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Business Insight Newsletters

March 2008 | April 2008 | May 2008 | July 2008 Want to Contribute? For the benefit of the group - share your insights on strategy and execution.


HSF Contact Information
Dale Wilkins, Administrator
Dale@amchouston.com
713-839-0808
Newsletter - July 2008
Dear HSF Members and Guests:
The Houston Strategic Forum’s vision is to gain regional and national recognition as the preeminent organization for practical strategic insights. We are taking a huge step towards our vision in October.

On October 2nd, 2008, we will host the Houston Strategic Conference. The theme of the conference is “Houston Growing Globally.” Four of Houston's top CEOs, representing organizations that have a global footprint and industry sectors that are the strength and vitality of the $400 billion Houston economy will share their insights about global opportunities, challenges and strategies.

On July 15, we are excited to host Mr. Gary P. Luquette, President, Chevron North America Exploration & Production Company. We look forward to seeing you all on Tuesday, July 15 at La Colombe D’Or and on October 2nd at the strategic conference. Thank you.

Best regards,

Ravi Kathuria
President, Houston Strategic Forum
President, Effective Execution, Inc.

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Business Insights Newsletter - May 2008

The Next Trillion Barrels of Oil – Tim Probert - 15 May 2008 Houston Strategic Forum Luncheon

Tim Probert, Halliburton’s Executive VP Strategy and Corporate Development, gave us his views on the new competitive landscape that we will see during production of the world’s “Next Trillion” barrels of oil. Tim spoke for us at the La Colombe D 'Or last month and shared a variety of insights on Halliburton and our challenges ahead.
Tim categorized the challenges into five groups – the first three are specific to oil & gas - the last two are common to any company with global aspirations:
Access to high quality oil and gas fields will be more difficult. With over 85% of the world’s hydrocarbons outside of North America, activity is definitely shifting. The growing emphasis on “resource nationalism” forces the traditional Integrated Operating Cos (IOC’s) to pursue more difficult reservoirs. Independents must be “light on their feet” and are often focused on the mature fields that the IOC’s have finished with.
Smaller fields requiring more complex wells are left for development. This is causing a dramatic increase in the CAPEX to reserves ratio. Technology advancements are required in three areas to commercialize these assets:
  1. Improved modeling to reduce risk/uncertainty;
  2. Improve the recovery factor; and
  3. Unlock “challenging molecules” of energy source trapped within other forms of hydrocarbons.

New technologies are required for unconventional reservoirs (tight gas, CBM, heavy oil, oil shale, etc.). The technology is coming but heavy oil production comes with a significant carbon footprint; the industry needs to address the issue.
The homogenous supply chains seen in North America create a pro-business environment. A global infrastructure with a similar support mechanism is required to profitably develop the smaller, more difficult markets throughout the world.
Tim spent the bulk of his talk addressing the need for global talent to compete during the “next trillion”. With tens of thousands of new personnel required in the next few years Tim sees a few winning strategies in the “War for Talent”.
University partnerships are required to target and attract new talent into an often misunderstood industry. Training networks and mentoring are urgently required to supplement traditional learning and to provide “on-the-job” experience to capture the intrinsic knowledge of our older workers that are so near to retirement. Companies need to focus on recruiting leadership – not just hiring people.
Time and effort must be devoted to a “workforce transformation”. One aspect of this is real-time technologies with central support centers that provide the infrastructure to take the data to the expert. These knowledge management efforts will help to prevent “knowledge silos,” but a cultural change is required to capture the value here - and become a truly global company.

David A. Gray
Sr. Consultant, Decision Strategies, Inc.
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Managing Exploration& Production Resources - The Momentum Continues

Mr. Gary Luquette, President of Chevron North America Exploration and Production, is scheduled to speak to us on July 15th at la Colombe D ‘Or. This is a great opportunity to understand a little more about our energy future.
It is amazing that the huge amount of fossil fuels that the world consumes everyday was formed more than three billion years ago from animals and plants, a supply which could significantly diminish this century. Oil and gas has been the fuel of choice for several generations with exponential growth of demand around the world. Some energy experts say that oil and gas production has peaked already, and unless more sources are discovered, the price of oil and its demand will continue to rise.
The fact that the U.S. alone consumes more oil and gas than any other country leads us to search for conservation measures to stretch the remaining barrels over this century. The U.S. has yet to meet its own demand with its own supply. One factor was legislation in the 1980s that made it cheaper to import oil than to produce it here.

