There is a growing recognition, at the highest levels of progressive oil sands developers, namely the Oil Sands CEO Council, that their social license to operate is at risk. The fundamental change that is happening amongst this enlightened CEO group, as I see it, is a recognition that the competitive market model is great for many oil sands business purposes, but not for all business purposes.
Providing high paying jobs and capital investment in oil sands development is necessary but woefully insufficient to fulfill the core expectations of Albertans, the owners of the oil sands asset. The fundamental question behind how do you get social license is what constitutes responsible and sustainable resource development in the hearts and minds of Albertans. Albertans have a much more comprehensive set of criteria when evaluating if the oil sands developers, as leasees on their public lands, are worthy of permission and support to develop these public assets. Expectations are high and focused on very different values than just increased economic activity and GDP numbers. Big trucks, big bucks and big barrel production are not the test issues.
The Oil Sands CEO Council recently recognized that the competitive model was insufficient to meet the public environmental expectations on responsible sustainable oil sands development. So they wisely changed course and moved to a collaborative model to deal with environmental concerns. As proof of the commitment the CEOs pushed through the establishment of the Canadian Oil Sands Innovation Alliance (COSIA). The opening paragraph their web page says it all:
“Canada’s Oil Sands Innovation Alliance (COSIA) is an alliance of oil sands producers focused on accelerating the pace of improvement in environmental performance in Canada’s oil sands through collaborative action and innovation.”
The success of the culture change resulted in the universal commitment of the participating oil sands developers to share ALL INTELLECTUAL PROPERTY that any of them developed, in the environmental aspects of air, land, water and tailings. This was defined as a responsible and sustainable development game changer. Michael Porter of the Harvard business school, and one of the leading thinkers on corporate strategy, has said COSIA is one of the most innovative and unique approached to social license in the world. He sees the game changing potential.
Building on that hard work and success of the COSIA culture change, the Oil Sand CEO Council turned their attention to other possibilities for collaboration rather than just competition. They focused on the socio-economic impacts industry growth is having on responsible and sustainable oil sands development in the Athabasca Oil Sands Area (AOSA). Could the oil sand industry retool itself to look at how they could work collectively to be more collaborative with regional stakeholders? Could the get beyond the culture of pure competition and be more effective in providing positive local results as a consequence of more responsible and sustainable oil sand development?
The challenge was to think and focus on regionally prosperity in the face of big corporate issues of a fragile commodity price and a volatile global economy with a world-wide negative awareness of the environmental challenges of oil sands development? Propitiously the industry already had a regionally focus industry organization, the Oil Sands Developers Group (full disclosure – my former employer, I resigned as Executive Director until April 2013) that could be reconstituted to reach these regionally based, stakeholder engagement relationship and based collaborative models and goals.
Pulling some of the most regionally aware and engaged senior personal from many of the Oil Sands CEO Council corporations, with the pro bono help of Accenture, the Job 1 was the designing of vision for this new collaborative approach. The group effort only included oil sands developers but it resulted in what I think is a very enlightened Vision Statement for this aspiration of the OS CEO Council…which they accepted BTW!
I will do many more blog posts to explore the implications, meaning, possibilities and on-the-ground experiences with this vision over time. Suffice now for me to share it with you: (emphasis added)
“To pursue innovative solutions that helps to build thriving communities and shared value with our neighbours and enables the responsible growth of Canada’s oil sands. We facilitate engagement, build relationships and collaborate to create measureable socio-economic benefits.”
I think this vision statement is inspirationally brilliant and aspirationally enlightened. Can a fundamentally competitive industry rise to this self-identified challenge? I don’t think it has a choice if it is to earn and be worthy of the social license to extract the wealth of the oil sands resource as tenants on public lands. I think the enlightened progressive CEOs in the Oil Sands CEO Council gets this and they know they have to make this happen.
Will it be easy? Hell no! In fact it will be much harder than the COSIA mandate of collaborative action and innovation that is pure science based. The socio-economic challenges are more human values and relationship based. There are complexity and feedback loops that are valid but represent competing values sets and perceptions amongst various stakeholders. We will only have access to limited facts and evidence so wisdom and judgment are critical talents. The competitive market uncertainty of oil sands development and the responsible sustainable environmental challenges are not nearly and complex as this kind of human-based cultural uncertainty.
I am personally very excited about the possibilities and confident in the oil sands top leadership tp get this and to commit to making it happen. Their internal challenge will be the typical culture of production goals lead by linear mechanistic problem solving models inherent in industrial models. I think that is where the CEOs have their biggest challenge in delivering on this essential aspiration to prove worthy of a social license to operate. Next will be the challenge of working in horizontal networked cultures that do not care or condone the typical top down command and control of the conventional industrial modus operandi.
Stay tuned. This is what this blog will be all about….helping to make this regional industry-stakeholder collaborative relationship happen and be the best it can be…for the greater good and the bottom line.