The second meeting between Oil Country Engineering and the advisor team created by Alberta Venture was held in Edmonton on March 2. Oil Country president and CEO Dennis Cuku met with Wellington Holbrook, executive vice-president of ATB’s business & agriculture division, Doug Ballou, a lawyer with Macpherson, Leslie & Tyerman, and Derek Hassay, an assistant professor with the Haskayne School of Business.
At the first meeting, in December 2013, the advisors focused on Oil Country’s responsiveness to its market and its ability to stay profitable when business isn’t booming. Cuku agreed, and called the challenge “keeping Oil Country’s hopper full.” Aside from the hopper conundrum, though, some of the advisors noted that perhaps too many decisions at Oil Country flow through Cuku. They questioned if the company could develop alternative businesses, as is its goal, without losing track of its core business, or without having Cuku running out of steam.
Since December, business has picked up and Oil Country’s hopper is full again. That has given Cuku some time to address concerns in the company rather than focus on developing new business. But as a few advisors point out, Cuku tends to think really, really big.
To Cuku, the second advisor meeting revisited the original “problem statement” that brought him to the Next Step program. That, he says, was how to keep “the hopper full,” and not be susceptible to market fluctuations. The advisors and Cuku also discussed expansion of the business to other markets and services as a way of evening out the peaks and valleys.
They also talked of workload. “We talked about bandwidth,” Cuku says. “I’ve created an onboarding plan for other marketing or business development personnel. Now that the hopper is full, that’s going to create time and space to find some other people to work with me and train them up to do more of what I need done.”
Cuku says he is in the process of hiring an assistant (and true to form, he refers to this person with a non-traditional title, as an “enabler”). Cuku also says the advisors cautioned him to be wary of diluting the company’s greatest asset – its customer service and culture – when expanding its sales force.
Cuku says the meeting convinced him that Oil Country needs reserves – money that it can call upon during the slow times to keep people working and allow them to look into new products through research and development. “A little bit of a paradigm shift there,” he says. “Right now it’s go-go-go, and we’re very reactive to our clients’ needs, because they’re very reactive to market.” The shift, he says, would be to realize that for the last 30 years the pattern has been the same – up and down. “If we know that’s happening, we need to be able to plan for the next one, and that means saving some money – putting some bills in the mattress … but also fixing the combine when there’s no crops.”
The advisors uniformly agree that Oil Country is a good business that they are trying to make great. But they caution that Cuku is facing some dilemmas with his approach.
Hassay says in the time between the first meeting and the second, Oil Country’s business has exploded. “This sort of shows that there’s peaks and valleys, and he knows he needs to manage the valleys,” he says. “Right now, when there are peaks you have to be capitalizing. The biggest conversation we had, however, was how do you fill in the valleys of the business? What do you do in the off cycle?”
Hassay says plans for other businesses that Cuku has talked about might fill the valleys, but also might follow the same cycle. He says there might be other “counter-cyclical” businesses he might consider instead.
ATB’s Holbrook similarly focused on Oil Country’s up and down cycles, but also on Cuku himself. “He’s brilliant, but he’s quite a big thinker,” he says. “In my career I’ve met big dreamers but he’s thought through the details. I think he’s hit a crossroads [though]. He’s pushed this business pretty far, and I think he appreciates that if he pushes it much further he’s going to blow up because he carries a lot on his shoulders.
Like Hassay, Holbrook says finding a different way to balance the business cycles is critical. Worryingly, he says Cuku “is almost fixated with it,” noting that he wants to incorporate big, society-changing ideas into the business shift. “He’s almost getting to a point where he’s banging his head against the wall because he hasn’t found a way to do it that will work perfectly for his big dreams and a way that will work practically.”
Still, Ballou has seen a marked shift. He says Cuku has softened to the Next Step process and is taking the counsel of the advisors far more seriously. He says, candidly, that he expected the second meeting would see Cuku continue to brush away criticism and respond like he knew all the answers to the advisors’ questions. “That’s not what I saw unfold,” Ballou says. “He was clearly listening to a number of the things around the table.”
He says Cuku seems aware of the bandwidth challenge and offered him advice. “If you want to gain the bandwidth … that’s not something that’s going to occur over night.”