have always prioritized and though it was fun with some leader training. Therefore last summer, I said that we needed some activities in order to strengthen our leader-team. And than we had some professional help, and in our intranet page, we have a toolbox for leader training, with some exercises for different stages. We had some exercises with business context, and also we had a workshop where we discussed the way forward. We have used a lot of time on leader workshops and exercises. But this is optional for each leader. In addition to this there was held a leading for change workshop. But this was based on much of what we had already been through. My leaders have been through many workshops in relation to this. - Interviewer: Do you have any formal competence or previous experience within change management? 123

129 Appendix 2. Interview subject: Yes, I have been through some changes many times. But I have had different roles earlier. There is a big difference with being a leader for a bigger unit, than just being an engineer (Pause). - Interviewer: How do you feel your competitors/peers are managing the changes good or bad? Interview subject: (Pause) I think they are handling it good, I hope that, right now I am having close-up meeting for each engineer. And I hope that they understand the gravity of the change. Because often it takes some time understanding the real consequences with the changes, and we have to do things differently. But I understand that they have realized which situation we are standing above, but I do not think they understand the gravity of the problem yet. Within drilling & well I think it is easier being an optimist, than in other units in the organization. If you ask the stab, I do not think they will be optimistic about the future. And also not just for others, but also us as leaders, there is an uncertainty with the future, (pause), with relation to increased efficiency, what shall we do what the efficiency, does it work as an output? And also it does not look like we are supposed to increase assignments, and therefore we need to cut down in personnel. How will this happen, and how many? - Interviewer: Which factors do you consider difficult when implementing PACE? Interview subject: Hard to force people to change their behavior. First they need to be convinced that there is a need for change in behavior, and therefore after they need to train on it. (Pause) They also need to agree in some way, not necessarily each human being, but the organization need to agree, and also the leaders across different units. Use some time initially for everyone to understand what is going on, and therefore things go by their self. Leadership behavior - Interviewer: Have the changes affected your role as a leader? In what way? 124

130 Appendix 2. Interview subject: (pause) Yes, one have to accept some truths. One might have an opinion about the world, but this is not necessarily the fact. I have always thought that time was the most important activity for us. And therefore changing that behavior to costs, was not easy. I had to convince myself that this is the right way for the company. And also maybe thinking in relation to what it does with your peers? And the human side of it, will we manage to safeguard them? And how can we manage to motivate the workers to the change without affecting them personally. Have to work with your own conviction. Its important to be honest, and I think it has been easier for me, due to the fact that I agree with the need for change. If I did not agree with the changes, this would be a lot tougher. - Interviewer: Are there any key changes in leadership behavior? Interview subject: Mhm, yeees, continuously development being a leader. Its important to be close with your peers (pause), and listen to what they see as most important. Change processes demands leaders that are more close, and that you skip a few levels in the hierarchy and maybe talk with the engineers directly. In also I have dedicated much time with out customers, important being active with your customers. Being extrovert is a change for me. Consulting people is new for me, and that has been a threshold for me. External orientation- I have trained a lot on that personally. - Interviewer: Are there any parts of your leadership style you did not feel was compatible with the needed changes? Interview subject: See above. - What leadership characteristics do you think is necessary when implementing PACE? Information, orientation, extrovert part of being a leader. Also used a lot of time discussing with my leader-team strategy, direction, where do we want to go? What is Scanoil s purpose with us as a leader team? How can we ensure that our organization delivers on the change? How can our first-leaders handle leading change? What can we do for them? 125

131 Appendix 2. - Interviewer: Have you made any reflections/learning during the change process? Interview subject: Yes (pause) learning use time. Leader-team use time together, reflect business context, how does the world look like and how does this affect us? Its important for me that we have a common though about the future in my leader-team. And also that things take time, stayer-ability, and not shift message to fast. Repeat many times before you can be sure that people understand it. PACE and leaders has been good at staying in the same direction. But what happens with the direction now? New carbon efficiency and energy exciting to see what that will bring and persuade our cost-reduction? Debriefing I have no further questions. Is there anything else you would like to bring up, or ask about, before we finish the interview? 126

