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7 LESSONS LEARNED ON BUSINESS PROCESS REENGINEERING AND IMPROVEMENT

When electricity was first popularized at the beginning of the 20th century, there was a huge wave of factories that replaced their steam engines with electrical engines in an effort to increase productivity and modernize operations. However, the initial productivity gains from the electrification were barely noticeable –  a phenomenon known in the economics literature as the productivity paradox and popularized by Stanford economist Paul David.

When researchers tried to find out why, they found that the electrification of factories basically involved the replacement of steam engines and pipes with dynamos and wires while everything else remained the same. It took a long time for industrial engineers to realize that the beauty of electricity didn’t rely only on the fact that it was a cheaper, more powerful and dependable source of energy but also that it allowed them to completely rethink the manufacturing process. Industrial engineers and plant managers eventually realized that thanks to electricity they now could move machines in ways that allowed workers to work more efficiently, change the layout of the factory or create an assembly line.

And it was then and only then, through the combination of new technologies and better processes, that productivity finally increased.

We at the Integration & Trade Sector face a similar challenge. During the initial discussions about the scope and needs of a new trade modernization project, a large portion of the dialogue focuses on the infrastructure and technology without fully reflecting on the changes in processes that will be required.

Just like we saw during the industrial electrification, to get the most out of your IT investment, it is imperative to also modernize the processes that determine how things are actually done.

That is precisely why our trade modernization projects usually begin with a thorough business process reengineering (BPR). Exporting and, especially, importing goods in developing countries is a feat of formidable complexity. Traders must comply with a myriad of redundant government regulations issued by different government agencies characterized by the lack of coordination and, in many occasions, subject to the discretionality of the officers.

So what have we learned from the reengineering and implementation of new processes? Although every BPR is different, here are 7 lessons learned:

  1. Very few people understand the whole process

When conducting the mapping and reengineering of processes, we have found that very few people understand the end-to-end process. Government officials may understand their own piece but not how the entire process works from beginning to end. In trade, this is particularly problematic given the multitude of government agencies involved in the export-import process. Contrary to popular belief, customs administrations are only one administration, although an important one, involved in the import-export process. As a matter of fact, data from the World Bank indicates that customs administrations are only responsible for ⅓ of the delays at the border, and United Nations estimates that the average transaction requires 40 documents and 200 data elements (60-70% of which are re-entered at least once). Therefore, it is critically important to have a holistic approach and a clear understanding of the whole process so that the intervention can eliminate all bottlenecks and not just those on any given administration.

  1. Blame the process, not the people

When you focus on a business process, it appears less threatening than focusing on the employees who do the work. Identifying bottlenecks and cumbersome bureaucracy and linking them to the process instead of to particular employees leads to less threatening and more palatable solutions.

  1. Regulation 2.0

The changes in processes must not be constrained by what the current regulatory framework allows, but instead follow international best practices. This will inevitably require some sort of automation, digitalization of paper forms, data exchange, electronic payments and signatures, and thus substantial changes in the regulatory environment. Therefore, a good BPR must also indicate the changes needed in terms of legislation and regulation in each administration.

  1. If you want to go fast, go alone. If you want to go far, go together

Process reengineering affects the entire ecosystem of all administrations involved, that’s why it is of paramount importance that the whole organization embraces the BPR as their own initiative. Although there is not a magic recipe for this, a good way to help developing a sense of ownership are interactive and regular meetings across all levels of the administration. These meetings, properly executed, represent a great opportunity to gain supporters and also involve everyone in the process asking for recommendations and suggestions.  Similarly, an incremental implementation of the changes and a detailed explanation of why they’re needed not only give people peace of mind but it helps minimize the possibility of rumors that may undermine the process. The employee must be an active participant in the process and not a witness of it. Real change happens from the inside and it is naive to believe that a consultant or consulting firm is going to bring about structural changes without the support of the workforce.

  1. Anticipate the impact and develop tailor made solutions

Many government agencies derive their revenue, all or in part, from paper-based processes. Therefore automation essentially kills their main source of funding (and power). A good BPR will anticipate these objections and develop a well thought out solution with all parties involved. Similarly, some government agencies are more mature than others in terms of IT use, so it is essential to identify at an early stage the agencies that will require more financial support and training and budget accordingly.

  1. The cost of inaction is key

Identifying the weaknesses and bottlenecks of the current processes and recommending new ones is not enough to prompt organizations to take action. Ideally, a good BPR should not only highlight the potential gains from the implementation of the new processes, but also estimate the cost and lost revenue that the status quo is causing. For example, in a recent BPR we detected significant loopholes in the import process of luxury vehicles, oil and dry bulk cargo that were costing the government millions in lost revenue. I cannot emphasize enough this point. Humans are hardwired to be risk averse and research has proven time and time again that we feel the pain of loss more acutely than we feel the pleasure of gain (it’s what behavioral economists and psychologists call loss aversion). Bottom line: when the cost of inaction is higher than the cost of action, people take action.

  1. Excellence is a habit, not an act

The BPR must not be seen as a one-time activity, but as a new philosophy of doing things. International trade changes constantly  and that is why it is important to develop a culture of continuous improvement where employees are incentivized to constantly refine processes.

Cutting a jungle path through thousands of pages of overgrown and, in some cases, outdated government regulations is a tedious and titanic effort. If looked at individually, every inefficient process might seem benign and trivial at first sight, and therefore it is no wonder that they are frequently overlooked. Plus it is always difficult to fight against the inertia of the past. However, we must not underestimate the impact of seemingly small things as we can see in the following image:

We must not underestimate the impact of seemingly small things.