Solutions are longer-term
To some it seems obvious that the rate of growth of demand for energy will have to diminish. Alternatives to conventional energy are necessary but their present impact is relatively small and will take years to meaningfully displace conventional energy. Energy is a long lead-time business which presents us with the challenges that we are currently facing.
Even as we look for conservation options, the assumption is that exploration and production can maintain the current level of supply. Factors such as ageing and corroding rig fleets and pipelines, outdated refineries, shortages of educated scientific talent and semi-skilled manual labor are some of the obstacles that must be resolved just to maintain status quo. Private equity and venture capital firms are actively funding start-up companies to support new technologies. Most of the larger, complex exploration and production projects are internally funded by the larger corporations.
The surge in drilling in the Gulf of Mexico deepwater results in more complex, costlier and riskier operations. It costs about $250 million to complete a single well in 40,000 feet of total depth in federal waters. This can take three to six years of preparation before production. In 2006, research indicated 400 billion barrels of domestic oil still in the ground and technically recoverable.
Worldwide exploration and production expenditures are forecast to increase by 20% to a record $418 billion from $349 billion in 2007. There is substantial acceleration in North America. The extreme volatility that has characterized the market is expected to persist. As fuel protests break out across Europe, pressure is building on world leaders to address soaring energy costs. As reported by the U. K. government, the rise in oil prices is not driven by speculators but by demand rising faster than supply.
One cannot turn on more supply with a flick of the switch right now. I hope we hear a little about the June 22nd oil producer’s meeting in Saudi Arabia where these issues will be on everyone’s plate.
No doubt the American oil future pivots on our exploration and production companies and their efforts to balance our demand with supply. Long-term independence from foreign sources of oil and gas is our most sustainable and sound strategy for our resources and our economy. Mr. Luquette’s words will have great interest for us all. On local, national and global levels we need discussion and cooperation to realize the best possibilities for our short-term, our mid-term and our long-term energy future.

Maury Sklar
HSF Board Member, former President
CEO and the founding member of HSF

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Business Insights Newsletter - April 2008
Dear HSF Members and Guests:

The mission of the Houston Strategic Forum is to help its members gain practical insights into strategy and execution in the large organizations. Towards that end in March, we departed from our regular format and hosted a panel, on Sales Strategies. The event generated standing room only attendance with a couple of attendees having to sit at the buffet table. We received a chorus of positive feedback about the insights gained from the sales executives who served on the panel.
This month on Tuesday, April 29th, we try another new and exciting format that realizes our mission of generating insights. The event is a Business Strategy Face-Off. In this event, attendees will challenge and push their strategic thinking, collaborate with team members at their table, and present a compelling strategic direction for the company represented in their case study to their Board of Directors, played by the audience, who will pick the best team.
All of us get caught up in the weeds. Our goal with this event is to stir up your thinking and business approach – get real practical ideas that you can take back to your companies and make a huge difference. We look forward to seeing you all at the event. It is your engagement and encouragement that makes HSF events so successful. Thank you.

Best regards,
Ravi Kathuria
President, Houston Strategic Forum
President, Effective Execution, Inc.
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Summary of March Luncheon: Panel on Sales Strategies
On March 27th, HSF hosted a panel of high-profile sales management executives. The topic of discussion was Major Account Sales Strategies.
Sales strategist and management consultant, Ravi Kathuria, who also serves as President of the Houston Strategic Forum, moderated the panel, and set the stage for the audience by outlining the components of a sales strategy. He shared that sales strategy is determining:

  1. Sales Volume, Deal Size, Sales Cycle-Time and Success Ratio
  2. Which Prospects/Prospect Groups to Focus on?
  3. Which Product/Service Offerings and sales message to lead with?
  4. Lead generation strategy
  5. Sales Channel – Direct sales force; Internal/web sales; External Alliances;
  6. Top Sales Drivers

The big hole in most sales execution is the measurement of leading sales indicators, starting with the sales pipeline. This needs more emphasis in most organizations. Yet the majority of the audience voted this aspect as the one of least interest.

Panelist, Sanjaya Sood, Global VP for Schlumberger, has an extensive background from being CEO of a sales automation software company, to leading strategic initiatives and business units for Schlumberger that have a profound impact on advancing the use of technology in the oil and gas sector. He shared his philosophy on sales and what comprises sales strategy to him:

Philosophy:
  • The current needs as well as the lifetime needs of the customer.
  • Acquiring new customers costs 3 times more than retaining existing customers.
  • Sales is a management responsibility led by an executive.
  • Measure, measure, measure, all aspects of the sales cycle.

Sales Strategy:
Understand the sales cycle. Sanjaya prefers a longer but controlled sales cycle, adding more predictability. He spoke of “Farming” as an undervalued expertise to expand major accounts.

Sanjaya explained there is a very detailed book at Schlumberger that thoroughly defines a repeatable sales process. This becomes necessary and valuable with the amount of personnel changes that a global account manager deals with.

