executives’ and businessmen’s errors and mistakes.
Certainly, there would be few entries in such ledgers that
would show up more glaringly
than the cost of premature,
defeatist cancellations of plans and programs already under
way.
My 1932 bobble in turning down the Iraqi oil concession
illustrates another blunder frequently made by
businessmen —namely, their reluctance to take risks. A
businessman has to be willing to take risks. They may be
planned and calculated, but they’re risks just the same. The
shrewd businessman weighs all the known and, to his
knowledge, possible factors in a given situation. He tries to
allow for all the variables, but he is well aware that he
cannot think of nor insure against every contingency. He
accepts the idea that there is always a possibility that some
completely unforeseen element or development will turn up
to alter or even wreck his plans. He is, however, secure in
the knowledge that he has done everything within his
power to tip the odds for success in his own favor.
Obviously, I was not very sh
rewd in 1932. Had I stopped
to reason things out, I would have realized that the crude-
oil price-break was only a temporary problem, that the
price of crude would have to go higher—much higher. I
should have also realized that the demand for petroleum
products would continue to increase throughout the years,
and that it would be only a matter of time before the world
would see a mad scramble as oil companies sought new
sources of crude-oil production. Considering the bargain-
basement price at which the Iraqi concession was being
offered, the risks involved in buying it would have been
more than offset by the potentials for eventual profit.
The businessman who is able to calculate his risks—and
then is willing to take them—has his battle for success
nine-tenths won. The remaining one-tenth is the unknown
variable, the unpredictable factor that puts the zest and
excitement into the game. Without that “x” factor, business
would be hopelessly dull, routine and uninteresting.
Young businessmen and executives make other mistakes
than those I’ve already discussed. Often, the fault is not
theirs at all. Young men generally start out in the business
world today as strictly disciplined and as passively obeisant
as the novices of some pagan cult. By the time they leave
their schools and colleges, where they receive
overspecialized educations, they are virtually consecrated
to the Moloch of “Organization” and dedicated to serving
the complex rituals of memorandum and buck-passing.
They are—and remain forever—cloistered from the
unanointed laity of the rank-and-file production workers.
The organization chart—the more complex the better—is
their Grand Totem. Whole volumes— or preferably entire
shelves—of procedural rules are their most honored
fetishes. They are conditioned to meet periodically in
solemn conclave and pore over the esoterica of statistical
tables and committee reports. They are as far removed from
the harsh, mundane realities of commerce and industry as
Egyptian priests arguing abstruse theological doctrines in
the sanctum of the inner temple.
I made my first million dollars in the front seat of a
battered, secondhand Model T Ford. The flivver served as
my executive office and field headquarters—sometimes
even as my bedroom. I transacted enormous amounts of
business and signed many important leases, contracts and
agreements in the front seat of the mud-splattered tin lizzy.
When it was necessary to have documents witnessed, one
or two of my drillers or roustabouts scrawled their
signatures on the papers, using the jalopy’s wrinkled
fenders as writing surfaces. There wasn’t anything unusual
about any of this. Almost every independent operator—the
wildcatter—who prospected and drilled for oil during the
early days in Oklahoma operated in much the same
manner. He had no fixed hours, no five-day week. He had to
be his own promoter, geologist, legal advisor, explosives
expert, drilling superintendent and jack-of-all-trades. Most
of his time was spent in the field, working alongside his
men.
He often went for days without any sleep save for what
naps he could take on the drilling rig or curled up in his
automobile.
The wildcatter operated on a perpetually frayed shoe-
string budget—at least until he brought in his first big pro-
ducer. He constantly faced heavy competition; his business
was fraught with innumerable financial perils and pitfalls;
as a natural consequence, he developed certain traits and
techniques and learned certain lessons which, I’m afraid,
today’s young businessmen have little opportunity to
develop or learn.
We, the “independents,” eliminated all unnecessary ad-
ministrative overhead expenses in our operations. We
scorned renting offices in the boom towns that burgeoned
around the oil fields, partly because we didn’t want to
spend the extra money on what we considered an
unnecessary frill, but mainly because we knew that it was
impossible to run our operations properly from behind a
desk. We familiarized ourselves thoroughly with all aspects
of our business and kept all our costs down by exercising
unceasing and vigilant supervision over every phase of our
operations. We often worked employee-morale and
production miracles by donning
overalls and sweating and
grunting along with our men even on the toughest and
dirtiest jobs.
It wasn’t until I’d brought in a few producing wells that I
thought to trade my Model T for a new Dodge and to rent
desk space in someone else’s Tulsa office. By then, I was
worth a million dollars—on paper. Nonetheless, I still wore
work clothes more often than I did business suits. I was
running three strings of rotary tools—drilling three wells—
simultaneously and acting as
my own financial manager,
purchasing agent, tool-pusher and drilling superintendent.
There were often times when I’d work around several clocks
without sleep to keep things moving on the drilling sites.
Is this boasting? I think not; as I’ve said, most inde-
pendent operators worked the same way. Bill and Charles
Roeser, R. M. McFarlin, George Forman, Josh Cosden, Bill
Skelly—these were only a few of the countless others who
retained their basic outlooks and attitudes toward business
even after they’d made their million or millions.
What I’m trying to point out with all this are some of the
differences between the businessmen of that era and those
of today. I’m also attempting to point up what I consider
some of the glaring errors made by today’s young business-
men and, for that matter, by American business firms and
American business as a whole.
First of all, there is the atti
tude toward administrative
overhead. Years ago, businessmen automatically kept ad-
ministrative overhead to
an absolute minimum. The
present-day trend is in exactly the opposite direction. The
modern business mania is to build greater and ever greater
paper-shuffling empires. Many business firms employ
battalions of super specialized executives, reinforce them
with regiments of office-working drones, give them all
grandiloquent titles —and then mire them down in
bottomless quagmires of forms, reports, memoranda,
“studies” and “surveys.”