Now, more than any time I can remember, this industry seems to be riven by serious fractures. Among these are short termism, a growing cult of youth, an overly optimistic faith in the ability of technology to solve all our problems and a partial abandonment of that moral rectitude that served us well for years.

Long term is the key phrase. The lack of long-term focus is the overriding problem. This problem might be laid squarely at the feet of the financial community whose fixation on quarterly performance rules out attention to long-term corporate health. However, that would be both cowardly and a misstatement. No doubt, the intense focus on quarterly performance is driven by the Wall Streets of the world but our adherence to that focus is not mandatory, although many might think it is. At times such as these, with year over year record profits, is it not much better to abandon the intense quarterly focus in favor of a viable, long-term development strategy that maximizes long-term return on investment and growth? And, if one were to find the management team that was willing to take this chance, what differences might it make? It might actually make a lot of differences. It might also repair a lot of the fractures in our industry.

What might happen to the growing cult of youth? I will be careful here because the influx of younger professionals will be the lifeblood of our industry going forward. What I fear, thought, is that the expectations being built up among young professionals by such things as inordinate starting salaries, extremely large signing bonuses and rapid promotions will not be sustainable. Not all of these young professionals will end up as a CEO or an executive VP. There are not that many positions available. Conversely, mature professionals may be more inclined to take a hike as they see young professionals sail past them in salary level and employee grade. And, don’t kid yourself that this is not happening. A long-term strategy might retain older employees to mentor, at respectable salary and employee grade levels, while encouraging young professionals to immerse themselves in the company and their sectors while climbing the corporate ladder. In other words, a long-term strategy might buy back the employee loyalty that has been lost — to both generations — through the sharp-edged management policies encouraged by quarterly performance metrics.

But what about our (in my opinion) overly optimistic faith in technology to bail us out of both the “big crew change” and the need to reduce overhead? Make no mistake — our technology is wonderful and it will drive much of the increased efficiencies in operations going forward. However, far too much extraneous and unusable technology is developed, or under development, pushed, in large part, by the quarterly mandate to maximize profits and reduce cost. A long-term strategy development strategy might enable a long-term technology strategy that integrated needs and technologies to avoid multiple re-inventions of the wheel. In fact, a good start at this has been made by US federal funding of the Research Partnership to Secure Energy for America who, along with industry partners, has a 10-year charge to coordinate upstream technology development.

And, what of moral rectitude? Short term, quarter to quarter pressure to increase financial performance has led to a lot of skirting the truth and to some outright criminal deception. These acts were undoubtedly perpetrated by those pre-disposed to such acts, in most cases, although some were carried out due to sheer desperation. The sad thing is that these acts seem to have been accepted as a viable, if shady, way to cope with the need to meet the quarterly numbers. If you haven’t seen this, you haven’t been looking. We are no more or less moral than previous or forthcoming generations. We have been forced to exist under a short term performance model that actually encourages dishonesty, a dishonesty that is largely impossible and almost completely impractical with long-term strategies.

Do I believe that the abandonment of short termism would solve all the ills of the industry? Absolutely not.

Do I believe that it would begin to heal the fractures that plague us? Absolutely. Would I have suggested that this was possible 5 years ago? No. Would I suggest that it is possible today? Yes, with the industry’s more than respectable profit margins no analyst in his/her right mind can logically suggest that today’s oil and gas companies be managed to quarterly performance improvement expectations. If there is a season of long-term strategy, it is now.

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