Furthermore, policy makers must analyze the impact of processes as a whole, and not just individually or by administration. It’s only through a careful and methodical analysis of all processes when we are actually able to appreciate the magnitude of the problem, and the cumulative effect of the process ecosystem. As the proverb goes, no snowflake in an avalanche ever feels responsible.

Finally, governments and nations cannot choose their natural resources or their neighbors. But they can definitely choose how they conduct businesses and interact with the civil society, private sector and the rest of the world. Every government has a moral responsibility to design and provide the best services possible to their citizens no matter how trivial they may seem. As John F. Kennedy once said, not everybody is in a position to do extraordinary things, but we can all do ordinary things in extraordinary ways.

Ways Next-Generation Performance Management is Evolving for High Impact

High-impact HR has caused a radical shift in the way performance is being measured and managed in order for companies to be able to attract, engage, and develop their top performers. Organizations are overhauling their performance management programs and focusing on developing the right mix of total rewards and development opportunities to help keep high-performing talent engaged. According to Deloitte’s 2017 Global Human Capital Trends research, 79 percent of surveyed executives consider redesigning performance management a high priority, and organizational capabilities to implement performance management have greatly improved. This “next-generation” performance management addresses today’s workforce issues through three shifts in approach to more strategic performance management.


Next-generation performance management shifts the process from a fixed-cadence annual cycle to a more flexible cadence with intermittent check-ins.
 

More frequent.

Historically, many organizations have used a performance management approach where goal setting takes place once a year. This antiquated, ineffective approach occurring over the course of the year does not account for changing employee development goals, evolving business strategies, and employees moving to various roles and/or teams within the organization. Goals set annually are inflexible by nature and do not accurately reflect the change in business needs nor development in employee skill sets.

Additionally, the traditional annual review process typically does not meet the needs or expectations of today’s more dynamic workforce. Today, over 70 percent of employees work in service or knowledge-related jobs, where performance is driven by an employee’s evolving skill set, innovation, and ability to work in teams. Since these abilities and skills should be gradually cultivated over time, successful performance management focuses on continually developing these capabilities rather than measuring year-over-year improvement during annual evaluations.

Research has shown that managers who provide more regular feedback are far more likely to have high-performing teams than those who retain once-a-year rankings. Also, companies that revisit goals quarterly can see an increase in productivity of 30 percent compared to those that set goals annually.

2. More data driven.

Next-generation performance management involves moving away from rankings and ratings to focusing on truly developing talent.

An output of the rigid, old-world performance management process is the concise rating, or an ordinal ranking of an employee against their peers. Such rankings and comparisons often fail to fully consider the various work and career paths of employees. About 36 percent of companies still use a competitive assessment model designed to award high performers and weed out poor ones.

Ordinal and normal distribution (or bell-curve) rankings can also contain implicit assumptions about performance distributions that are not actually expressed in many typical working populations. These approaches are inflexible and often cause too many employees to be forced toward the middle of the distribution and labelled as “average” performers. Symmetrical models such as a bell curve can also tend to “yank” employees on the lower end of the spectrum, contributing to an overly competitive work environment among employees who know they are contending against one another for performance rankings and incentives.

In response to these issues with the “rank and yank” and bell-curve performance models, various research has been conducted to help determine a more accurate representation of the true distribution of performance among employees. One of these emerging models is the Power Distribution model, which accounts for a small number of “ultra-high” performers, and is also skewed to the right to account for a larger number of average performers.

Another approach to delivering effective performance management to employees is gathering far more (and more accurate) data points about performance via multiple documented performance conversations throughout the year. This method does not necessarily do away with nominal ratings, but rather moves away from an annual, all-inclusive rating in the form of one number, which could inaccurately reflect a person’s overall performance. Here at Deloitte, we are shifting to using a much richer and likely more accurate data set collected throughout the year to tell the entire performance story. While there is no one-size-fits-all model that will accurately capture the distribution of performance among employees, this new attention given to rethinking the traditional performance distribution models is a step in the right direction.

3. More development focused.

By moving from evaluating historical data to evaluating an employee’s future potential, next-generation performance management is changing the type of data used in evaluations and how it is assessed.

Traditional performance reviews often result in a catalog of an employee’s past performance, without a focus on proactively improving future performance (counter to the primary goal of employee development). Social/Informal learning activities that enable experiential development through access to coaches, mentors and experts should be a critical part of development plans.

With employee retention and workforce capability now in the spotlight, the performance process has evolved to focus on continuous coaching. Managers are encouraged to coach individuals for success and to focus on managing to strengths by giving employees work that draws on their unique skill set and professional interests. Increasingly, creative performance management schemes and emphases on employee development are viewed as key recruiting tools for attracting top talent, opportunities absent from traditionally backward-looking appraisal.

This forward-looking feedback lends itself well to today’s dynamic and transparent job market, where young employees expect ongoing career coaching. Research shows that companies that revisit goals quarterly drive more than 30 percent more productivity than those that set goals annually.

Evolution of a new performance model is a process of continuous innovation. The goal is not to reach a design, then implement it and simply walk away. Organizations should constantly re-evaluate their approach, determine what is working and what can be improved, and adjust the programs or processes to adapt to ever-changing needs of the workplace. The 2017 Global Human Capital Trends report chapter, Performance management: Play a winning hand, gives examples from companies on the front lines of evolving performance management and ideas for where to start (or continue) your own initiatives.

