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Lufkin Energy Solutions Case Study
Strategy, organization, talent, and accountability leadership transformation
Situation
A 100-plus-year Texas-based company and maker of artificial lift technologies (used on oil wells to drive oil to the surface) and other industrial equipment was just moving beyond the $1B revenue mark and had made a number of acquisitions to fill out its product-service offerings. The company had recently hired a number of mid-to-high-level recruits in order to carry the company well beyond the $2B mark.
The CEO and board felt that a much more sophisticated talent management and succession-planning system was required to support the HR requirements of their aggressive growth strategy.
They also determined that a more highly disciplined approach to organizational analysis, design, implementation, and leadership was necessary to compete in their newly expanded sector of oil-and-gas automation. Many of the acquisitions were still operating as separate silos, often competing internally. This undermined most of the intended synergies required for moving from a products-based strategy to a solutions-based market strategy.
Solution
The ambitious three-year project had multiple phases:
- New structure and process design that supported fully integrated, accountable “solutions” generation and delivery;
- Comprehensive organizational and talent assessment;
- Design and implementation of a fully requisite HR and talent-pool-development system, including succession planning; and
- The training and deployment of value-adding, accountability leadership practices, including coaching and mentoring.
Over 1,000 of the company’s 4,500 employees were assessed by cascading manager-subordinate team “gearing” sessions, facilitated by Strategic Organization™ consultants. A highly sophisticated succession and career-development plan was created, using the assessment data to identify underutilized, highly effective, high-potential managers and engineers with potential to fill senior roles over the next five-to-20 years.
Value Provided
The new effectiveness appraisal processes supported a much clearer and more accurate picture of which employees were successfully “keeping their word” and “earning their keep” and which were not, leading to immediate actions to mitigate the identified issues.
As for organizational structure, the consultants helped the company to develop an evidence-based design strategy to realize the full potential, particularly using a business-unit model to help integrate new acquisitions into strategically aligned business portfolios.
The company was so successful 30 months into the Strategic Organization™ transformation project that it was purchased for 38 percent over share price by a global industrial company. The multinational conglomerate agreed to acquire the company for $3.3B.