Christer Tryggestad, Director, McKinsey & Company Norway
Director of McKinsey & Company in Norway, Christer Tryggestad, discusses the importance of the oil and gas industry for the Norwegian economy, the role of the McKinsey & Company within and elaborates on the day-to-day work as a leading consultant in Norway.
There seems to be a persistent shortage of oil workers pushing Norwegian wages to the highest in the world. As a result Norwegian offshore petroleum workers spend two weeks offshore followed by a four-week period of shore leave, which continues to drive costs up. According to you should the government take action and how?
The discovery of oil on the Norwegian Continental Shelf has revolutionized life in Norway. Over more than 40 years, petroleum production on the shelf has created considerable wealth for the country. That being said, the Norwegian Government and regulatory bodies have done an extremely good job in terms of getting the most out of the resources on the shelf. In fact other hydrocarbon-rich governments implement Norway’s model.
According to forecasts there will be a significant lack of engineers in the Norwegian oil and gas sector. Do you agree and what can be done to prevent this?
The first step should be to educate more engineers in the country.
There is a high demand of engineers and as result we see a war for talent that has been going on for quite some time now. Many of our clients are in fact working on how to attract the right people.
I believe the effort to attract (and develop) the needed amount of highly qualified engineers is getting more and more important.
How do you rate Norwegian’s oil and gas companies’ capacity to internationalize?
Overall, I would say it is very good. Norwegian companies are seen as technically highly competent and my impression is that their competence is sought after internationally.
There are many examples of Norwegian companies that expanded activities through successful entering other markets. The Norwegian oil services industry is a good example as it has been able to build strong international potential. Statoil also has delivered impressive international growth and has high ambitions for building operations clusters in several parts of the world.
Statkraft is another exciting journey. This company is Europe’s largest generator of renewable energy and is the leading power company in Norway. They also have an exciting portfolio of hydro projects outside of Europe. They are a few years behind Statoil in the internationalization but are rapidly increasing their international footprint.
McKinsey has over 9,000 consultants in over 100 offices in more than 50 countries. Could you start by giving a brief introduction to the firm and why the firm is interesting for the market?
The Oslo affiliate was established in 1984 as the first top management consultancy in Norway. Globally McKinsey has over 9,000 consultants, of which 100 are based in Oslo.
We work with leading organizations across the private, public and social sectors. Our work affects individual companies, industries and markets. We are represented in most industries, including energy, banking and finance, media, telecommunications, communications, IT and consumer goods.
McKinsey’s global reach and our network of deep industry experts allow us to serve clients with even greater impact.
What is the role of the Norwegian affiliate within the global network of McKinsey?
McKinsey is a global partnership and we serve our clients with the best possible teams irrespective of where the team members are located. As such, most of our Norwegian consultants spend a fair share of their time on projects outside of Norway.
Many of our experienced professionals in Norway are dedicated to the oil and gas industry group. Oslo’s oil and gas group is one out of three global clusters together with Houston and Amsterdam. We serve our clients globally from Norway.
How would you describe McKinsey’s presence and positioning in the oil and gas sector in Norway today and what sets the firm apart from its competitors?
I would say very strong, and we serve many of the major companies in the sector. In the Oslo affiliate oil and gas represents a significant part of our portfolio.
What sets McKinsey apart as a top management consultancy is our global reach; we are unique in terms of having such a big global network of industry experts. Our scale, scope, and knowledge allow us to address problems that no one else can. We have deep functional and industry expertise. We are passionate about taking on immense challenges that matter to our clients and, often, to the world.
Moreover we invest significantly in proprietary knowledge. Naturally the quality of our work is totally dependent on the people who work with us. For that reason we strive to attract and retain the best talent available.
How do you view the human resources challenge in Norway?
When we hire people, we look for leadership potential, integrity, strong analytical skills, creativity and ability to work with people at all levels in an organization. We value diversity and hire people with many backgrounds from different stages in their career. The richness of our backgrounds gives McKinsey the range of expertise we need to tackle our clients’ most complex problems.
McKinsey is a preferred employer and we have been successful in attracting the amount and quality of people we are looking to.
There is a huge upside in the industry as a result of the discoveries over the last couple of years. How much have McKinsey’s services changed as a result of these trends in the industry over the last couple of years?
Norway has a strong history in managing its resources in a way that has attracted international companies while building a strong national oil and gas sector. It has been a good journey for the companies as well as for Norway.
The recent discoveries have created renewed optimism in the sector. With the increased resources comes the need for large new investments in a relatively constrained market, both when it comes to capital, capacity and human resources. It is natural that an increasing share of McKinsey’s work with the sector is directed at how to address the large project portfolio in an efficient and value creating way.
For what type of services do you see the most demand from the industry?
Operations and capital efficiency will always be important topics for the oil and gas industry.
In addition, many of our clients are in the midst of significant global expansion. We increasingly help our clients crafting global strategies and setting up global organisations: striking a right balance between the centralization to benefit from economies of scale and skills/technologies on the one hand side and local autonomy and specialization on the other.
A topic you are quite involved in is solar energy—you were a speaker on the Solar Future conference. According to you how will solar energy change the global energy sector as a whole?
Cost for solar energy has decreased very rapidly and is now cost competitive even without subsidies in certain segments for solar rich regions. At the same time, when we look at the total volume it is still relatively small.
The impact from solar on the oil and gas sector will mainly be as a competitor to natural gas in the power sector. We already see this in certain European markets where large amounts of subsidized renewables, wind and solar, combined with cheap coal and low CO2 prices is challenging the position of natural gas.
If you would you be invited to give a presentation to young Norwegian top managers. With your experience in the sector, what advice would you give them?
The oil and gas industry is a large, global and exciting industry. I would advise young managers to jump on the exciting opportunities you can jump on and get some international experience.
Norwegian management style is fairly non-hierarchical, it is inclusive, open and at the same time quite hands-on. These are characteristics that often also are well appreciated in other parts of the world.
What have been some of your proudest moments as a director of McKinsey Norway?
I have been part of some long-term journey’s serving clients for more than 10 to 15 years as they were transforming from Norwegian into strong international companies. That has been a pleasure and an inspiration.
Naturally the day-to-day work of a consultant has changed because the industry and global business develops. For me it has changed in a way that I am interacting more with colleagues across the world – there is rarely a project any more where we are not extensively leveraging our global network.
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