Professional Development, Essential to The Modern Workplace.

There was a time when workers just went to work to work. When the driven and devoted were promoted into higher positions of responsibility and no one cared about the effectiveness of the team as a whole.

Those times are changing though. Businesses, whether large or small, are starting to recognise the importance of empowering their staff in order to bring about better results. In today’s target driven world, the results that your business gets can make or break you and the future you have planned.

50 years ago there was less competition. When you needed to increase your results you simply added more people to a shift to increase the number of units. When a worker wasn’t producing the results needed, you dragged them in to the office, told them to work harder or find another way of paying the bills.

The development of the person and the team is so important in business today that those companies (there are still a lot around), which don’t empower their staff will eventually start to see cracks appearing.

Control

There is an ethos in teams that in order to get ahead, you need to have one person controlling the ship and issuing the orders. Many leaders feel that simply delegating a task is the essence of control. “I’ve told you to do this – you need to do it.” This is a false control however.

By empowering your team to take control you can produce results that go off the chart. Tim Ferriss, gives 99% control to all of the distributors that ship his energy product (the single thing that allows him to go off experiencing the world). This giving of control to others greatly improves the results he gets. The players in his team are allowed to make decisions for themselves based on conditions that he has set in place, which subsequently increases their productivity and feeling of wellbeing and in turn increase the number of units he sells and ships.

Focus

When a member of the team doesn’t feel that they are developing within the business human nature will take over and they’ll find it somewhere else. If a business isn’t positively encouraging their staff to grow and develop; their focus will shift into other areas of life when growth can occur.

Some people within the business may find this development elsewhere like in a new job, while others will simply find something else to distract them. If a business is developing their staff consistently, then individuals will feel fulfilled and subsequently more focussed at work.

Every job I’ve ever left, I’ve left because I felt I’d run out of options and opportunities, so I went off to find them somewhere. If you’re not empowering your team to grow and develop within the business, you can bet they will also do the same. Money just isn’t a big enough reason to stay in a job anymore.

Productivity

If you give a person the opportunity to learn a new skill of their choosing, anywhere in life, you can bet they’ll want to instantly put it in to practice. If those opportunities come in the work place, team members become more motivated to produce results.

People who are motivated to improve will find ways to be more productive because they will want to do more of what they love and find better ways to do it. If in business you’re not providing the opportunities for this, then it’s no wonder your staff become demotivated and unproductive.

You need to provide these opportunities that will motivate your team and will increase their desire to become more productive.

12 Reasons Why Employees Resist Organizational Change

Let’s face it; most people prefer predictability and stability in both their personal and professional lives. So, people typically avoid situations that upset the order of things, threaten their self-interests, increase stress, or involve risks. When faced with a change to the status quo, people usually resist initially.

./The resistance continues and, in some cases increases, until they are able to recognize the benefits of change and perceive the gains to be worth more than the risk or threats to their self-interests. I know that people resist change because of lack of communication – on the what, why, when, how, who and the support needed for those affected.

James O’Toole points out in his book, Leading Change, that people resist change due to the fundamental human objection to having the will of others imposed upon them – this to me is true. At the end of the day, all sources of resistance to change need to be acknowledged and people’s emotions validated. It’s far better to anticipate objections than to spend your time putting out fires, and knowing how to overcome resistance to change is a vital part of any change management plan.

The resistance to organizational change is rarely irrational. Employees resist change efforts from a perspective that makes perfect sense to them.

In practice, there are 12 common reasons why people resist change in the workplace:

1. Loss of Job: This is a major reason why employees resist change. In an organizational setting, any process, technological advancement, systems, or product change will include streamlining, working smarter, cost reduction, efficiency, faster turn around times. All these means staff and managers will resist the changes that result in their roles being eliminated or reduced. From their perspective, your change is harmful to their position in the organization! The satisfaction that employees have with their job determines a portion of their reactions during times of change.

Employees who experience a high degree of job satisfaction are better able to weather periods of change. They are more positive in their approach to their work and can see change as an organizational necessity. Unhappy employees, on the other hand, view change as just another annoyance in a long list of complaints. Chances are, whatever the change, any disgruntled employees will view it as having a negative impact on both the organization and them personally.

2. Bad Communication Strategy: This is another crucial reason why employees resist change. The way in which any change process is communicated to employees within the organization is a critical factor in determining their reactions. If you can’t communicate what, why, how, when, who and what success will look like or how success is going to be measured, then, expect resistance!

If employees do not understand the need for change, why ask for a buy in the first place? Especially among those who strongly believe the current way of doing things works well…and has done for the past twenty-five years! When upper management plans and communicates early and effectively with all employees and explains the reasoning behind the change, employees are much more likely to buy into it.

Changes that are mandated with little or no communication, on the other hand, are often poorly received, since employees may feel that the change is being shoved down their throats. When it comes to change management there’s no such thing as too much communication. If there is no immediate information to communicate during a change, telling employees that there is no update regarding the ongoing change is communication! Don’t just keep quiet; this is also the time to maintain an open door policy regardless of where you are placed in the organization.

Be present and available for questioning. Miscommunication is if you communicate insignificant or insensitive information. You can’t communicate too much significant, substantial information.

