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Private Empire: ExxonMobil and American Power by Steve Coll
Published in May of 2012.
24 hours and 16 minutes is how long it took me to listen to the audio version of Steve Coll's Private Empire: ExxonMobil and American Power. That translates into 704 pages for all of you eyeball-centric reading people.
Why should a higher ed person invest a full-day of their precious time reading Private Empire? We already have too much to read and too little time. Choosing what we read is all about weighing opportunity costs.
The reason I believe that Private Empire offers a good return-on-time (ROT) is that we all can learn a great deal about our business from the energy business.
I developed this belief after reading Daniel Yergin's fine book The Quest: Energy, Security, and the Remaking of the Modern World. (Another big book at 29 hours and 31 minutes).
Where The Quest gave us a 10,000 foot overview of the entire energy industry, Private Empire takes us to ground level in describing the inner workings of ExxonMobil.
Starting with the Exxon Valdez spill in 1989 and ending with the Deepwater Horizon spill in 2010 (which was BP, not ExxonMobil), Coll illuminates how the world's largest company (with $452 billion in revenues and $41 billion in profits in 2012) actually works.
I'd argue that there are 3 areas that big energy and higher ed share some commonalities, and where we can learn from how companies like ExxonMobil operate:
1. Long Time Horizons:
One of the key takeaway from Private Empire is just how capital intensive oil discovery, recovery, and refining has become. ExxonMobil specializes in multi-billion dollar project that take decades to pay-off. Planning is undertaken on decade long time scales.
In higher ed our bets might not be as big as those of big oil, nor our capital intensive projects as large, but we also base our planning around timeframes of years if not decades. Our decisions to build new classrooms, labs, dorms, or student centers are based on what we see as our needs both today and in the many years that these facilities will be utilized. Developing a top program or department takes patience and a commitment to long-term investments. Developing capacities in new techniques, such as blended or online learning, takes investments that may not pay-off for many years.
What I think we can learn from Private Empire and ExxonMobil is that long-term thinking is not a luxury. We need to be spending significant time and resources preparing for 2020, because if we wait to 2018 that will be too late. ExxonMobil has developed a corporate culture that makes decisions based on long-term thinking. We would do well to understand how this sort of long-term orientation is developed and nurtured.
2. Complex Organizations:
Do you think your organization is complex? ExxonMobil employs over 80,000 people worldwide. This does not count all the contractors and partners that ExxonMobil employs and manages. The coordination of work necessary to find, recover, ship, refine, and sell oil is simply mind-boggling.
As Coll amply documents, there is much about ExxonMobil's management culture that we would not want to emulate. The company has a history of being insular and arrogant, unresponsive to non-mainstream views and slow to listen to outsiders and critics. We can learn some negative lessons from ExxonMobil, but I also think that we can learn some things about how to get an entire organization pulling on one direction. At the very least it is worth listening to how the leaders of a company like ExxonMobil go about pointing their organization towards a common set of goal, and to then motivate employees, partners and contractors to consistently execute on those objectives.
3. Potential for Disruption:
Will either ExxonMobil or the today's incumbent higher education institutions exist in their current form in twenty years? Are there technological, social, and political forces that will fundamentally alter how we run our businesses? Do we face our own equivalent of peak oil or climate change in higher ed? Is there an analogue to renewable energy in post-secondary education?
One thing that is clear from Coll's dissection of ExxonMobil is that the world's largest oil company has not taken the lead in figuring out what comes after oil. The reasons are complex, and have everything to do with the sheer profitability of the current business and the inability of a highly productive organization to contemplate changing a system that has worked so well. Our next energy source will probably not come from ExxonMobil.
Will whatever comes next in higher ed be developed by our currently dominant group of higher ed institutions? Are we like ExxonMobil, with too much to lose from a switch from the dominant paradigm of how we run our business?
Private Empire is a very long book with very few wasted words.
I hope that you invest the time, and come back and discuss what you think ExxonMobil has to teach us in higher ed.
What are you reading?
