I have heard the following quote attributed to both J.D. Rockefeller and John Paul Getty, although I have been unable to verify its actual source. Not that it matters, as it’s as true as true can be:
The best business in the world is a well run oil company. The second best business in the world is a badly run oil company.
Many people probably labour under the impression, as I once did, that oil companies represent the most efficient, well-managed businesses going. How else would they make profits running into the billions year on year? Anyone who’s worked in an oil company will quickly learn that nothing could be further from the truth, and perversely it is their very success which makes them so inefficient.
Oil companies make money by opening a spigot and flogging what comes out. What comes out is extremely valuable, so they make an awful lot of money very quickly. But if it is so easy, why isn’t everyone doing it? Because to get into a position where you own the spigot and what comes out of it you need to have invested an enormous amount of capital, which few people have. By far the greatest contribution of western oil companies to any given development is their stumping up enormous amounts of the necessary capital. Their secondary contribution is to manage the expenditure of this capital in an efficient and responsible manner. Of course, the criteria for that last one is that the oil company must be more efficient and responsible in matters financial than either a kleptomaniacal tin-pot dicator or anyone else in the position of owning an oil well, who thankfully for the western oil companies all happen to be kleptomaniacal tin-pot dictators. Or Russians, who have even less clue than tin-pot dictators how to spend money wisely.
Anyway, the upshot is oil companies throw lots of money at a development and make lots of money in return. LOTS of money. If you are making lots of money, what is your incentive to do something differently? There isn’t one. If you are making lots of money, what is your incentive to do something which is not only different but a right pain in the arse as well, like sack an idiot, launch an efficiency drive, or refrain from airfreighting scaffolding tubes around the world? None whatsoever.
Contrast this with an engineering company providing services to an oil company. How do they make money? Well, they convert manhours into drawings and sell the drawings. Sometimes they even sell the manhours and hope the oil company won’t notice no drawings have been produced. They do so on a margin of somewhere between five and ten percent. In other words, if an employee of an engineering company goes to the toilet, makes a coffee, picks his nose, or surfs the ‘net for 3-6 minutes an hour, the company loses money. Which goes a long way to explaining why most of them do, unless they happen to have a subsidiary in Jakarta or Chennai stuffed full of people who go home at weekends to till the family farm with a buffalo. For engineering companies, time is money and people are vital. For oil companies, oil is money and people are involved for some reason, but nobody’s sure why. The difference can be appreciated by observing a typical first day of work at both companies.
When you join an engineering company you get instructions to present yourself at the office no later than 8am. You walk through the front door bypassing the empty receptionist’s desk (being an overhead she starts at 9am), and find your manager’s office. You know who he is because he interviewed you last week. He will run at you as if he has discovered there are only 24 hours in the day instead of the expected 30. He’ll grasp your hand and, taking you by the shoulders and wheeling you around, propel you to an empty desk outside his door. There you will be plonked into a seat opposite a computer which is already booted up, and has a Post-It note stuck to the screen with your username and temporary password. Before you’ve caught your breath your boss will have plonked a pile of papers on your table, splurted out the location of a folder on a server you don’t know the name of, and told you to “get up to speed” in preparation for the meeting this afternoon. By the time you go home at 6pm you’ve delivered a presentation, negotiated a contract or two, reviewed a folder full of drawings, done your HSE induction, been issued with a badge, missed lunch (nobody ever tells you where to get grub on your first day), written a progress report, and feel as though you’ve worked in the company a month.
When you join an oil company you get instructions…actually, no you don’t. You don’t get any instructions. Your first day on the payroll is 1st September, and by 18th September you think it may be time to give somebody a call to ask when and where you are supposed to be. After finding out that the person who interviewed you has now been promoted to Senior Venture Planner in the company’s Rio de Janiero office, the person who has replaced her has no idea where you are supposed to be. She promises to get back to you. By October she will probably have called you having been on the receiving end of a phone call from a bewildered engineering manager who thought he was supposed to get a new engineer sometime this autumn. By mid-October, if you are lucky, you will know where you’re supposed to be and on what date. If you’re daft enough to turn up before 9:00am you can expect to wait outside the door for a while, staring helplessly through the glass at the empty reception desk beyond, or the plastic square against which you will one day press your badge to gain entrance. Once everyone else arrives and somebody lets you in, you’ll speak to the receptionist at the front desk. She will take you through to an admin. girl whose job is to…well, nobody is sure. But she will give you a blank look as the receptionist skedaddles back to her desk before she can get roped into doing any more work today. The admin. girl will um and ah, um and ah, and when she sees you’re not going away she will pick up the receiver of her phone and stab a few buttons. The conversation that will follow, if you can call it that, is akin to that which takes place between an employee at a job centre and a smack-head who has been told to show up or else lose his dole cheque.
After a lot of pouting and snorting, the admin. girl will take you down the corridor, into a lift, up a few floors, out of the lift, down another corridor, and into an office containing a Human Resources department and more incompetence per square metre than anywhere else on earth. A sour-faced harpy will bark at you for having come to the wrong office on the wrong day less than a minute after saying she doesn’t know who you are and she’s not the one dealing with you. She will then ask you where you are supposed to be working, perhaps not realising that you are stood there hoping she might be able to tell you. She will make a few phone calls, grumbling that her busy day has been disturbed and she might not be able to book herself on the training course in Paris before lunchtime. She will put the phone down, look up at you, and say something along the lines of “Okay, you need to go to Churchgate”, as if its meaning and location were self-evident. If you ask where it is you can expect an impatient snort, a wave of the hand, and no useful information which might help you get there, so you’re better off wandering down the corridor poking your head in the offices as you go and finding the nearest expat. He’ll tell you where Churchgate is.
Unfortunately, when you get there the bloke you’re supposed to be meeting will be on leave. The department admin. girl, different from the other one in name and appearance but identical in all other aspects including manners and competence, will plonk you at an empty desk and tell you to wait until he comes back. From his three-week skiing holiday? Apparently yes. By this time it’s 11am and everyone is starting to think about lunch. You know this because since you’ve been sat down half a dozen people have wandered aimlessly past carrying mugs of coffee and engaged you in idle chit-chat, and the admin. girl has already left. By the time you’ve explained to everyone where you’ve been working previously it’s actually lunchtime and you join a jolly throng of twelve of your new colleagues on their way to the staff canteen. Over three courses and an hour and a half you get to know everyone, but alas nobody has the faintest idea of what job you’re supposed to be doing. “Maybe you could ask HR?” they advise kindly if not a little naively.
The afternoon is spent trying to find out when you will get your computer, when you will get your badge to let you in the front door, and when you will be doing some work. The answers do not come easily, but through toil and perserverance the results come in and are, respectively: at least a month, at least a month, and loud guffaws with one request not to swear. By the time you go home at 4pm you’re thinking one thing only: thank f*ck I left that engineering company!