132 Appendix 2. Transcribed interview Demography - Role: Leader plan-drilling for Norway - Education: Engineer NTNU - Years of experience: 9 years Background for research - Interviewer: How do you feel about the changes in the industry? Interview subject: I like the first question, how do you feel about the changes in the industry? I like them and I think they are motivating. Earlier we have wasted money, and taking many bad decisions, and therefore I hope that we are about to establish something that is sustainable and more cost efficient. And therefore these changes have not been particularly freighting for me, it was a natural reaction on overexploiting. - Interviewer: In what way are the changes affecting your company? Interview subject: The company is one thing, I think the company is affected in several ways, investors have responded very positively to the changes. Internal in the company we have many different units, the technical part of the company, where I am have practically been untouched, we have just been told what we need to do in order to reach the goals. And that is of course demanding, but at the same time, we have not reached the time when we have 100 employees that have not got any assignments. So practically the changes until now, has been how can we make things more effective? And if we manage to make things more effective, we will have 50 employees to spare. However, we have not reached that point yet, but we will. In the administration part of the organization, they have been told that we are going to be more efficient, we have to cut down with 30%. That s what makes it more effective. We have changed tasks, but as mentioned earlier we have not reached that point where we need to cut, but this will hit us in the summer probably. Macro changes, and more changes in personnel. 127

133 Appendix 2. Leading Change - Interviewer: Have there been changes in your organization, and how have you been experiencing these changes? Interview subject: All the large talents, not afraid, if I loose my job in Scanoil will someone else have use for me in another company, especially the younger ones, which I find it more exciting to work with. I am so impressed by how good the young ones are, they have a mindset, which is more adaptive, they are not so worried. I can say to them I will promise you that there will be a change, but I do not know what will happen. But there is no group in Scanoil, which is better established than us for that change. And they respond with okay, fine. If I express the same message to the older ones, they will respond with shit, I do not think we will have a job until Christmas. Interviewer: Interviewer: Yes, the communication with those two parties will be completely different. Interview subject: Yes, to the older ones I have to communicate steadier. And often I do not succeed with that, I have tried to communicate what I know, and I have been open with them from the beginning, which means that I have 50% of the group, which thinks that the change is great, and they follow my lead on everything, and the other 50% that respond with something new happens again, is he mental But they know that the changes is not necessarily related to me, but I am the one that they see everyday and that communicates the changes to them. So they are harder to get along the ride, and harder to get them along on 100 day-plans, where are we as a group? And where do we want to be? Therefore it would often be great to just recruit new ones, and just work with them, because I see a great potential in them. I think there is a different mindset from the younger ones and the older ones. Petter Stordalen ones said that he always hires more skilled people than himself, because than he knows that they are great. Older ones often think when they experience skilled peers, shit he is good, I need to keep my distance from him. I feel that there are defined poles, the ones that like changes, and the ones that do not. I have 10% of my group that are over 40 years old, they think the changes are okay, 128

134 Appendix 2. but I keep them very close to me. I communicate closely to them. So to generalize on age, work to a certain extent, but is not always the case. - Interviewer: What is the desired change with your change program (PACE)? Interview subject: Where we are today, and where we are in two years. What we do today, if we do not succeed with sustainability, the change will not be effectual. We need sustainability, without breaking the organization s back. Sustainability is the most important, long-term change, with short-term goals. We need a good implementation plan. - Interviewer: Who has participated and contributed in the decision process to act upon the change? Interview subject: My boss is fantastic, and he is an extremely good leader. Some of this is due to his competiveness. He likes to be on top, and therefore he is always ahead. He has defined that we should be a part of the change, and then we will create sustainability. Many of the PACE initiatives we talked about last year, so I feel that we have been ahead of the change. Everything I see with PACE, there is nothing that frightens me. So I feel that I have had a great part of the change process, without being connected with it. Ownership to the change, and my ability to communicate this to my group. I am not afraid of communicating. - Interviewer: Did you as a leader obtain information about the goal of the change? How were you involved? Interview subject: The overall goals have been very clear from the beginning. Macro level more efficient and cheaper. But that is not necessarily easy to understand if you re an engineer. What does that mean? Therefore I need to communicate that for example when we design a well, it is important that we need to look closer at that, that, that and that. I need to be concrete with what I mean my group should do. So my role is clear, and I need to translate the message to my engineers in an understandable 129

