Tuesday, 16 August 2016

Schlumberger in Russia

I think the first time I noticed the power of stories in sales was when I was managing a sales team in Russia for Schlumberger in 2000.

Schlumberger was formed in 1926 when Conrad and Marcel Schlumberger invented a technique to measure the variation of resistivity in oil wells and hence locate the oil. The invention was an instant success and within a few years, Schlumberger were deploying their technique all over the world. They revolutionised the Russian oil industry to the extent that the Schlumberger Brothers where made "Heroes of the Soviet Union", celebrated with a plaque in the Kremlin.

But the company suffered a huge setback in the 1930s, when Stalin nationalised Schlumberger's assets in Russia.

In the mid-1990s, when Russia was opening up again to western companies after the collapse of the Soviet Union, Schlumberger needed to make a decision whether to re-enter the market. Then CEO, Euan Baird was asked how much money he was willing to risk on a Russian re-entry; Euan’s answer was “$200 million”.

With that answer, Schlumberger set about placing senior experts and investing in two of the top six Russian oil companies. The results were startling; using western techniques, the two Russian oil companies doubled production while their competitor’s production fell.

I've told this story many times and heard it re-told by my customers. The story’s effect was remarkable and unmistakable.

The power of stories to capture our attention lies in the narrative journey: the complications, trials and mistakes that expose the hero's vulnerabilities. Without the setback of Stalin's nationalisation, the story would not have the same power.

Today, Schlumberger is a company with revenues of $35 billion, dominating the oil and gas services business - and generating nearly $2 billion per year from Russia alone.
Company: Schlumberger
Source: Mike Adams experience and conversations with Schlumberger people in Russia at the time
Story Type: Company Creation
Labels: Innovation; Persistence; Unexpected Event
For Story Students:
The Setting: Schlumberger in Russia 1930 to present day
The Complications: The company's assets were nationalised by the Russian state
The Turning Point: Schlumberger's successful re-entry into Russia in the 1990s
The Resolution: A massive successful business
The Point of the Story: How an interesting story says more about a company than marketing claims
How to use this Story: We tell this story as an example company Creation story and to illustrate the persuasive power of stories.

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