Sanjaya said Schlumberger’s success is due to their comprehensive strategy combined with long and deep relationships with customers. Some companies have been customers of Schlumberger for decades. His sales staff knows all the players in each client company and maps a plan for regular interface.

How do you hire a good global account manager? Sanjaya prefers the sales consultant with the longest proven relationships. This may not be the top revenue generator, yet.

Panelist Monisa Cline, Global VP of Sales for Continental Airlines, oversees $6 billion in annual sales revenue. She emphasized that selling a service is vastly different than selling a product. Key elements of major account sales strategies:

  1. Know who your customers are and how they buy.
  2. Your sales model should mirror the customers’ organization, operations and culture.
  3. Create a sales plan.
  4. Devise incentives for all concerned.
  5. Measure everything. What gets measured gets managed.

Continental focuses on what they can control: consistent, clean, safe and reliable air travel with the youngest, most fuel-efficient jets.

Continental has 50 % of their operations international and a worldwide sales force. They believe in being where the customer wants to buy. Sales revenue will grow for Continental because they: mine data, measure performance, conduct customer reviews, measure and act on information quickly.

On an individual level Monisa cited the Sales Executive Council survey results for sales drivers:

  1. Be Prepared. Thoroughly research your client and consider every outcome.
  2. Face time throughout a client company deepens relationships.
  3. Understand your sales cycle. Work through RFPs quickly or avoid them.

Monisa addressed sales strategy in a recession: Simply outperform the competition. Be better than all others in your market. Define what your customers want and give it to them. Avoid selling just the services you prefer. Be responsive to the marketplace.

One question to the panel asked about strategies while playing golf with clients. Sanjaya shared his favorite strategy: always lose at the end by exactly one dollar. There were several probing questions from the audience, which received insightful answers from the panelists. This was a very valuable discussion which elevated the understanding of sales strategies for major accounts.

In summary: measure, measure, measure – to manage sales indicators. Know your clients inside out, and deliver beyond their expectations.

Kathy Schenck,
Business Insights Committee, Houston Strategic Forum
Principal, Warwick Search Group
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April Event: The Business Strategy Face-Off
What’s going to happen on April 29th at the HSF Business Strategy Face-Off? You will engage and exercise your brain in a casual, exciting competition with fellow attendees. The stakes are high (two Continental Airlines tickets and more). You, the audience will use the wireless voting cards, and elect a clear 1st, 2nd 3rd place winner.

This type of competition has a clear history around here. In our sister city, Austin, the Moot Corp Competition started 24 years ago at the University of Texas. A new-venture, business plan competition, it involves teams from 11 major universities overseas, and all the top schools in the US. The judges are successful entrepreneurs, venture capitalists, accountants and lawyers. The teams compete for a cash prize and they get funded, quite often as a result of the exposure in this competition.

The Rice Alliance business plan competition is just as big an event, here in Houston. Thirty-six of the top MBA/graduate schools from around the world present business plans in front of a judging panel of over 170 venture capitalists, investors, and business executives. The first prize is over $350,000.

Our Business Strategy Face-Off is not quite as rigorous, but just as interesting, you can be sure. Three things happen at events like this:
  • You will brainstorm a number of ideas.
  • You pull them together into an integrated solution with your team.
  • You will be exposed to scores of ideas in a brief, fun, focused timeframe – and there’s a great chance that one, or a few of these separate ideas are exactly what you needed to hear, to solve a major business challenge in your life.

See you there!
Jeff Linder
COO, Houston Strategic Forum
President, JBMA Inc. (Marketing & Advertising)
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Business Insights Newsletter -March 2008
Dear HSF Members and Guests:

I hope you’ll had a wonderful spring break. We have an exciting event for you on Thursday, March 27th, on Sales Strategies that will be provide valuable insights. Most of us are familiar with strategic planning and strategy formulation for the whole enterprise. However, sales specific strategies are an area that we probably do not hear about as much.

The March event is a panel discussion on major accounts sales strategies and sales execution. What comprises sales strategy and sales execution? Which aspects help increase success ratio and reduce cycle time? How big an impact does a well-defined sales process generate? These are only some of the questions we expect to discuss and gain insights from our three distinguished panelists – Monisa Cline, VP of Sales, Continental Airlines, Trey Shaffer – Partner and Global Key Director for South region, ERM and Sanjaya Sood, Global VP, Schlumberger.

This newsletter brings you two articles – the first by Jeff Linder on our February event when we hosted Dr. Peter Traber, President and CEO, Baylor College of Medicine and the second article by Earl Hersh, Director of Business Development, Gainer Donnelly and Desroches.

