What your experience is worth in a wormhole

Expertise can be a drawback. Sometimes it’s outright deadly. Some things – sometimes – change so deeply, so radically that old experiences do not even serve as a valid foundation for new learning anymore. It becomes so harmful – you must get rid of it – or else you face oblivion. In Natural gas – this happens right here – right now.

Once upon a time (let’s say quite a couple of years ago) I sat with my department head in an assessment interview and we talked about experience. He held the opinion that the one having done 20 years on the job is better than the one having done only 2 years.

Admittedly, the numbers are stark, and on superficial observation, it’s hard to disagree. But as nutty as it sounds, even that sane statement could be a gross miscalculation.

On the face of things, there is nothing wrong with what has been said.

But what is experience anyhow? Does having done the years count? How do you compare two persons, the one having spent 5 years in the trenches fighting every battle there is in the business and earning his scars and another one in a similar position who has administered a contract portfolio from his desk, hardly ever touching the scary pieces of the trade?

This is a common problem of Human Resources when it comes to picking the right proposals for top management to pick. How to evaluate what experience is? Is that the core issue of this post? Not at all.

Because on top of this quite common complexity comes another one. Not only is every single individual different when it comes to work attitude, aptitude to learn what needs to be learned, do what needs to be done, and loyalty to his company and superiors. There is also a market environment those individuals have to be held against. And it could not be crazier than the current state of the Natural Gas business. LNG is an even crazier level of madness.

The whole business has changed so much in the last decade that it has flipped on its head a couple of times to the point that nobody sees with certainty where the journey goes anymore. It’s not only one paradigm change that we are going through, it’s a whole series of them and there is no end in sight. It’s the ultimate Tsunami of changes shaking the Natural Gas business to the core. Suddenly, competencies that were valued for decades, become almost worthless overnight.

Let’s take the oil price link and Central European Natural Gas price formulas. I am sure you know those zany formulas, veritable beasts to tame. Natural Gas companies employ highly specialized experts who negotiate those formulas. Multiple underlyings like Gas Oil and Fuel Oil sometimes with exotic elements such as coal. Time lags, smootheners, reference periods. I always hated those beasts not because they are impossible to compute. Every schoolboy with an EXCEL sheet can do it. No, it’s because they are faking reality.

In a liberalized gas world, those monsters are doomed and replaced by simple and transparent hub markers. All those specialists are redundant. Nobody needs their skills anymore.

What are the years spent to acquire those skills worth? Sure, there is always residual value in something, someone has done at some time. But the hard competence itself is like the capability to distinguish 1000 different species of fruit flies. Impressive, but useless unless you are working in fruit fly research.

When at the turn from the 19th to the 20th century transport became increasingly motorized, a whole profession died out. Horse carriages became redundant as trucks were more powerful, could carry more, became cheaper to operate, and did not need rest. The owners and operators of those carriages were highly specialized experts in how to use and employ horses and how to exploit them best without over- or under-exploiting them. They knew their fatigue cycles, what food was best for what kind of work, what horse was good for a particular job, and how to deal with all kinds of trouble. True experts.

All this became worthless with motorized vehicles. The horse carriage operator could claim sometimes decades of hard-won and precious experience in his trade. The fact was that this new world was just not his trade anymore and with all his experience he had to go back to square zero to relearn the business.

Even if it’s hard to accept, this has to happen in Natural Gas too. But there is a rotten cherry on top. If you put a real freshman and an old expert who has to relearn the business onto square zero, the freshman has an advantage. He is not bogged down by the glorious old past. He carries no useless baggage with him. He starts to run fresh and unencumbered by so-called experience.

Experience can be the iron ball chained convicts used to drag behind them in older times. It has to be unlearned once it becomes redundant. That can be harder than acquiring a fresh skill set in the first place.

We are used to building new learning upon the foundations of the past. But in today’s nutty marketplace, this is as dangerous as it is misleading. Sometimes the foundations are so antiquated, they need to be ripped out and replaced entirely to support the building of experience useful in the new market. Not doing so would be a bit like building the Petronas Towers upon the foundations of the Coliseum.

And when that happens – as is the case in Natural Gas right now – past experience can be a huge liability.

What can we do? Ditching our most senior workforce is not an option. And frankly, there is no black and white. As said above, even employees frozen in time hold valuable experience and expertise. One must just be aware of that and harness the useful pieces.

Today’s workplace is evolving so quickly – no matter what industry – that all of us will be redundant a couple of times over in our lifetimes. That’s not a problem if it’s properly handled. Everyone active in making money (either on someone’s account or on his own) will have to engage in active refreshing of expertise.

Our parents taught us that the workplace of tomorrow (which is yesterday from today’s point of view) will require us to learn forever. Acquiring one skill set that gets you from cradle to grave is not going to work. This is old and dusted now.

Today’s workers will not only have to continuously learn. He will have to unlearn things pretty continuously. It’s like a jar filled with gumdrops (can you still hear the Christmas chimes). You can’t fill anything new in it if you don’t eat up some old stuff from time to time.

Back to the wormhole. The world will go mush. Even fundamental laws of physics don’t work inside as even subatomic particles are smashed to pieces.

Then you emerge, dead or a different being. Better, stronger, more powerful than ever before.

In the Natural Gas wormhole, it’s no different. Liberalization provided the gravitation source which changed everything. We have to take the plunge – there is no choice. Inside, even fundamental laws of the Natural Gas business are shredded to pieces and the world goes cannelloni. Some have emerged now and they have started to change the market. They have gotten rid of their baggage.