It’s not the strongest species that survive, nor the most intelligent, but the ones most responsive to change. Certainly, that’s what Darwin believed and who am I to question him?
In the oil and gas industry we undoubtedly have strength and intelligence but are we willing or able to change (again)? Of course we are and of course we must. Our Industry has operated at the forefront of engineering innovation and adaptability from the beginning. We have been evolving our business models ever since hydrocarbons were discovered.
However, we all find ourselves in a particularly unique set of circumstances this time round. The perfect storm of a depressed oil price started by geo-political posturing combined with a global pandemic – and that’s without considering our businesses had not fully recovered from the last crash.
The positive slant on this is we are used to trading peaks and troughs, more so than many other sectors. When your business is predicated on the price of a commodity, you better prepare for a bumpy ride. As business leaders in the oil and gas industry, we are well rehearsed in adjusting our near term strategies to best cope with constant market fluctuations. So, we are better placed than most to deal with the challenges ahead. The businesses I admire most are:
o Fleet of foot, taking advantage of a commercial opportunity;
o Calm in a crisis, providing reassuring leadership and direction;
o Laser focused on a purpose that underpins and defines the business in all market conditions.
So, what is required of us in these unprecedented times? How, as businesses, do we successfully navigate through sapping uncertainty to emerge on the other side corporately and culturally intact? With compassionate leadership (no one is immune to Covid-19), with honest 360° communication, with trust in our staff and theirs in us, and with an unwavering belief in the purpose of our business.
As a former professional rugby player, a positive mind-set, irrespective of the challenge ahead, was a non-negotiable for me. This has also been my default state of mind on the business playing field. At JAB Recruitment, we have experienced three stages of coping with current market conditions.
Phase one is the Fear Zone. This is where the coronavirus was new to all of us. Bad news dominated discourse and travelled fast without interrogation. There was a spread of emotions related to fear and anger.
Phase two is the Learning Zone where we develop a greater understanding of the situation and challenges facing us. We interrogate the bad news and slow the spread of panic and fear. This creates time. All the best players seem to have time. It’s the same in business. This facilitates better decision making. It allows us to give up what we can’t control. Strategic and calm decisions emerge allowing us to navigate towards the next phase.
Phase three is the Growth Zone. As business leaders this is where we all need to progress to as quickly as possible. It is not about revenue or profit growth (this is unrealistic and for phase four). We grow by no longer being fearful or resentful, we grow by remembering our purpose, focusing on how we can help our clients – and even winning new clients.
In the past month, JAB Recruitment has helped a new operator client in Aberdeen by transferring and paying contractors who had not been paid by their current agency due to cash flow challenges. We have flipped the negative of travel restrictions to a positive by sourcing local engineers for an operator client in KL as their preferred team could not fly into country. We have agreed consolidation terms with another client delivering cost and process efficiencies to them and additional revenue and net margin to JAB. Most importantly we have maintained close communication with all current clients, reassuring them we are here for the long run.
JAB is also thinking about the future, accelerating our commitment to the energy transition and what that means in terms of manpower supply. We are also analysing where skills are going to be most critically needed in the new market. How must we adapt and modify our business model (again) to align our services with the changing needs of the market? As always, it will be a combination of technology, relationships, and foresight.
I remember asking for advice from an oil industry doyen during the last downturn. I was interested in his counsel as he had navigated his business through five downturns. His response changed my thinking in an instant. He said he didn’t think in terms of five downturns, he said he was preparing for his sixth upturn.
Chris Black is a founding partner at JAB Recruitment