3. Shock and Fear of the Unknown: This is yet another crucial reason why employees resist change. Employees’ responses to organizational change can range from fear and panic to enthusiastic support. During periods of change, some employees may feel the need to cling to the past because it was a more secure, predictable time. If what they did in the past worked well for them, they may resist changing their behavior out of fear that they will not achieve as much in the future. The less the organization knows about the change and its impact on them, the more fearful they become.

The leading change also requires not springing surprises on people! The organization needs to be prepared for the change. In the absence of continuing a two-way communication with leadership, grapevine rumors will fill the void and sabotage any change effort.

4. Loss of Control: This is a key reason why employees resist change. Familiar routines help employees develop a sense of control over their work environment. Being asked to change the way they operate may make employees feel powerless and confused. People are more likely to understand and implement changes when they feel they have some form of control.

Keeping the doors of communication open and soliciting input, support, and help from employees let them know that their contributions matter. Involve them, elicit their feedback, let them volunteer for participatory roles in the change and all of these, in turn, will help give them a sense of control during periods of change.

5. Lack of Competence: This is a major reason why employees resist change. This is a fear that is difficult for employees to admit openly. But sometimes, change in organizations necessitates changes in skills, and some people will feel that they won’t be able to make the transition well. Therefore, the only way for them to try and survive is to kick against the change.

Some employees resist change because they are just hesitant to try new routines, so they express an unwillingness to learn anything new. They say things like, “I already know all that I need to know to do the job,” or “I am good at what I do why rock the boat.” Resisting employees who have already made up their minds that the change won’t work or who are reluctant to learn something new will impede the organization’s growth and adaptation to change. Frankly, they also hinder their own personal growth and development.

6. Poor Timing: This is another viable reason why employees resist change at work. Change must be introduced when there are no other major initiatives going on. Sometimes it is not what a leader does, but it is how, when and why she or he does it that creates resistance to change! Undue resistance can occur because changes are introduced in an insensitive manner or at an awkward time.

For any significant organizational change effort to be effective, organizational leadership must come out of their mahogany paneled air-conditioned offices, roll up their sleeves, and prepare a comprehensive change strategy from the onset to address barriers. If they can’t do it, then, they should delegate or hire a change management agent to design an effective change management strategy with the help of some of the organization’s managers.

4 Ways PMP or PRINCE2 Will Help You Get An Amazing Job

7. Lack of Reward: There is a common business saying that managers get what they reward. Organizational employees will resist change when they do not see anything in it for them in terms of rewards. Without ‘WIIFM’ or a reward, there is no motivation to support the change over the long run. This often means that organizational reward systems must be altered to support the change that management wants to implement. The reward does not have to always be major or costly.

8. Office Politics: Every organization has its own share of in-house politics. So, some employees resist change as a political strategy to “show or prove” that the change decision is wrong. They may also resist showing that the person leading the change is not up to the task. These employees are committed to seeing the change effort fail.

9. Loss of Support System: Employees already in their comfort zones, working with the managers they get along with, and who are operating within predictable routines know their support system will back them up during challenging times. Changing the organizational structures may shake their confidence in their support system. They may worry about working for a new supervisor, in a new team, or on unfamiliar projects because they fear that if they try and fail, there will be no one there to support them.

10. Former Change Experience: Our attitudes about change are partly determined by the way we have experienced a change in the past. For instance, if in your organization, you have handled change badly in the past, the employees will have good reasons for rebelling. Again, in personal lives, how employee’s families reacted to change during their early years is going to affect the way they view change. Employees, who live in the same house, shop at the same stores, visit the same social club, and drive the same routes daily throughout their formative years may have more difficulty dealing with change than people who grew up in several different neighborhoods. In the same way, those who become accustomed to associating with people who have the same values and ethics may find it more difficult to appreciate the diversity of today’s workforce.

An employee who was raised in a family that viewed change as a challenge to be tackled will probably have a more optimistic outlook about change than a person who was raised in a home that considered change an unwanted experience that upset the predictable family routine.

11. Empathy and Peer Pressure: Whether we are introverted or extroverted, we are still social creatures. Organizational stakeholders will resist change to protect the interests of a group, team friends, and colleagues. It is normal for employees to resist change to protect their co-workers. This could be pure because they sympathize with their friends because of the change that has been thrust upon them.  Managers too will resist change to protect their work groups or friends. All these behaviors can sabotage the success of any change.

12. Lack of trust and support: This is yet another vital reason why employees resist change. Successful organizational change does not occur in a climate of mistrust. Trust, involves faith in the intentions and behavior of others. In organizations where there is a high degree of trust and each individual employee is treated with respect and dignity, there is less resistance to change.

Mutual mistrust will be the bane of an otherwise well-planned change initiative. If an organization is seen as being untrustworthy as demonstrated sometime in the past, so why would any employee trust such an organization? Any sweeping changes on the job can cause employees to fear for their roles in the organization. For this reason, a well-planned outplacement support should be in place to manage and assist employees. Employees resist change because they are worried that they may not find another job easily and quickly.

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Best Ways To Speed Up Your Production Line

Manufacturers should always seek improvement. Continuous improvement is one of the foundational practices of the Toyota Production System, otherwise known as lean manufacturing.

As a company, Marlin Steel has relentlessly pursued the philosophy of find constant improvement, with great results. By never settling for “good enough” and always working to find newer, more efficient ways to get things done, Marlin Steel has grown from being a company on the ropes after the bagel basket market imploded and foreign companies muscled in with cheaper-than-the-cost-of-the-steel products, to being more successful and productive than ever.