135 Appendix 2. way. - Interviewer: What is your role in the process of implementing PACE? Interview subject: line-leader for engineer. Many changes are related to the engineers. If I had disagreed with the changes as a leader I would have much more trouble communicating the changes. - Interviewer: Where you offered help/training in leading change? Interview subject: Yes, HR had one and they been very helpful, at the same time I communicate and reflect much with my peers, or leaders that are over me. If I have a problem I talk with others, and reflect over it, to find a solution suitable. The only thing I need to be a leader is trustfulness. I use my network closely. - Interviewer: Do you have any formal competence or previous experience within change management? Interview subject: Yes, but formally I do not have any formal competence, but I read a lot about it, because I find it highly interesting. And I worked with changes for the last couple of years. - Interviewer: How do you feel your competitors/peers are managing the changes good or bad? Interview subject: Very many of my peers are very divided in how they manage the changes. A typical engineer have more trouble accepting a change than others. However, in relation to colleagues on my level and over, there are very differences. Some are excellent at handling the changes, and others are terrible. Older ones that might have a couple of years back in the organization thinks the changes are really bad. Others, younger ones, are more positive to the changes, they only see the positive side of the change. Good/and bad. - Interviewer: Which factors do you consider difficult when implementing PACE? 130

136 Appendix 2. Interview subject: Have not been so hard. But I try to when the changes are large to gather my leader-team every Monday morning, and if I know that there is coming something, I communicate this to my peers, and we try to make it understandable and discuss how we can tackle it. That has been my methodic with the hardest messages. My group is not particularly change makers, they are followers and that is good, however, it is sometimes good to have a couple of change makers as well in a group. You need to know your group good enough to know who wants to be a part of the change, and who is the elephant in the room. Those who communicate that they agree with PACE, but who are not really okay with the change and talk about in the halls with others I arrange meetings with to tell them that that is not okay. You can have an opinion and I understand that not everyone see the necessity in the change, but do not say that your okay with the changes when you are not. I have completely openness, but do not talk about my behind my back, come to me. Earlier my group had a leader that was completely different from me. I think my leadership style is more effective, he were not much nicer and more interested in making well-being internal. I think that well-being will come when we start delivering. So I think that many experience me as more cynical than the other leader they had before me. Leadership behavior - Interviewer: Have the changes affected your role as a leader? In what way? Interview subject: I only have 3 years experience as a leader, and therefore I probably get more cynical for every half-year. I have become more clear, because then I can not get caught in doing anything wrong. My position is not necessarily a popularity contest, I have chosen to work for Scanoil s need, and this is sometimes hard. Because everyone else in the group can chose to disagree with the changes, and that is not necessarily wrong, I cant force them to be loyal. I can urge them to change, but I cant be buddies with the entire unit. This is hard with being a leader, because many of my peers could have been my buddies, but that is not necessarily right for the rest of the group. And therefore I have become more conscious about that. More open, clear, all that my group knows, won t harm me. The most important thing that I have learned from my leader is, there has never been someone that has been so strict, honest 131

137 Appendix 2. and open with me. But also no one that has been so good to me when I am having a bad day or anything. There is nothing wrong with being strict, but caring. Internal I think I am experienced as careful, but some might struggle with my honesty. - Interviewer: Are there any key changes in leadership behavior? Interview subject: - Interviewer: Are there any parts of your leadership style you did not feel was compatible with the needed changes? Interview subject: ENFJ, enthusiast, gut-feelings, feelings periodically hard, because when I give a tough message, I always struggle with the fact that my peers might get hurt. That is not necessarily a good leadership characteristic. But I think it is a good think with long-term changes, because then I have been through the tough conversation. Tough in relation to give message, because I can see how the respondent is reacting. But I think it is necessity to make amends. - Interviewer: What leadership characteristics do you think is necessary when implementing PACE? Interview subject: Open with information, close enough to understand if the change gets implemented, repeat things several times in order for the message to get understood. Brave, I need to handle that I have might be the most hated person in the room. Trust from my leader. - Interviewer: Have you made any reflections/learning during the change process? Interview subject: Yes, eeeh, absolutely. But I think it is micro learning every time, information-flow. I think that we Norwegians often think the best of everyone, and waits a bit to long for the hard conversations. Often when I take a conversation with that person because he have not delivered like he were supposed to there is often a reason why, or he have never been told what to do. I like leading Norwegians, but often they are very slow, but when they first perceive the message they work very effectively. People have different needs. 132

138 Appendix 2. Debriefing I have no further questions. Is there anything else you would like to bring up, or ask about, before we finish the interview? 133