Lessons from the Past

‘Reevaluate and Reinvent’ to Raise Performance

By Margaret J. Vaughan

Philosopher Jorge Agustín Nicolás Ruiz de Santayana y Borrás (aka George Santayana) said: “Those who do not remember the past are condemned to repeat it.”

How often have you heard that phrase, agreed with it, then continued to act the same way, in the same manner, and ended with the same outcome?

In 1984 the price of a barrel of oil cratered and the bottom dropped out of the oil industry. For Houston, a city that had a unidimensional business focus, this was catastrophic. Unemployment soared, foreclosures skyrocketed, savings accounts emptied, and the city and its citizenry struggled to keep afloat.

Companies that survived did so by reinventing their business models. They were more cautious in hiring, making sure that new hires could perform multiple roles well. They kept smaller offices, doubling the occupancy of each office. They paid down debt and kept a tight eye on the balance sheet. Companies learned to be lean and efficient.

It was a time of great worry. Competition was fierce so clients were treated like priceless and only children, which in some cases they were. Slowly we dug ourselves out of the hole. We asked God to send us another oil boom, promising that this time we wouldn’t screw it up.

Then things got better. As they did, we slowly drifted back to the old ways: lavish spending, bigger offices, empire building with layers upon layers of useless management, hiring and promoting incompetence, all the while genuflecting at the feet of the client.

Don’t get me wrong; I love my clients; always have, always will. But I worked in retail for many years and lived with the credo: “The customer is always right. Even when the customer is wrong, the customer is always right.” It was my job to steer the customer away from a pair of shoes that made her feet look like Fred Flintstone’s, even if she really loved them, to a more flattering pair, and do it in a way that made it seem like her idea. That isn’t easy.

Clients hire our services. They hire our expertise, our knowledge. We shouldn’t allow them to hurt themselves by buying the wrong pair of shoes. I understand that clients want to have a say in things because they are paying the bills and they may have had some previous experience. But they hired us. We know what is right, what is needed, and how to get it done. The client needs to learn how to let go, trust their suppliers, and suppliers need to earn that trust. We need to listen to each other. It is a partnership.

The Covid-19 pandemic, combined with the sudden and unprecedented drop in the price of oil, has set the oil and gas industry back to where it was in the mid-1980s. It’s going to force companies to reevaluate and reinvent because the business model is changing. Again. We and our clients can learn from the past to elevate performance. Or we can repeat our mistakes. Choose wisely.  

Margaret J. Vaughan has more than 30 years’ experience in all facets of supply chain management.

Image credit: Shutterstock

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