OTC: Companies must focus on the 'new normal'

Leena Koottungal
OGJ Survey Editor/News Writer

HOUSTON, May 10 -- Oil and gas companies must focus on the “new normal,” according to Steve Knowles, president of Mustang Engineering, who spoke May 5 during a topical luncheon at the Offshore Technology Conference in Houston. In 2008, Mustang had 5,000 employees. That number decreased in 2010. “Our ‘new normal’ is 3,500.”

Knowles discussed four responses to the global recession from a paper published by Harvard Business Review. These included:

• Prevention. Crisis mode, which involves reductions across the board and cutting costs.

• Promotion. Involves opportunistic actions and making strategic investments.

• Pragmatic. Good balance of reducing costs and investing.

• Progressive. Some reductions and investments.

Promotion involves too much optimism, ignores reality, and is a less successful strategy, Knowles said. Progressive is focused on efficiency rather than cutting staff and is a more difficult and challenging strategy.

Knowles also said the world has shifted and the areas prone to shifts are the core of the company such as the mission and values, people, organizational structure, markets and clients, and excellence in execution. “We have to rediscover what works both internally with our companies and what is now working externally.”

Contact Leena Koottungal at [email protected].