Between 2015 and 2022 the oil and gas business went through a particularly difficult downturn according to our CEO.
Coincidentally, our CEO started his tenure immediately before this period and he is ultimately responsible for a large overall loss in his near 10 years in position.
If he is going to stay (hopefully he and the CFO will be removed) there needs to be a fundamental reorganization in the company.
The name National Oilwell Varco was dropped in favour of NOV to remove O&G synonymity yet as a company, there are 3 segments with O&G names even though there are plenty non oil and gas products and services within them. Further, there are overlaps, friction, challenges and competition between segments in multiple areas.
There are still around 20 Presidents in NOV and in finance there is still the madness of a Finance VP reporting to a Finance VP, reporting to another Finance VP who then reports to the SVP Finance VP and each of these will be taking large ICP’s, Share Options etc, sit on business class seats when they travel and so on.
The organization needs significant change and there are so many ways it could be done.
For example, why not pull engineering, in to one place to collaborate and share info directly and have market pointed businesses located after them with product line between. To give one example, NOV renewables, NOV Rig Equipment, NOV Drilling and P&A, NOV Dats Services and other segments for other areas we play in.
Within NOV Drilling and P&A you pull together businesses that focus on the drilling and P&A operations. By doing this you negate the need for President positions and the usual array of Sr VP’s and VP’s. Having Tuboscope, Grant Prideco, Downhole, Reed Hycalog, DDT and Wired Drill PIpe Services together if done correctly, would give customers a better idea of capabilities and it would mean bundles of extended services are more achievable.
Within NOV Rig Equipment you include the parts of the business units that deploy surface equipment on rigs and get rid of the infighting where people are trying to justify their product and therefore position when there is something similar elsewhere within the company.
Look at centralizing procurement to take advantage of being a large company. After all, large discounts are given based on large volumes. As things are, NOV don't even buy intercompany from NOV more often than not as they don’t understand the intercompany selling process and don’t know that NOV can actually supply things they are buying from outside the company.
Stop VP’s and above flying around the globe for 1 day visits on Business Class seats which cost tens of thousands of dollars.
I could go on and on.
When people invest money, they expect risk to get reward. You have to spend money to make it.
This usual way forward of cutting people to make profit doesn’t work.
Investors wouldn’t dip in to a company that follows the insanity leadership of doing the same thing over and over and expecting a different result based on a strategic continuation that has resulted in almost a decade of dire performance.
Lastly, the CEO needs to stop blaming everything else, take ownership and responsibility and do the right thing if he isn’t going to be removed - step down.
It’s fairly obvious there is a bubble that the top level folk live on and they don’t realize what is really going on at the sharp end because they get the filtered version through the multiple layers of unnecessary management who are each trying to justify their position continually.
One thing is for sure though. $15M could be saved straight away and negate the need for the inevitable next step after VERP which is when the NOV “family” live in fear (again) of the potential of being pulled in to a room and being told that they are really just numbers on a spreadsheet and that they will shortly end up as “Presence Unknown” on internal systems.