Oil and gas companies are grappling with a complex array of emerging technologies as they slowly adopt digital technologies such as artificial intelligence, robotic process automation, machine learning, data analytics, virtual reality and more.

As these companies test the digital waters through pilot programs and task-specific rollouts, most focus on understanding and adopting individual tools. Yet, a critical element in digital transformation is the people—and skills—needed to make it work.

Many oil and gas company workforces simply aren’t ready for the major shift in thinking, approach and strategic implementation that digital requires. That gap includes a lack of information technology skills and a tough recruiting market for digital talent.

Rounding out leadership with digital skills

We recently asked 25,000 business leaders if they were prepared to operate in a new digital environment. Only 22% said “yes.” Why are so many unprepared? A major reason is the lack of awareness of what the future will require.

A key factor missing in oil and gas is digital leadership throughout the enterprise—skilled employees, fluent in digital technologies, capable of driving change to capture emerging opportunities, willing to champion innovation and unafraid of risk-taking—who can influence the organization and fuel the transformation.

What do digital leaders do differently? What qualities do they possess? The answers speak as much to mentality and outlook as they do abilities. For example:

  • Digital leaders have digital acumen. They demonstrate an understanding of emerging technologies, and they can speak with confidence about the implications of digital on the business, including the impact on people and processes and the specific technologies needed to be successful.
  • Digital leaders are transformative. They create and nurture an “experimentation mindset,” where failing fast and iterating are valued — a key characteristic of digitally savvy companies. And they are clear champions of technology adoption, constantly driving continuous improvement in their business functions.
  • Digital leaders recognize that change must create and support new commercial opportunities. They understand the landscape of startup market disruptors, nontraditional company relationships and the importance of identifying and acquiring companies and technology that can drive growth. They also push their companies to think from the outside in, investing in customer-focused innovation and supporting the incubation and testing of new ideas for the marketplace.

These skills don’t replace traditional leadership competencies, which are still important for success. They are layered on top—giving leaders the knowledge and ability to blend people and technology to create agile, responsive, resilient, always-improving modern organizations. They are the difference between “doing digital” and “being digital”— between a strategy that cobbles technology onto existing processes vs. a seamless, fluid integration of people and the tools that enable them to work smarter.

Building your company’s digital future

How do you find, or create, a digital leader? The first step is developing a better appreciation of the core competencies needed.

Training can help, too. Many of the skills needed are already inherent in your workforce. With the right opportunity and support, your current employees can help create a more innovative, disruptive approach to work.

But for many oil and gas companies, long-term success in a digital world will require fundamental changes in their approach to recruiting, retaining and developing employees. Without discarding the traditional “industrial” culture that has served the industry well for many years—top-down, seniority-based, risk-averse and insular—the industry will never be able to attract meaningful numbers of employees who thrive in a modern, digital environment.

Today’s technology-savvy employees seek a different value proposition from work than in years past. Culture is key; they want a less-structured, more collaborative environment where they can maximize their personal growth while making a difference. Purpose is important; they want to know the “why” behind their work and the company’s reason for being. And they expect leaders to help them connect their personal purpose to the organizations.

Companies also must rethink how they find talent, with an eye toward expanding where they recruit and the types of employees they seek. The paradigm that industry experience is a necessity must be tossed aside; there is much to be gained by bringing in outsiders who have different perspectives.

At many companies, compensation and benefits packages are weighted toward longevity and length of service. But in a digital world, employees want to be rewarded today rather than tomorrow; they are more interested in benefits they can use immediately such as time off for travel or unique career development opportunities.

These changes won’t happen overnight, nor do they need to. But oil and gas companies that are striving to compete in a global, digital marketplace must recognize the skills they will need—sooner rather than later—and begin changing accordingly.

Rachel Everaard is a U.S. oil and gas people advisory services principal for Ernst & Young LLP.  The views reflected in this article are the views of the author and do not necessarily reflect the views of the global EY organization or its member firms.