| Never a dull moment, it seems, in energy. You | | | | do the old 'tried and true' forecasting - based |
| pay $3.75 for a gallon of gasoline. Oil shoots near | | | | mostly on prior years - and can miss the boat |
| $100 a barrel. You hear a lot about the industry | | | | because our past is less relevant in predicting the |
| and wonder how to redirect, start or otherwise | | | | future." |
| take advantage of a career there. | | | | Some people advise me to focus on large |
| With your questions, intelligence and training, you | | | | companies - saying 'bigger is better'. What do you |
| still may not know where to begin, what to learn, | | | | think? |
| or how to find it. This article hopefully will be a | | | | "There are loads of niche opportunities for |
| short, practical jumpstart in your career growth. | | | | entrepreneurs. On the other hand, this business |
| We will use a simple Q&A format. Sample | | | | has been and always will be 2 things - capital |
| answers below reflect input from experienced | | | | intensive and cyclical. Consider working for a firm |
| executives and are kept generic - for | | | | with enough capital and scale to go after (i.e. |
| confidentiality and to minimize bias. | | | | invest in) growth opportunities even in down |
| Who can give me the best information about a | | | | cycles. The flip-side is you also want a firm with |
| company or opportunity? | | | | an intelligent long-term strategy - in other words - |
| Recruiting and Human Resources professionals are | | | | that stays disciplined and will not blow through |
| helpful but, of course, may not be completely | | | | capital - even in up cycles." |
| objective because of the selling side of their work. | | | | You are a successful entrepreneur. What were |
| Spend time with managers, engineers and | | | | are the keys to building your energy business? |
| scientists with years of industry and, ideally, | | | | "Looking back, I had more than my share of plain |
| company experience. Talk with people doing what | | | | old dumb luck. Things are different now. The rate |
| you think you may want to do. Be interested in | | | | of change speeds up each month. If technology |
| their career developments and be open with your | | | | drives the business - and that is normal in |
| aspirations, concerns, and knowledge gaps. You will | | | | start-ups - your priority needs to be moving from |
| be more genuine and believable and you will get | | | | intriguing concept to product rollout faster than |
| more help. | | | | competitors - and faster than you think you need |
| Once I reach the right person, what should I ask | | | | to right now. The same goes for moving from |
| for? | | | | rollout to getting a toehold in the market." |
| You will make better decisions by taking every | | | | "Traditional number crunching is fine - no |
| chance to go beyond published data and | | | | substitute for analytics, I guess. But they are not |
| marketing materials to uncover and assess | | | | enough. Trust your gut as you dig into strategy, |
| opportunities - with questions like the following. | | | | competitive analysis, and the value proposition. |
| What are the real, unwritten rules on career | | | | Using common sense, and imagining you are an |
| advancement at your firm? | | | | industry outsider, would you put your last |
| "Here at FGH Energy, what matters is technical | | | | $100,000 into this? When you boil everything |
| expertise - or at a minimum having the right | | | | down, what exactly is being brought to market |
| credentials. Our top executives often have earned | | | | that is 1) needed, 2) unique, 3) not being provided |
| a Ph.D. or at least a masters in geophysics, math, | | | | elsewhere, and 4) not expected to be provided |
| or engineering. Sales, marketing, finance and | | | | soon by a larger, better-funded competitor?" |
| operations are important, of course, but this is a | | | | "Remember the economic times we are in. Years |
| science-driven field. We put stock in that. So our | | | | ago, it may have been tougher to get any kind of |
| people with non-technical degrees, including many | | | | outside funding. Now there are plenty of money |
| MBAs, know they'll never be Chairman but also | | | | sources but they vary a lot in quality. So every |
| that they can contribute and be well-paid." | | | | once in a while we ask ourselves about the |
| "Growth here at LMN is just based on results - | | | | experience, reputation and staying power of our |
| plain and simple. We do not care about education | | | | venture capital firms. Are we attracting the most |
| or experience, really, as long as you make your | | | | discriminating players? Why or why not? Smart |
| numbers each time. If you miss once or twice, | | | | money tends to flow to the best ideas and |
| you are on probation and if you miss again, your | | | | execution." |
| pedigree will not matter." | | | | For philosophical and business reasons I want to |
| "XYZ Gas takes care to recruit the best people | | | | look into "alternative" or "non-traditional" sources. |
| so everyone's training and skills are strong here. | | | | What exactly are these? |
| The leaders who emerge have a certain charisma, | | | | A limitation with many of these sources is |
| somehow. They create a vision, enlist talent, and | | | | cost-effectiveness so they only represent 4% to |
| then inspire and sustain excellence. Soft (people) | | | | 6% of energy used. However, with technological |
| skills turn out to be important and they are hard | | | | advances there will be opportunities. Most people |
| to predict." | | | | agree that, in simple English, these sources and |
| Your Annual Report is impressive but I would be | | | | their names include: |
| interested in what you think the real trajectory of | | | | Burning biological waste to heat water to drive |