At the beginning of the year we had promised to continue to create more value for you. We introduced the real-time survey response technology to increase your level of interaction. March’s panel event is another initiative to increase value by generating insights around sales strategies. We, the volunteers of HSF, look forward to seeing you all at the March event. It is your interaction and engagement that makes HSF events hugely successful.

Best regards,

Ravi Kathuria
President and CEO, Houston Strategic Forum
President, Effective Execution, Inc.
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Last Month’s Luncheon
Dr. Peter Traber, President, CEO Baylor College of Medicine

We heard great insights into a huge strategic issue, health care innovations. Don’t forget why this is strategic to every business person in attendance: it is part of the definition of all of our success, namely quality of life. You won’t forget it next time you need it.

Dr. Peter Traber recommended a book and included some content: “Who Killed Healthcare?” By Regina Herzlinger. This was good background on the topic of the day. We are currently looking at low value for our healthcare dollars in the U.S. -- uneven quality of care, job lock (don’t change jobs because of benefits), uninsured, underinsured, etc.

The debate rages on between insurers, hospitals, policy makers, congress and employers. Curiously enough, the patient/consumer is virtually forgotten in the debate.

It is interesting that computers have come down in price to approximately half of what was paid 10 years ago. In the same timeframe healthcare has virtually doubled in price.

This author’s solution, passed on by Dr. Traber is simple in concept: empower consumers with money and information. This would be consumer-driven healthcare. The government should protect the poor, prosecute fraud, enable transparency and get out of the way.

This would bring about true innovation – like the polio vaccine making iron lungs obsolete. True innovation focuses on Value for the patient/consumer and nothing else. Baylor College of Medicine is an example institution for fostering this kind of innovation.

Dr. Traber introduced the concept of Personalized Medicine. This is a very exciting direction for his organization, and for us all. The difference between today’s medicine and this new way of thinking can be thought of as: today is “one size fits all – trial and error” medicine; versus this new direction of “the Right treatment, for the Right person, at the Right time.”

Personalized Medicine is now possible because of better data, better information, better collaboration, and advances in genetic mapping (understanding relationships at the genetic level). This will affect healthcare across the entire continuum from prevention to treatment.

Here is how Baylor’s mission and brand figure in – draw three intersecting circles, label one Research, label another Education and the third, Patient Care. Personalized Medicine is the intersection of all three circles. Their mission: “to advance human health through the integration of education, research, patient care and community service.”

Thanks for everyone’s help in bringing together this meeting where we heard important insights and traded ideas with such a knowledgeable source.

Table Discussion:

The table discussion question for the audience was “What are the three most important elements to be changed in the US healthcare system?”

There was great variety in audience answers, and many specific ideas as well. Dr. Traber focused on four categories he heard from us:

  • Elimination of Fraud
  • Improved Triage (the right resources at the right place)
  • Access to care
  • Insurance Reform.
He showed great interest in the subject of community clinics set up for treating colds and flu and lessening the burden on more critical patient treatment facilities.

He asked the audience:
  1. Have medical innovations been a major contributor to the increasing cost of healthcare? “Somewhat agree” was a major answer. He said the healthcare industry must focus on “true” innovations rather than “marginal benefit” innovations. Another drug to address heartburn falls in the category of “marginal benefit”.
  2. Is there enough research going on in healthcare right now? A majority did not think so. Did you know that only 5% of total healthcare expenditures are currently for research and development?
Jeff Linder
COO, Houston Strategic Forum
President, JBMA Inc.
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A CPA Firm’s Interest in Major Account Sales Strategies

We are going to hear from accomplished sales executives on the 27th of this month at the HSF luncheon. Effective sales strategies are attractive to any organization, large or small, for many reasons: market visibility, market ownership, thought leadership and revenue generation.

We all have the same challenges here: non-strategic accounts fill up capacity and can stand in the way of attracting and retaining strategic accounts.

Having these in your client base means growth by design and not by chance! A disciplined growth strategy is, after all, how our clients grow their businesses whether they are a trucking company, software, manufacturing, distribution or services.

What are the different ways to know if a prospect might be a key account? In our firm we keep a marketing focus on those services we provide that are absolutely the highest value. When we match these capabilities with a short list of prospects from a broad and deep knowledge of our target market, the key accounts become obvious.

How do you best answer the GO/NO GO question as early as possible? This is extremely important since going after these accounts often consumes major resources. How do we develop an organizational “feel” for this whole process, and research and collaborate and plan together. What are some good tactics that work at closing (proposals vs. engagement letters, etc.)?

I think we’re in for some good perspectives on this important subject. Let’s show up and bring guests and provide the great input, questions and discussion that our monthly meetings have become known for!

Earl Hersh
Member, Houston Strategic Forum
Director, Business Development
Gainer, Donnelly & Desroches, LLP