Executive MBA Essay
Five years ago, I was assigned to lead one of Schlumberger’s R& D departments, located in Tokyo. This department was established in 2005, with the rationale that this would enable the company to tap into the Japanese high-end electronic and data communication technology while at the same time establishing relationships and alliances with Japanese market leaders for the purpose of leveraging their technologies. When I took over this role, the department did not have a single active or ongoing collaboration project with any Japanese company. The only projects operating within the department at that time were internal ones; the team had been shirking constantly since its inception, and the department was in trouble. Management had lost its trust in the department and had started questioning whether the existence of such a department was justifiable after several rounds of budget reductions to the department.
Management’s view on the team and the general perception by other employees that the department was unjustified had in turn worked to drastically and adversely affect the team, with motivation levels at an all-time low. During an early assessment of the team and the situation, one of the things that I discovered was that the team had been suffering from a lack of proper communication, lack of vision, and a poor understanding of their job descriptions.
In order to improve the situation, I reshuffled the available resources that I had available to me and included more Japanese senior managers in my direct reports so that they would be able to communicate with their corresponding teams more efficiently. The effect of this decision was nearly instantaneous, and it did not take more than just a few weeks before that change was clearly visible to anyone else reviewing the department. I hired a coach who specialized in Japanese corporate culture to educate myself, ensuring that my direct reports were more effective and worked to ensure that I made less mistakes regarding Japanese corporate culture and communication.
I established a clear mission and a clear vision for the department and obtained a buy in from both upper management and team members. I presented a business strategy for the department and a long-term plan for the department to upper management and through these, persuaded upper management to provide a budget that would enable the realization of that strategy. The business strategy that I created was based on a differentiation of the product line along two axes: functionality and quality. This would work, I postulated, to in turn increase Schlumberger’s market share in wireline, well intervention, and testing. In order to implement the strategy, I established a task force to scan and identify the relevant Japanese companiese technology would add differentiating value to the company products and established relations with local universities that had insight into the latest trends and activities in the industry. Once those companies were identified, I approached the companies systematically and started several collaboration projects with well-known Japanese MNCs and smaller Japanese companies that provided nice products and solutions.
A large portion of the department budget came from the sale of the tools developed by the department. The tools were manufactured in a manufacturing facility in Japan where the labor cost was relatively high, leaving the department with a relatively low profit margin and not a lot left for R&D activities. I initiated an outsourcing program to gradually move all the production to a manufacturing site in Malaysia where many other products from Schlumberger were manufactured. Once the process was fully implemented, in 2012, the profit margin from selling internally developed tools was increased by approximately 20%, providing us with enough funding to pursue new R&D activities, increase the size of the team, and boost design and development activities.
Since I took over, my department has successfully commercialized 7 tools. Since the introduction of those tools to the market, the differentiating nature of those tools have worked to increase the company’s worldwide market share in wireline, well intervention, and testing by 7%, 12%, and 6.5%, respectively. The increased quality of the tools has reduced rig-time by a factor of 2 on average among all segments, resulting in cost savings, and therefore increased profits, of ~10M USD in the services provided to our clients in 2014 and in the first two quarters of 2015. In addition to the already commercialized products, today we have seven large ongoing projects in the department, which are targeted at several new segments. My department and my team has regained the visibility and trust that they deserve from management and peers within the company, motivating them to work harder and increasing team morale. The team has grown since I joined by a factor of 3 and is still growing. I have managed to establish a healthy relationship, resulting in a win-win situation with Japanese companies including Hitachi, Mitsubishi, Sumitomo, Rohm, and Kyocera, which, if sustained properly, will guarantee my company’s differentiating products and services for years to come.