So, how can manufacturers speed up their manufacturing processes?

Here are a few things that we here at Marlin Steel have seen make a difference, not only for ourselves, but for our customers as well:

Manufacturing Speed Hack #1: Automate!

Manufacturing automation technology has improved by leaps and bounds in the last few decades. Jobs that once required manual labor can now be handed off to incredibly precise assembly robots.

Not only can these automated machines do the job faster than manual laborers, they do it with greater accuracy and consistency than hand-assembly techniques could ever hope to match. Unlike people, machines don’t get tired or worn out from hours of doing the same job over and over again.

The result is better parts with fewer flaws being made faster, saving time and labor while increasing productivity.

 

Manufacturing Speed Hack #2: Educate!

Chevrolet Volt drive unit manufacturing launch team members Aretha Lee (left) and Patrick Sled install an electric motor into an all-new Volt drive unit case housing Monday, October 20, 2014 at the General Motor's Powertrain plant in Warren, Michigan. The two-motor drive unit operates approximately 5-12 percent more efficiently and weighs 100 lbs. (45 kg) less than the current system. (Photo by Jeffrey Sauger for Chevrolet)

No matter how heavily your operation relies on manufacturing automation, the human element is still critical to your success. Robots still need to be maintained, programmed, and monitored to ensure peak production value, and the workers who operate and maintain these robots should have up to date knowledge concerning their work.

Not only should these personnel be familiar with the operation of the factory automation, they should be familiar with the product being made.

For example, if your employees make steel products, they should know about the different kinds of steel that are available, what their mechanical properties are, and how well that type of steel is suited to the purpose of the final product.

With intimate knowledge of your products and procedures, employees are better equipped to find ways to optimize your production process.

Beyond training employees about the details of their assigned tasks, cross-training employees for multiple roles/tasks can also improve speed for your production.

How so?

There are two major speed benefits that come from cross-training:

  1. Employees Think about More than Just Their Phase of the Production Process. Cross-trained employees are more likely to take into account how the efficiency improvements they enact will affect productivity further down the line.
  2. Work Doesn’t Have to Stop Because of a Single Missing Key Employee. While this doesn’t speed up production per se, it does keep production from being slowed by the absence of a single person because he or she won’t be the ONLY person who knows how to perform a given task.

Sometimes, avoiding the loss of momentum is just as important as gaining speed, and cross-training employees for multiple tasks helps with this. By taking into account how altering one phase of the production process might affect other processes further down the line, employees are less likely to cut corners that will ultimately lead to delays later.

Manufacturing Speed Hack #3: Minimize Transitional Processes

In many production processes, parts have to be moved from one machine to another. In fact, many parts have to be moved from one kind of container to another one that is specialized for a specific process.

For example, parts might have to be moved from a soft PVC-coated basket to a stainless steel or Inconel-based heat treat basket since the soft polyvinylchloride coating of the first basket cannot take the high temperatures associated with a heat treat process.

A great solution for this issue is to use a custom metal basket that has been optimized to withstand multiple phases of your process instead of just one. This saves time loading and unloading baskets between steps of your parts finishing process.

To further reduce transition time from one process to the next, consider rearranging equipment on the production floor to shorten the amount of time it takes to carry parts loads from one machine to the next.

Positive Projections for the Oil and Gas Industry.

An eventful year-2016 is just completed and the New Year 2017 is expected to deliver results for all; a Good Luck wish is much desired for the oil & gas sector. It seems in 2017, oil price dynamics will continue to remain uncertain and volatile. The bright spot is that most of the projections, including from the World Bank, indicate that oil price is on recovery path but it is far away from the sweet spot. EIA forecasts Brent crude oil prices to average $52 per barrel in 2017 compared to $43 per barrel in 2016, close to 21% upward correction. West Texas Intermediate (WTI) crude oil prices are projected to average about $51 per barrel in 2017.

The World Bank prediction is giving a more optimistic oil price value of $55 per barrel. Whereas BofA Merrill Lynch predictions are highly optimistic with WTI Crude priced at $59 per barrel and Brent – at $61 per barrel in 2017. Investment bank Goldman Sachs predicts average WTI price to be $55.6 and Brent to be $57.4 in 2017. Such optimistic predictions would make the upstream investors quite hopeful if not very comfortable. History suggests that oil price predictions have been tricky, therefore on many occasions’ forecasts have been missed by miles. Generally, predictors either over estimate or underestimate oil prices. Now most analysts are inclined towards a bullish oil market. On the contrary Standard Chartered Bank predicted oil prices falling to as low as $10 per barrel in 2016 — such a slump was last seen during the Asian financial crisis in 1998. Arguably, the prediction completely went wrong. Rather oil prices have shown good recovery towards the end of 2016. The upward oil price corrections are likely to continue in the first half of 2017 and the second half may deliver even better performance.

Factors affecting price
Major factors which influenced price of crude in 2016 include oversupply, strengthening of US dollar, increase in US crude stock, and delayed production decision of the OPEC. Fall in crude prices resulted in lower revenue realization for oil exporting countries. As a result most of the OPEC countries suffered severe financial loss. To keep their economic activities going OPEC countries were forced to maintain the production level beyond expectation.

