Customer Management Symposium: Perspectives and Insights
On March 27, the Jones Graduate School of Business at Rice University presented the 8th Annual Rice Customer Management Symposium 2015. Deputy Dean K. Ramesh kicked off the event, summing up the vital importance of the symposium as a forum to understand and intellectually enhance ideas about customer management. With over 200 attendees, the event merged thoughtful perspectives from business-school faculty and senior executives in the health care, real estate and financial services industries. Of the diverse audience half were from oilfield services companies such as Baker Hughes, Halliburton, Cameron, FMC, NOV, Oceaneering, Pacific Drilling and Noble Drilling, showcasing the strong impact that the recent energy initiative has had on the industry. Veteran energy industry leader and Chairman, President and CEO of National Oilwell Varco (NOV) Clay C. Williams gave the keynote speech. He has been CEO over a year and has held many executive positions with the organization since its merger with Varco in 2005, as well as with Varco prior to the merger.
A panel discussion of emerging entrepreneurial leaders from the Houston Business Journal’s most recent 40 Under 40 list followed. Moderated by Jonathan Harvey, executive director of Rice University Executive Education, the alumni panel brought together Brandon Houston ’09, principal, Trammell Crow Co; Charles Lusk ’08, founder and CEO, Onsite Dental Solutions; Michael Lowe ’07, president and CEO, OrthoAccel Technologies, Inc.; and David Rush ’06, senior managing director, FTI Consulting; for a conversation about building and managing businesses, teams and customer relationships.
The symposium concluded with the results of a study co-authored by Jones School professors Utpal Dholakia and Vikas Mittal. The Strategy and Corporate Performance in Energy (SCOPE) survey —spearheaded by the energy initiative at Rice — provides an empirical assessment of key strategic dimensions of company performance in the energy industry. Professor Dholakia’s award-winning research on the “mere measurement effect” has shown how the mere act of responding to customer satisfaction surveys changes customer retention, irrespective the customer’s ratings. Professor Mittal has published extensively on the psychological aspects of decision making including the effect of people’s emotional states on choice, ethical decisions, risk taking and similarity judgments.
Customer Focus: A theme for turbulent times
Williams’ keynote address highlighted the ability of oilfield service companies such as NOV to stay customer focused by continuously investing in technology and innovation. He cited four recent industry trends that will transform the industry by driving production and increasing safety: the progression of unconventional technologies, replacement of an aging rig fleet, build out of the deepwater fleet and development of floating production systems.
By thoroughly understanding its customers and anticipating their needs, NOV adopts purposeful innovation to create solutions that sometimes challenge the customers. “We serve customers that make the world better. That’s meaningful work. We believe in service above all,” he said. In this way, NOV is able to become a dependable partner in a high-risk, high-cost industry. Williams advised leaders from all industries to respond by “standing in the customer’s shoes and thinking about what they need.”
The 40-under-40 panel aligned on their perspectives on customer focus despite coming from different industries and backgrounds. Harvey asked them how important the time spent on cultivating relationships and dialogues with customers was to their company, and the response was unanimous. It’s critical.
“Sometimes, when a customer isn’t happy, they don’t complain, they just stop doing business with you,” Lowe said. “At OrthoAccel we pay attention to trends within our data and the composition of revenue line to proactively address it.” Rush added that at FTI it’s all about communicating with their clients. “Communications, status checks. We’re in the professional services business; we’re constantly understanding their needs.” Lusk went so far as to enlist a Jones School ALP team to “help us better understand and improve the patient experience” at Onsite Dental Solutions.
Discussing the results of the SCOPE survey, Professor Mittal remarked that customer focus was one of the three top drivers of overall firm evaluation in the SCOPE survey. “Clearly, the energy industry understands the importance of customers as a strategic priority. Yet, achieving customer focus is not a one-size-fits-all recipe. Even in the oilfield services industry companies such as Cameron, Halliburton and NOV have positioned themselves differently. While Cameron’s positioning is based on customer service, Halliburton’s positioning is based on logistics, and NOV is themed on innovation. At the core they are at parity in a lot of different ways, but they are also trying to differentiate in that one area,” Mittal suggested.
Change as the Constant
As Williams leads NOV through the latest changes in the energy sector, he explained, “It’s a cyclical business. It always has been.” NOV positions itself to adapt through customer focus, meeting their needs as they change in response to the industry dynamics. “We apply industrial technology and robotics to the oil field operations. We’re mostly known for making equipment, but innovation and service come together in that to serve our customers.”
The panel agreed that it was imperative to have multiple contingency plans in place to respond to a constantly changing environment. At Trammel Crow, Houston said, “Real estate is similar to the energy industry … on one project you may be working with 300 different companies. You have to have contingency plans and the ability to work through a problem to come up with solutions … that means constant feedback, looping in the investors and tenants.”
Lusk’s approach was similar. “We feel strongly, despite having a plan, that it’s really important to be ready for a hit. We need to be ready for those changes. We’re still a young company so we’ve set the expectation for a fast-moving environment.”
Realizing the dynamic and changing nature of the energy industry, the goal of the SCOPE survey is to provide a scientific and reliable way for industry members to benchmark their own strategic performance over time. Thus, the SCOPE survey is intended to provide a reliable, consistent and valid benchmark of the strategic approach taken by individual firms, industry-sectors and the energy industry as a whole. “Cross-sectional comparative data for different sub-units and longitudinal data for the same unit over time can be valuable to examine both from a strategic and implementation perspective. By consistently measuring company perceptions on specific dimensions, the survey will provide comparable information for strategic decision making,” said Professors Dholakia and Mittal.
People, People, People
The SCOPE survey captures what peers within the energy industry think about different companies in terms of specific strategy dimensions. “Conceived broadly, the survey is capturing a firm’s strategic reputation on different dimensions,” explained Professor Dholakia. Interestingly, employee management proved to be the second most important dimension, right after financial management. Results also showed the integrated oil segment was rated highest by respondents on most metrics and that refining consistently rated at the bottom.
The 40-under-40 panelists touched on the importance of hiring, developing and retaining the right talent. Lowe said they don’t invest and train people because they have to: “We do it to attract people. And to keep them. Every employee is an asset. Make sure you’re investing in your assets.”
Rush’s business, which deals with companies in distress, addresses the training of certain skillsets immediately. “We have internal and external programs for all levels of our professional services.”
A thoughtful approach to networking is also a must to make deeper and meaningful connections. The biggest thing for Houston is to “get out of your comfort zone. Start a conversation with someone you don’t know.” To Lowe, “Networkers who are really effective approach it with a what-can-I-do-for-you mindset. It’s a two-way street.” Lusk advises the networker to “find something that matters, something purposeful. Invest your time with people wisely, valuing quality over quantity.” Finally, suggests Rush, “Put yourself out there, outside your comfort zone. Find organizations and be active to help broaden your base. Don’t expect to make requests at initial meetings. Focus on developing relationships.”
Williams summed up NOV’s culture in this way. “We are a global enterprise. It’s important to our senior leadership to set up the organization for success. Business is the ultimate team sport. We try to cultivate a team at NOV.” The guiding principles for the NOV family? “Tell the truth. Be accountable. Have fun.” Both with their customers and their employees,” Williams said, “It’s essential to maintain that culture, while maintaining the entrepreneurial spirit.”
“By all accounts the symposium was a great success,” said Ankur Dayal, director of Energy Initiatives at the Jones Graduate School of Business. “The audience was intellectually engaged, and it provided a great opportunity to network and a forum for a thoughtful exchange of ideas. We thank all the speakers, participants and volunteers.”
For more information about the SCOPE survey, please contact email@example.com