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Date Posted: 6/22/16

By Kevin Carpenter, contact:

This Father's Day, my son and I went to the movie "Now You See Me 2".  The second in a franchise, the movie involves magicians performing crowd illusions using sleight of hand and misdirection of the viewer's focus.  The misdirections are intentional and involve the magician guiding the attention of the audience in another direction or in believing something is influenced by an event, when of course it's influenced by something totally different.

There is another type of misdirection that is far more common in businesses - that of Unintentional Misdirection. This occurs when a business experiences an event or disruption which changes their focus, how they manage, or even the culture of the company (often without realizing it), so that the very nature of the way the company operates changes.  This is different from business Distraction where events cause the company’s management to briefly change focus to deal with a specific issue.  Unintentional Misdirection causes a company to stray from their core operating principles and tenets and make decisions using an unintentional modified set of objectives. Much like the old adage of the frog in a boiling pot of water, these objectives change and morph slightly but over time become quite different.

The current example that affects the energy industry is the disruption in oil prices.  The precipitous drop in oil prices has lasted longer and gone lower than many experts believed likely.  While some responses to this change are planned and meaningful (lowering costs and divesting assets), other responses fall into the area of Unintentional Misdirection.

In speaking with many employees of both operators and service providers over the last year, I have noticed a concerning trend with some of these companies. I will illustrate this change using the magician’s terminology and process. A downward spiral of sorts starts to develop that looks something like this:



The Setup

1.       The operating focus changes from doing what's important to doing only what's urgent

2.       Additional work is added to existing staff beyond a healthy sustainable level

3.       The Company's stated beliefs and tenets change to the focus on the urgent

The Unintentional Misdirection

4.       Proven processes become abbreviated or ignored because of urgency

5.       The quality of decisions erodes, but are not necessarily immediately noticed

6.       The core operating principles become compromised

The Fail

7.       Safety incidents increase

8.       Ethics become compromise

9.      Laws are broken 

During the Setup, companies make intentional tactical decisions to operate differently for only a short time to get "past the specific crisis".  Companies will state that these short-term sacrifices are recognized as painful but the strategic direction of the company is unchanged and they are committed to their core strategy.  A company can operate in this mode for a short period of time.  Successful firms realize that they should not stop decision quality because of a reduced budget, they simply enforce decision quality on a smaller portfolio of projects.

Somewhere during steps 4, 5 and 6, the company experiences Unintentional Misdirection.  They behave differently than they have in the past as the stress from the crisis becomes the new norm.  Companies may communicate internally as if nothing has changed, but these communications are received with skepticism to an increasingly cynical workforce.  Left unchecked long enough, this becomes the new way to "do business" and the very culture of the company shifts.  People find ways to circumvent the processes to meet their own goals.  Some projects are approved with little quality thought or analysis as the decision makers have limited time and resources to ensure the applied rigor of a quality decision process.  Other projects become delayed, as failing to have a powerful champion, they are measured only on their cost rather than value.  Project cost rather than value suddenly becomes the main criteria for project approval and those organizations that manage costs become the de facto decision-makers on which projects proceed and which ones are delayed, oftentimes to the bewilderment of employees and business partners.  At this point, the investment choices of the companies become misaligned with their stated principles, goals, and objectives. 

This is a very dangerous point for a company and can go one of two directions.  First, they can recognize what is happening and reinstitute the rigor, principles, and processes that have served them well, making investments and approving projects aligned with the objectives of the company.  Management can reinforce decision quality and insist projects are approved and funded based on the objectives and sustainable values of the company rather than the ephemeral benefit of costs saved through disruption and delay. Companies that recognize the change can correct and return to successful operations surpassing the performance of others who do not.

Alternatively, they may continue to slip downward to the Fail, often with disastrous results.  If continuing downward, employees create ways to accomplish the work they see as necessary without the full approval and funding of a sanctioned project.  These workarounds may violate company practices or unintentionally compromise safety standards.  Eventually the company may fail.

To be fair, not all energy companies have devolved to the degree of Unintentional Misdirection, however some clearly have.  Other companies have not fallen below the Setup.  Others still have not even entered step 1.  And I have yet to hear of any current companies that have slipped all the way to the Fail.

Interestingly, this phenomenon seems more prevalent in public energy companies than private ones.  Perhaps this is the Wall Street focus on short term performance that becomes the catalyst to begin with step 1.  Private companies often seem to better balance what's important to what is urgent because they are not beholden to the spotlight of the next quarter's performance.


At KCA, we're working with our friends at Pink Petro and Glexnet to perform a study of the energy industry attitudes and beliefs as we progress though this downturn and begin to recover. You can find more information at

Has your company avoided this trap or has it entered into the Setup stage?  Have they gone as far as the "Unintentional Misdirection" phase?  Do you see a way back to principled and measured operations?  If you would like to discuss how to recognize where you are and how to step back from the edge, please contact us!


Next time – how do I know we’re making quality decisions?




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