Hope for growth
Despite slight sluggish projected growth in China and India , higher global economic growth of 3.1 percent is projected in 2017 compared to 2.9 percent in 2016. Loss of economic growth in China and India is expected to be compensated by the revival in Euro-zone, Japan, Brazil, and the USA. As a result, in 2017, world oil demand is projected to grow by 1.15 million barrel per day to average 95.56 million barrel per day. Despite marginally lower projected growth, oil demand in
India is projected to increase from 4.33 mb/pd in 2016 to 4.49 mb/pd in 2017.

As per OPEC Monthly Oil Market Report of December 2016, in 2017, demand for OPEC crude is expected to be at 32.6 mb/pd and Non-OPEC supply is expected to average 56.50 mb/pd. At the 171st Ministerial Conference, OPEC decided to implement a new OPEC-14 production target of 32.5 mb/pd, effective from 1 January 2017. The production rationalization decision of OPEC is intended to address the oversupply and alter prevailing global crude oil prices. However, the real impact on crude prices may be minimal as prices of global crude are dependent on many other factors. Tsvetana Paraskova raises plenty of questions over implementation and sustenance of OPEC production cut. Bloomberg reports that OPEC dynamics are principal driver of global crude fundamentals , therefore close monitoring of administrative and operative decisions of OPEC is critical to understand pricing dynamics.

Exploration & Production Outlook
Due to oil price slump in exploration & production (E&P) activities total rig counts in the USA has fallen from 737 in the year 2015 to 597 in 2016, 19 percent year-on-year drop. However, on the backdrop of projected oil price, the US oil and gas companies are expected to speed up E&P activities in 2017. Similarly, oil & gas companies in OPEC countries, Europe, and other oil & gas producing countries are expected to step up E&P activities in 2017. Almost $50 billion of U.S. upstream merger & acquisition deals were announced in 2016, higher than the $30.7 billion for 2015. This is a clear indication that an anticipated price recovery excites the investors. Further, better pricing may act as a catalyst for revival of unconventional oil and shale gas activities in the US 2017.

Ongoing Challenges
The OPEC Bulletin (Oct. 2016) highlights that the oil & gas industry, especially the upstream faces multiple challenges such as: the uncertain prospects for the global economy; managing excessive speculation; geopolitical dynamics; attracting investment, managing advances in technology for efficient exploration and production; and environmental and sustainable development. Further, during the downturns bringing together all the stakeholders to develop comprehensive approaches to address complex issues remains as challenging as before. These challenges will continue to remain in 2017 and beyond.

Conclusion
Global oil & gas industry is on the recovery path which is going to strengthen in 2017. Oil price is predicted to be in the reasonable zone of $55-60 per barrel, which would reduce stress on E&P sector. Slump in oil price proved beneficial for Indian economy and downstream companies strengthening their financial position. The government’s strategic decisions and policy reforms in the petroleum sector are poised to bring positive results starting 2017. All segments of petroleum sector namely: upstream, mid-stream and downstream are expected to attract higher investments. Improvements in the areas of oil & gas production, LNG infrastructure, pipeline network, and CGD network would be seen in 2017. Mr. Modi’s drive for cashless society would have bigger impact on petroleum sector. The petroleum retail outlets are going to play a critical role to make cashless society a reality.

IT Trends for 2017

Like any year before, 2017 will bring its own problems and solutions, shaping up both the way we use and think about technology.
So without further ado, take a dive into the future and check out some of the most exciting tech trends to look forward to in 2017.

Virtual Reality

With forecasts predicting its growth into a $30 billion market as early as 2020, much has been said about the bright future of virtual reality.

Although the technology remained on the verge of mainstream culture throughout most of 2015, things finally started to pick up over the last 12 months – and it seems this time around VR might legitimately reach the masses next year.

VR has come a long way since Google thrusted it closer to popular culture with the release of Cardboard back in 2014 – both in terms of performance and availability. In a window of one year, a number of leading manufacturers launched their own headsets, steadily pushing the technology to mainstream adoption.

While Facebook-owned Oculus kicked off the relay with the release of Oculus Rift in late March, HTC quickly followed up with the launch of its Vive headset in April. In August, Samsung dropped the revamped Gear VR headset alongside the now-discontinued Galaxy Note 7, keeping the momentum going until Sony delivered its long-awaited PlayStation VR companion in October. Closing the cycle, in November Google unveiled its pimped up Cardboard successor Daydream View.

In addition to this, Microsoft, Nintendo and Qualcomm have also expressed ambition to pursue developing hardware for VR, but details and timelines remain hazy.

One of the more pressing concerns with the wider appropriation of VR has always been the scarcity of content and experiences, but with Google, Oculus and Valve opening their own dedicated VR marketplaces this barely presents a hurdle anymore.

Another development to factor in is the recent announcement of the Global Virtual Reality Association which will unite the biggest names on the tech scene – including Google, Oculus, HTC, Sony, Samsung and Acer – to make better content for VR.

With the sheer volume of headset manufacturers and content creators, it’s hardly surprising VR is finally starting to garner the attention of consumers and mainstream media – and you can bet this trend will grow even further over the next year.

Augmented Reality

Meanwhile, augmented reality is also making progress – and the staggering success of Pokémon Go proves the technology has immense potential to influence consumers in engaging and meaningful ways.

In line with business analysts, Apple CEO Tim Cook has consistently voiced out his belief AR has the potential to be bigger than VR and it seems the iPhone-maker is hellbent on getting a piece of the action.

