Business Longevity: Reflections on 60 Years over 7 ContinentsBy Niels Versfeld | Thu, 02/24/2022 - 15:00
Business longevity is difficult in any industry and any country. Since 1965, the average life span of an S&P 500 company has fallen from 32 years to just over 21 years1, while for small businesses, that drops to 8.5 years2. This year, Simmons Edeco is celebrating our 60th anniversary. In light of this milestone, we thought it was appropriate to share our reflections on the experiences and lessons learned over the years.
1. You will have to evolve. Call it pivoting, innovation, disruption, or strategic planning; either way, the business must change over time. This will include your business model, your customers and even your locations. Simmons Edeco started in Canada in 1962, but by 1975 had moved internationally, responding to customer demands. Not only have our customers changed over the years, but the businesses we have operated have brought us to the seven continents of the world. Each continent has provided valuable lessons for our business.
2. North America: Stick to your values. From our roots in the Canadian oil field to our current operations in Mexico, Simmons Edeco is committed to sustainable global energy solutions. Not only have our services included oil and gas customers, but also minerals, geothermal, water wells and energy storage. Since we started operations in 1962, global demand for energy has more than tripled3. We believe this demand for energy will continue to require responsible service providers and financers.
3. Europe: Listen to your customers. How do you stick to your values, yet evolve? For example, by listening and responding to our customers working on a project in Albania, we went from having zero local operations to being one of the largest employers in the country for over a decade. Our operations evolved from drilling services to include service rigs, wireline and engine repair, all responding to our customer needs. In 1996, we purchased a drilling and services company named Edeco, which was established in 1931. Responding to customers in the UK, the company moved from rig manufacturing to on-shore drilling and finished in off-shore well-head maintenance. Your customer’s businesses will change, and your business needs to change with it. In this case, we even changed our name from Simmons Drilling to Simmons Edeco to reflect the change.
4. South America: You can be almost anything, but you can’t be everything. Simmons Edeco has a long history in South America and Central America, (OK, geologically part of North America), often working through partners or sister companies. Simmons Edeco partnered to conduct oil and gas service work in Ecuador, leveraging company contacts. Similarly, we worked with engineering partners for geothermal work in El Salvador and Guatemala. Beyond that, Cordax Evaluation Technologies, a sister company of Simmons Edeco, is currently providing formation evaluation technologies in Colombia. While your business must evolve, you must have the courage to know when a business needs partners or even its own culture.
5. Africa: Opportunities exist where others don’t see them. Early in Simmons Edeco’s history we worked with UNICEF to supply water well-pumping units in Sudan. Later, in 2007, Simmons Edeco safely conducted a multiwell exploratory drilling program in Angola. For Simmons Edeco, the ability to take on projects in areas where infrastructure and services are limited has been at the core of what has made us successful. As a small operator that maintains international standards and top-tier health, safety and environmental practices, we have been able to maintain the flexibility to work with local operators and communities wherever we may find them.
6. Asia: No project or country is the same, but we are all the same. We have worked in Oman, Kazakhstan, Vietnam, and Indonesia, providing services from drilling to well testing to geothermal operations. Over the past 60 years, our business has operated in vastly different cultures and environments. Respecting and integrating into these different cultures and industries is critical. However, in the end, we are all human. Truly understanding this has allowed the staff within the company to build relationships with people throughout the world, regardless of nationality.
7. Oceania: Respond to your stakeholders. I know that I said Europe taught us this; however, Oceania reminded us that you must consistently respond to not just the customers but also the other stakeholders in the project. While Simmons Edeco worked in Australia and Papua New Guinea, we could never build the long-term relationships with customers we strive to create. In these cases, another competitor was more responsive to the customer and local stakeholders. If you don’t respond to your customers and the communities where you operate, someone else will.
8. Antarctica: Be creative! Through an affiliate of Simmons Edeco, LiftAir, the business provided helicopter services for researchers and expeditions to Antarctica. There will always be problems that need to be addressed and adversity to work through, but safe solutions can be found if you are willing to go where most won’t.
While many of these lessons are common sense, the ability to balance all of them in the face of significant change in the energy industry is difficult for any business. We believe the energy industry will only continue to grow in importance for the next 60 years. The challenge is for all of us in the industry to continue to evolve our business models to meet the demand for more energy. For Simmons Edeco, that means working even closer to our customers and introducing financing options for programs. What will you do to ensure your business lives past 60 years?