| your firm is. Where are you headed, and why? | | | | turbines; biomass |
| "On one hand, we're positioned with almost no | | | | Pushing water down into the earth to be heated |
| competition in a niche that could explode in the | | | | and resulting steam returning to the surface to |
| next 18 months. Market cap could triple. On the | | | | drive turbines; geothermal |
| other hand, we rely too much on our CEO John | | | | Using falling water/gravity to drive turbines - e.g. |
| Smith. He is awesome but we do not have a | | | | with dams; hydroelectric |
| succession plan in place and I think we are at risk." | | | | Heat from sunlight creating electric currents; |
| "I do not see us having rocket-like increases but | | | | photovoltaic |
| we are steady. We just finished our 43rd | | | | Magnifying energy from sunlight to heat water to |
| consecutive quarter of modest earnings growth. | | | | drive turbines; solar |
| Our model works. But since top management is | | | | Using moving water/tidal activity to drive turbines; |
| almost entirely white males over 45, and we can | | | | tidal |
| not duck the fact that we need to globalize and | | | | Wind rotating blades to drive turbines; wind |
| diversify our work force to maintain market | | | | I'm confused. What's the scope of the energy |
| position, we will be shaking things up." | | | | industry and exactly what businesses does it |
| "No doubt you have read between the lines of | | | | include? |
| various Wall Street Journal articles, so it is no | | | | Estimates vary but annual revenues are in the |
| secret that at LMN Oil we have just been through | | | | neighborhood of $1 trillion (US) globally. Roughly |
| regulatory and organizational shockwaves - | | | | 10% of jobs are in management - about 220,000 |
| everything is in flux and will be for a while. But we | | | | to 250,000 executives. |
| have taken our medicine, made tough changes, | | | | The so-called 'energy industry' means different |
| will be making more and, at the end of the day, | | | | things to different people and, to make this |
| our resource and asset base is still huge." | | | | situation more vague, many think the industry is |
| Going forward, what is your most strategically | | | | expanding. There are the usual branches - oil, gas, |
| important (core) business and what are ideal | | | | electricity, and non-traditional/alternatives. |
| qualifications for contributing there? | | | | However, at current oil prices, activity increases in |
| "We are basically an upstream organization (i.e. | | | | areas like LNG (liquefied natural gas) and, believe it |
| finding, developing and producing hydrocarbons) so | | | | or not, oil sands. |
| we constantly need to optimize that. Operations | | | | Similarly, there are at least a dozen different kinds |
| and financial analysis skills are always key. | | | | of businesses referred to as 'energy companies' |
| Everything else is basically a support function." | | | | and this list fluctuates. Labels are confusing - even |
| "As best we can tell, our future as a utility (i.e. | | | | to industry veterans - so look carefully. Certainly |
| converting latent energy into electricity) means | | | | explore the following as potential employers - |
| we will never make money on technology. No | | | | banks, consulting practices, grid (i.e. transmission) |
| differentiation or competitive advantage there. | | | | operators, manufacturers (e.g. equipment), pipeline |
| Deal making (marketing and trading) and | | | | operators, services firms (sometimes confused |
| government relations are king and I do not see | | | | with 'consulting firms'; also called 'oil services' or |
| that changing." | | | | 'energy services'), government/non-profits, |
| How cyclical is your business? How optimistic or | | | | investment firms, oil (traditionally large) companies, |
| vulnerable are you? | | | | startups, and utilities. |
| "Some of us started in energy in '79 when oil | | | | How important are my courses in science, math |
| prices danced around $80. People we respected | | | | or engineering? |
| said the increases would keep going. Then prices | | | | "I am smart but I see now that without my |
| started tanking. By '86 we hit bottom. Now I | | | | engineering background I would be pretty lost, |
| work in this firm and sleep a little better because, | | | | even with my MBA. I had no energy experience |
| even though (oil) price changes impact us, we can | | | | before business school, so it turns out it was a |
| sustain things." | | | | good move to take my first job in the |
| "We are golden! Look at our balance sheet and | | | | management training program at LMN (a large oil |
| stock. But I hope we stay lean and stick with the | | | | company). Today (years later) engineering helps |
| cost structure - built for prices one-half of what | | | | me understand technological tradeoffs - critical in |
| they are now. I am cautiously optimistic - but I do | | | | positioning my small start-up company. Friends and |
| mean cautious. No doubt - we live and die with | | | | contacts from my LMN years help, too." |
| the price per barrel and have absolutely no control | | | | "Believe it or not, philosophy was my major and |
| over it. This sector can be ruthless in its cost | | | | my career at FGH Utility is moving along fine. No |
| drivers." | | | | complaints. I am a quick study. I had some |
| "Here is what I know about this business - we are | | | | economics and accounting in college so things are |
| an older and in some ways very mature industry | | | | going well here in the Finance Department. With |
| also coping with recent, rapid change. People | | | | FGH's continuing education program, we keep up |
| naturally respond by resisting change and going | | | | with 'best practices'. I am honing skills and feeling |
| with what they know and grew up with. So we | | | | OK. |