What does Andarko Petroleum do?
Question: What does Anadarko do?
Jim Hackett: It is a exploration and production company, it is called an independent exploration production company. Unlike a Shell or a Exxon Mobil that would have refineries and petrochemical facilities for making plastics and carpeting and shoes for basketball, this is purely a company that goes and tries to find new resources and develop those resources. So, we will hire people to go to drill our wells, we hire people to actually provide the fluids for that, we are basically more of a field operation for our production and in office operation for different forms of we call an intellectual capital which would be our geoscientist or engineers our treasury folks or marketing folks, in terms of who we sell to is, it is really a wholesale commodity and we will sell to a number of the majors, who have refinery operations, because all of our crude oil has to be if you will transform to a more useful product like gasoline or Jet fuel and we will sell natural gas to a utility for example or a major customer an industrial customer and so we don’t actually use any of the products that we actually produce except where we use it for energy consumption and the facilities in which we produce it from. So, for cooking or for again making plastics, we will sell natural gas for heat, for homes in the winter.
Question: How did you come to lead Anadarko?
Jim Hackett: Well for one is I am not a good example of anybody looking out for you, but God because, the way I get in the oil, big gas business was actually when I was getting out of college, I had remembered a conversation I had back in 8th grade with a girl friends father, actually in the Chicago, where, we where talking about what I was going to study in the high school, when I was going to study Russian, he said “well, if you ever want to use your Russian, come to work at Anadarko” and I never forgot it and so when I went to try to get a job after college I went to interview with Anadarko and through the interview process I was lucky enough to secure a job and then I asked to of course the day after I arrived I asked well can I go to Russia, my first trip was actually to Egypt, I was going on a Audit there and they said “we can’t go on” I said “what happen?”, they said “we can’t get you out.” And I said “Really, why?” and they said “well, because we don’t have any operations there and we are in a cold war” and I went “oh! My God" and that is how I got in the oil and gas business, so you do have to get lucky occasionally, it turned out I absolutely loved the energy field and ultimately I knew I had to go back and get an MBA, which I did and then I went back in engineering, but as you progress through different sets of your life I think in a career you often times have a goal for a set period of time, and I went to the air force academy, because all I ever wanted to do is fly, my dad was army air co-pilot, my eyes went bad and the war ended in Vietnam, so then I had to change with my goals, then I became to do something with my Russian, turns out the Russian wasn’t the key, it turned out that being in the oil and gas business and using finance and engineering skills were key, they really gave me passion and as you went along, of course net these wonderful people who would help you along as long as I think you are good person and you try hard and you actually care about competence and meritocracy and so you eventually, I think for all of us if those basic ingredients are there you tend to be a bit more successful and you ever dreamed you would be. Now, I think the definition of success is at the heart of actually answering that question about leadership, because there is a great quote that I think Martin Luther King had about, it doesn’t take any kind of pedigree to be a leader, because anybody who serves others can be in a leadership position, you don’t have to have a doctor, you don’t have to a medical degree and certainly you don’t have to have a college degree, you don’t certainly have to have an MBA, but we all do these sorts of things, the thing you got to keep in mind is if you really want to be successful, you have to figure out to do, you have to do something, bigger than yourself somebody is not focused on your own self interest, if you chase money, you will be miserable, you will have end up making more than you ever dreamed off, if you do things right, but the key is never to chase that dream, that dream of money and the key is to chase your dream that is actually about something other than yourself and I think you will end up having a great experience both in terms of your career, as well I think you will become a leader if you adopt that mentality.
Question: How do you lead your company?
Jim Hackett: The key is for us is to make sure that you are always thinking about is the strategy the right strategy for the enterprise to adapt to the environment in which you are in, and when you are responsible for over 4500 peoples lives that is something that really-really bothers you, it should if you are a good leader I think, and it certainly bothers me as are we pursuing the right path and is the management team that is surrounding each other in the case of the number of us who are in the management team, is that are we doing the right thing is to challenge our own thinking and hopefully all of us are different than each other, because if we are the same we probably don’t need each other and in that process of being different from each other, do we share at least the same values about how to do business, do you do it right. Yes you do, and it is about making very hard decisions about peoples lives and about what the direction of the business are to be, and so from my standpoint, the first thing is making sure you are pursuing the right business model, that is the best protection for the peoples livelihoods that you are responsible directly for, that is also with the best protection for your shareholders investment in you and we have a philosophy at our company where our first objective is to maintain well, our second objective is to grow well, so we should never do anything that puts the business at risk or the concept of maintaining well in order to grow well and while your shareholders may not be always happy that you are growing quickly enough, at least you won’t understand that horrible judgment day of actually destroying wealth some day and so from our perspective if you have the right philosophy about doing the right things in the right way, you surround yourself with good people all the things that we read about in books and you end up struggling through this very difficult issue of how do you project the future environment in a business it is unlike of lot of other businesses and where are investments are 20 to 30 years forward in terms of what we decide to go and do, if you do that right, you will end up being successful and retaining the maximum amount job as you can and growing them maximum amount jobs, you possibly can as well.
Recorded On: 3/24/2008