Back in 2015, Cupertino acquired augmented reality developer Metaio, but while the company has since kept quiet about its AR initiatives, numerous reports began surfacing on the Web over the last year.

Earlier in November, Apple was rumored to be working on their own AR glasses in the style of Google Glass. Around the same time, news outlets further speculated the company is prepping an iOS update that will brush up the iPhone 7 with boosted camera capabilities and also introduce a heap of augmented reality features.

Though we’ll have to wait a little longer to see how this pans out, one thing is for sure – you can expect to see a whole lot more AR in 2017.

Autonomous driving

While it would’ve been a terrifying sight a few years back, chances are we’ll be noticing vehicles without drivers more often next year.

As technology continues to evolve, industry titans are gradually venturing into building autonomous vehicles. In fact, the competition in the self-driving market is heating up at exponential rates – and the good results aren’t falling behind.

Since initially introducing its ‘Autopilot‘ feature back in 2015, Tesla has been steadily touching up the autonomous capabilities of its vehicles, demonstrating the vast potential self-driving technologies hold for the future. In fact, CEO Elon Musk has said the car-maker has plans to cram even more self-driving hardware into its future models in hopes of facilitating entirely hands-free rides.

Tesla isn’t the only company experimenting with this technology though.

Google has been running trials with its own autonomous cars in Mountain View, Austin, Kirkland and Phoenix, and while some driving sessions have been less successful than others, its vehicles have clocked over two million miles in the meantime.

Uber is also in on the action. The ride-sharing giant recently acquired self-driving hardware developer Otto and has since successfully put its first fleet of self-driving trucks on the road; and although it wasn’t the first one to do it, the company also ran some real world self-driving tests with its cabs in Pittsburgh.

In addition to this, Apple and BMW are also said to be planning their first forays into self-driving technologies in the near future, but latest reports suggest the Big A might wait a few more years before going all-in with building its own vehicles.

On another front, researchers have also been pushing the envelope, developing new robust systems and algorithms for real-time object detection which could potentially make self-driving vehicles even safer and more reliable. This ought to also help eliminate mishaps like this one and that one.

What else

In midst of all these autonomous cars driving around, another thing to look forward are drone deliveries.

Once a viral publicity stunt, drone delivery might finally be a thing in 2017. Google, Amazon and Domino’s have all been messing around with the technology over the last year, conducting a series of field tests in various locations including the US, the UK and New Zealand. Meanwhile, UPS and Walmart have also been gearing up to begin delivering packets over the air for some time now.

Still, it remains to be seen which company manages to take the technology to large scale. In any case: Having drones drop your pizza from the heavens no longer seems like such an outlandish idea.

Perhaps slightly less exciting, our homes might get much more functional and interactive next year.

Following the less than anticipated success of the Amazon Echo, earlier this year Google unveiled its own Google Home smart speaker to rival the e-commerce giant. Recent rumors further suggest Apple and Samsung might be considering

Taking into account Amazon and Google both leverage their respective Assistant and Alexa artificial intelligence systems to power the smart speakers, the speculation doesn’t seem that far off.

Apple recently opened up Siri to third-party apps and the next logical step would be to integrate it into other devices. Samsung has also been developing its own voice-assistant service with plans to integrate it into future home appliances and wearable devices. So get ready for some frustrating conversations with your home.

One last thing: We’ll probably have to wait a few more years before the wireless evolution, but you can also expect to see a lot less wire next year. In light of Apple axing the headphone jack on the iPhone 7, Samsung is also expected to ditch the standard audio port on the Galaxy S8, slated to arrive early next year.

This should give headphone manufacturers a little more incetive to put the new Bluetooth 5 to good use.

What do you think will be the leading tech trends in 2017? Spur up the discussion and share your opinion down in the comments.

HOW CAN WE PROMOTE GOOD LEADERSHIP IN THE SOCIAL SECTOR?

Building good leadership is often thought of in terms of the resources or ingredients that are put into someone, when really it’s more about drawing certain qualities out.
The traits of a good leader depend on the innate style of the individual: their personality, and the strengths and skills they have cultivated over time. There is no blueprint or structured path to follow; each leader uses their natural qualities to understand and adjust to their own particular working context.
During arguably one of the toughest times in social sector history, how can good leaders be nurtured and encouraged to grow?
We recently explored the challenges faced by current leaders at a roundtable held in partnership with the Big Lottery Fund. Many have been exhaustively documented: a drop in funding, changes to the commissioning environment, increased accountability and declining public trust. But we’re far less used to talking about the effect this is having on our leaders, who – for the time-being, and we suspect for some time to come – are having to think very much in the short term.
Faced with knottier problems, much more legislation and restricting budgets, social sector leaders are having to do more with less in order to survive. This means that they are increasingly valued for the networks they have and their ability to raise funds.
However, to innovate and bring fresh new ideas to the social sector, leaders need to be game-changers too – people who step outside the box and think of new ways to solve persisting social challenges, which, in turn, alter the landscape of the social sector. Conversely, funders tend to prefer game-players – people who behave predictably, who follow funding protocols and who act and think in a similar way to them.
The knock on effect of all this is that the social sector hardly ever recruits from within. New leaders – found in other sectors – bring with them new contacts and new opportunities for funding: a much more attractive proposition.
But given that the social sector is unique in its challenges and in the qualities it needs from its leaders, how can we focus on those already driving the sector forward? How can we “draw out” the best in our people to support organisational stability and sustainability?
It’s far more important to recruit people, rather than roles, and to invest in them.
Succession planning – the process for identifying and developing internal people with the potential to fill key leadership positions – cannot work if future leaders do not know they’re lacking skills. We should reflect on what is needed to become a successful leader within our own organisations, diagnose any gaps and invest in those individuals coming up the ranks.
We could also do more to encourage peer learning and collaboration. The social sector is notoriously territorial: resources are hard won and increasingly limited. Organisations often pass up the chance to collaborate due to distrust, when it could provide leaders with some of their most important opportunities. Learning from and sharing with our peers not only supports the transfer of new and original insights, it also allows future leaders to develop all-important soft skills. We should train our people in collaborative skills that will help charities and social enterprises achieve what may have been previously out of reach – which means more impact for the organisation.
Identifying leadership gaps in those already working within the sector will give future leaders the platform to develop the skills they need, which peer learning will only serve to strengthen. By sharing skills, organisations can potentially unlock the qualities needed for an individual to develop as a future leader of the social sector.

