The spring of 2020 saw the angst of the pandemic subsumed by the movement for racial justice. In the United States, leaders across society began speaking out, proposing policies, and making commitments to participate in change.
The racial equity and justice movement is important on so many levels. It is also a foundational disruptor for the way oil and gas companies do business — now and for the foreseeable future. The movement is broad and deep and will endure. In addition to affecting every level of civic society, racial equity and justice will impact numerous business drivers and social risks that oil and gas leaders care about and will have profound and lasting effects across every industry and company.
Let’s take a closer look at this last of three disruptors for the oil and gas industry that are discussed in my new book, The Gamechanger’s Playbook: How Oil and Gas Leaders Thrive in an Era of Continuous Disruption. (See these Both True editions to catch up on the first disruptor: the rise of the millennials and the second: environmental activism gone mainstream.)
Both of these things are true:
- There is a strong business case for addressing diversity, equity, and inclusion —to empower innovation in our industry and mitigate social risks that oil and gas leaders face.
- Game-changing oil and gas leaders embolden strongly diverse and inclusive cultures not simply because it’s good business, but because it is the right thing to do.
The racial equity and justice movement has and will continue to influence every aspect of society in meaningful ways. Here are a few examples:
- Investors’ expectations of portfolio companies: Like companies everywhere, investment firms of all sizes and persuasions are talking about their own commitments to racial justice, company diversity, and their culture of inclusivity. We can expect guidance from investors to their portfolio companies during 2021.
- Oil and gas company statements: Southern Company CEO Tom Fanning was an early leader in meaningful communications about company culture and racism. In this June 2020 statement, Fanning went beyond a condemnation of racial inequity and charted a course for his company’s future, saying: “We will not treat this as an event, but rather a long-term continuum of engagement centered on listening, talking, and learning in order to achieve sustained institutional improvement.” Other utilities followed suit: In addition to making a statement condemning the killing of George Floyd and systemic racism, Duke Energy pledged $1 million to nonprofit organizations committed to social justice and racial equity.
- Expectations interwoven with environmental and climate justice: Environmental and climate justice are going mainstream. Environmental groups are getting the message from their boards, funders, and workforces that their leadership, base of support, and work issues aren’t representative of the diverse public. And as those groups address the issues that racial justice and equity activists are highlighting, that pivot will eventually inform stakeholder pressure on your company to act as well. Environmental groups across the political spectrum have made statements both denouncing racism and pledging to improve diversity and inclusivity in their ranks. In addition, climate is already embedded in growing sectors of the social justice and racial equity movement.
It matters because:
Your investors, employees, and stakeholders now expect you to translating racial equity and justice work into your corporate strategy and culture. Your work in this arena also influences key factors from the other two disruptors — millennials and climate activism.
- Millennials are a tremendous mobilizing force for racial justice and will expect companies they work for and do business with to embrace the leadership opportunities of this moment.
- The same changes environmental activism has wrought on mainstream investor and policy expectations apply to your company’s approach to diversity, equity, and inclusion.
The mistakes we make:
The uncomfortable work of racial equity and justice seems far away from the practical work of getting a molecule of natural gas to the right location. Our industry is led by engineers and scientists who want straightforward challenges to solve. Common objections to taking on this work include:
- This is an issue for human resources, not leadership.
- Our leadership is color-blind — we promote the best people regardless of race.
- This is not an issue within our organization.
Business-as-usual leaders have been deflecting this work for years — because it’s difficult and upends the social order that we completely take for granted.
Take note: That social order is gone. This disruptor — like the rise of the millennials and the mainstreaming of climate activism — is here to stay. For the sake of our businesses as well as our leadership, we need to look into our own hearts and find the personal conviction to make addressing racial justice and equity the work of our careers and lifetimes.
Seize the day:
This work is central to our humanity. Further, it is intrinsic to our shared future. As the country diversifies and millennials ascend into their prime, our legitimacy as civic leaders will be based in large part on whether or not we get this right. Your efforts to take on racial equity, justice, and inclusion head-on — no matter how imperfect — must begin immediately. This is not extra work; it is precisely leadership work.
Some ideas to get you started:
- Hold a 2020 lookback conversation with your leaders this month. Are you hitting the mark on company diversity, equity, and inclusion? Chances are you have work to do (we all do). Use that conversation to set up a planning meeting in January to set your company’s 2021 diversity, equity, and inclusion strategy.
- Schedule a Gamechanger’s Playbook Strategy Session with me and your leadership team to discuss how they can implement The Gamechanger’s Playbook in 2021. (Want to order books in bulk for your high performers? Reach out to Lindsey.)
- Listen to my podcasts with Paula Glover, president and CEO for the American Association of Blacks in Energy (AABE) and Kim Greene, chairman, president and chief executive officer of Southern Company Gas to hear from two pragmatic, game-changing leaders.
- I’ll be hosting an Ask Me Anything podcast featuring your questions on oil and gas game-changing leadership. Reply and ask me a question to share on my podcast.