Leadership and Managerial Decision-Making in an AI-Enabled Oil and Gas Industry

Abstract

Abstract The Age of AI is defining a new set of challenges for leaders and the integration of digitalization and analytics into management decision-making is now a strategic priority for the oil industry. The fundamental challenge currently confronting the industry is to find leaders who can lead in the digital age. As the industry grapples with the AI revolution, pressure is mounting on leaders to react swiftly to the disruption that comes in its wake. Leadership and management methodologies currently employed by most organizations will not suffice in the digital age because leadership in this new age requires a different set of skills and organizational alignment. Yet, many organizations continue to struggle to put leaders in place with the knowledge and expertise to take on the challenges of leading in an AI-enabled world. This paper addresses the challenges and responsibilities that the AI revolution presents to oil industry leaders and provides practical insights to confront them. It details the concept of ambidexterity and why it is difficult for oil industry managers to achieve. It also outlines what it takes to implement an ambidextrous strategy in the industry and presents a framework for leaders as they drive transformation and explore strategies that will shape the industry's transition to net-zero energy. With social media now shaping business decision-making, the paper also discusses its impact and presents a unique approach for leadership to be strategically positioned to reconfigure their organizations to ensure they survive and thrive in the social age. Artificial Intelligence in the oil industry is not just about managing operations and reducing operating cost. It is also about developing a completely new way of doing business. Leadership in the digital age will be held accountable to a different standard. They would not only be judged by their ability to drive strategy and deliver financial results; they would also be judged on their ability to leverage AI resources and drive deep analytics mindset across their organization, while dealing with energy transition and social media. The workforce of the future will be dominated by technologically sophisticated people connected to multiple platforms. Managing this workforce will require a new kind of managerial wisdom. The big gains from digital transformation will not be realized unless industry executives rethink the criteria with which leadership and management success is judged. Becoming a transformational digital leader requires the ability to define a strategic vision for transformation, understand the promise and peril of social media, cultivate employees to succeed with AI, and use AI responsibly. The future belongs to leaders with these abilities and capabilities.