The Real Challenges Public Sector Leaders Face

Doing more with less has become the constant theme for management working in the public sector today. In spite of continuous efforts to create efficiencies and produce results, expectations continue to grow.
The dialogue around delivering results generates discussion in every team environment. How do you manage when you’re expected to constantly do more? What are the best leadership choices you can make? How can you be resilient?
Generally, there are four major challenges that public sector clients tend to focus on. These include:
 
The Focus On Outcomes
Since the 1990s, governments have placed a greater emphasis on outcomes-based results for leaders. At the time, the emphasis and thinking were that government should behave like a business. Outcome-based initiatives make sense and have taken hold over time. They encourage people to think things through and connect their actions to specific results. Government workplaces have changed focus from outputs to outcomes. This isn’t a left wing/right wing ideology. It’s simply what everybody looks for today.
 
The Paradox of Innovation and Creativity
There’s a lot of talk in the public sector about innovation and creativity. But this requires an ability to take risks and make mistakes. Consider the stock market and how people make their investments. If you want to make a bigger bang for your buck, you need to take risks. The public sector, however, is generally an extremely risk-averse environment. So how do you balance pushing the envelope in an environment that really doesn’t look favorably upon making mistakes?
 
The Public Perception of Value
Public services are, by nature, subject to increased media scrutiny and government regulation. Public perception is a big deal – people expect results. Missteps can lead to very public consequences. You don’t want to be the person to try something that didn’t go well and find yourself on the front page of a major newspaper. On the other hand, you don’t want to be considered as lacking initiative. It’s very complicated – knowing how to achieve the right balance in the public eye takes time.

 

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The Need To Build More Resilience (To Deal With Factors Such As Stress And Mental Health)
Leaders in the public may feel like they’re running on a treadmill, trying to keep up with expectations of politicians and the public while simultaneous trying to retain their own personal equilibrium. Developing relationships and keeping the lines of communication open with all the various parties that they’re expected to work with is challenging. Public sector workplaces can be incredibly stressful – people feel there’s not enough of a work/life balance. There’s a great amount of pressure to deliver and be a high-performing contributor. Managing stress on a daily basis is especially difficult, as doing less or hiring additional people isn’t usually an option.
Although many people are not well equipped to handle these daunting challenges intuitively, coaching can give them the tools and insights to handle stress and manage their work/life balance more effectively. Good leaders are able to develop their own resiliency and foster it on others, Building resiliency is key.

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IT in the Public Sector

Technological advancements have a major impact across industries, and on people’s lifestyles. Consider the rise of connected cars, smart power grids, and wearables, for example. Two-thirds of Germans use smartphones – not just for communications, but as cameras and GPS devices, and as a source of news and information (Bitkom, 2015). In short, digitization is transforming our society, and the way people live, work, interact, and consume.
Moreover, IT plays an increasingly critical role in the public sector, which must evolve in line with these new developments. This translates into wide-ranging changes to the provision of services to citizens, homeland as well as international safety and security, healthcare, research and science organizations, churches and social welfare services.
 
Fast, innovative – and based on real-world needs
Digital transformation entails a number of challenges. Government agencies at the national, state or local level confronted with citizens’ rising expectations must deliver comprehensive, enhanced services. Emerging threats such as cross-border and cyber crime have to be countered by greater collaboration within and across public safety and security departments. Moreover, agencies must achieve these objectives while increasing efficiency, and balancing shrinking IT budgets.
At the same time, digitization opens up new horizons.
It offers new platforms and applications for interacting with citizens, streamlined and integrated processes, and IT for analytics in research. In addition, international cooperation made possible through greater connectivity is crucial to crisis and disaster management, homeland and international security, and much more. All in all, innovative communications, collaboration and cloud services create entirely new possibilities to coordinate efforts, and overcome future challenges.

Taking digitization forward
The public sector has to make considerable progress in digitization and cutting-edge IT to make up for lost ground – and now, more than ever, is the time to do so. Tailored ICT solutions, state-of-the-art network infrastructure, and, in particular, scalable, cloud-based solutions will play a pivotal part.
IT is key to reengineering and streamlining processes – and as such, it will be critical in future efforts to modernize government agencies. In summary, digital transformation of the public sector is essential – and indeed, desirable, in order to master the challenges of tomorrow, and maintain competitiveness in the era of globalization.