STORY INLINE POST
Q: How did the events of the last two years reshape KLB’s service offering?
A: There have been two separate events. Firstly, COVID-19, which in truth has not really affected the overall activity. KLB’s projects kept running throughout the pandemic and we even acquired new clients. However, the 2021 Outsourcing Reform did have a major impact on our business, as many clients were forced to rethink their outsourcing strategy. We, in turn, had to reinvent our services. The initial paradigm of the reform was beneficial since many companies were not respecting their social responsibility or regulations. However, the reform’s negative side was that it shut down operations coming out of the pandemic. In recent months, business is looking up again as we help our clients rethink outsourcing and reshape their organization. Even though business is coming back, it is still moving slower than before the crisis.
Q: How have these changes affected the options of who you contract for your clients?
A: Our clients tend to be increasingly specialized and look for a company that can provide all-encompassing services. This is tricky, because it demands that we be versatile, losing scope of specificities. We need to make sure that we can provide specialized and comprehensive solutions. In some instances, this involves subcontracting more specialized companies in each field. We want our client to only have to liaise with one intermediary and yet still be able to know that all aspects of the project are being addressed.
One of our strength is our capacity to provide end to end solutions by bringing to the projects each required expertise.
Q: How is KLB able to offer added value through its project implementation approach?
A: We have a hybrid offering, positioning ourselves between management consulting and staffing services. What defines us is our highly operational DNA. While our competitors in management consultancy state what the client should do, we go one step further and implement it together with the client. After all, the most difficult part of any project is its implementation. No matter how fancy a strategy company’s slides are, trying to implement these ideas is a completely different world. What makes KLB unique is that it takes care of everything, from the design to the final result.
Q: How important is the Mexican oil and gas market compared to other countries in the region for the company?
A: We have a presence in six countries. On this side of the Atlantic, that includes the US, Canada, Brazil and Mexico. We had a great year in 2021 with 30 percent growth. The expectation now is to double our size within the next five years and Mexico is a big part of these plans. We already have two offices in the country but are considering new locations. Furthermore, KLB wants to grow its staff above 200. The Mexican oil and gas market is rather dynamic, though there are some difficult aspects, mainly related to PEMEX. In other countries, KLB supports renewable energy development but we do not see much investment in this area here. Therefore, our growth strategy in Mexico is really focused on oil and gas.
Q: What are some of the biggest needs among clients in the local oil and gas sector?
A: Our clients face different challenges but one of the biggest is the need to be flexible because projects can stop and start daily depending on the allocation handed out by the government or PEMEX. As soon as clients receive a new allocation, they must build a team and find partners while ensuring they comply with regulations. In the past, KLB struggled with competitors who played loose with the rules and were, therefore, able to offer cheaper services. However, international companies in particular, need a partner like us, as we know the ins and outs of regulation and show respect for it. Secondly, they need a partner with flexible solutions. Needs tend to change, depending on the stage of the project. This is where KLB aims to stand out, by adapting its services to each client. For example, each collaboration proposal is unique and tailored to the client needs and specificities.
Q: How do you assess the safety of Mexico’s offshore projects?
A: In terms of health, safety and environment (HSE) factors, all companies have to pay close attention to the regulations in such a dangerous industry. Especially for offshore projects, companies need to have specific policies in place before a project can be approved. Furthermore, employees are receiving more rigorous training than ever. Therefore, the industry is moving in a safer direction, which is a win-win for everyone.
Q: How do you balance the question of providing added value, with Mexico being such a price-driven market?
A: In the past, some clients solely cared about the price, which is where we lost out to local competitors. However, due to dissatisfied employees, safety issues and the fact that when you play loose with the rules you will eventually get caught, they soon faced drawbacks. People are always at the center of KLB’s focus. The happier your employees are, the more they deliver to clients. Making sure employees are safe and able to develop professionally has a cost but this has a positive impact on our clients and sets KLB apart from the pack. We know we will never be the cheapest because we focus on other aspects Such as seniority, safety training, project management & support.
Q: How would you evaluate your experience in terms of talent selection in Mexico?
A: When KLB first arrived here several years ago, most employees only focused on the short term, including the type of project and the salary. However, the industry is maturing. Now, we see more candidates paying closer attention to how they are managed, how safe a project is and what added benefits can they expect.
We want to retain employees as much as possible. In 2021, we launched an initiative seeking to reduce our turnover by 50 percent, focusing on training, communication and employee development. Human capital is a major emphasis for KLB since it is the only added value we offer to our clients.
Q: How do you envisage your future in Mexico?
A: In Mexico, we are strongly dependent on regulation, which makes it difficult to project strategy and budget allocations because they could change abruptly. KLB has excellent expertise in oil and gas. We want to take advantage of what we have built here and expand it further in Latin America; for example, through a current project in Cuba. What will be surprising is Mexico’s transition from fossil fuels to renewable energy. Right now, the country is an exception as others scramble to comply with obligations to reduce CO2 emissions. However, Mexico will get there eventually, so we have to anticipate this change in the market to support our clients when the expertise they need also changes.
KLB Group is an international operational consulting firm specializing in project management & implementation.