Create the "Perfect Storm" PSF/Professional Service Firm!

Rule the World!

Approaching Novosibirsk

He was perhaps the most independent, self-assured person I'd met—certainly the most independent-minded under 30. He worked for me for several months during my McKinsey days, on a distribution project for Frito-Lay in Dallas. I'd worked with a lot of very smart guys, but he was somehow different, though I couldn't at first put my finger on the how. Over dinners together, talk would sometimes turn to our backgrounds. We both had pretty similar, not particularly scintillating origins; and we'd both ended up in engineering school, he mechanical, me civil. But our paths then diverged. The U.S. Navy paid my way through school, and I returned the favor with four years' service. He had gone to work, at world's end and virtually alone, as a young—and remarkably independent and accountable—field engineer at Schlumberger, the French-based, lean-mean-autonomous-R&D driven oilfield services firm. I continued to follow the company, through some ups and downs, for the next 25 years. It surfaced again, with a bang, this week.

This week's BusinessWeek cover story (0114.08) informs us that Schlumberger may well take over the world: "THE GIANT STALKING BIG OIL: How Schlumberger Is Rewriting the Rules of the Energy Game." In short, Schlumberger knows how to create and run oilfields, anywhere, from drilling to fullscale production to distribution. And the nugget is still those hardcore, small, technically accomplished teams. As China and Russia, among others, make their move in energy, state-run companies are eclipsing the major independents. (China's state oil company just surpassed Exxon in market value.) At the center of it all, abetting these new players who are edging out the Exxons and BPs, the Kings of Large-scale, Long-term Project Management wear Schlumberger overalls. (The pictures in the article from Siberia, alone, are worth the cover price.)

At the center of the center of the Schlumberger "empire" is a relatively newly configured outfit, reminiscent of IBM's Global Services and UPS's integrated logistics' experts and even Best Buy's now ubiquitous "Geek Squads." The Schlumberger version is simply called IPM, for Integrated Project Management. It lives in a nondescript building near Gatwick Airport, and its chief says it will do "just about anything an oilfield owner would want, from drilling to production"—that is, as BusinessWeek put it, "[IPM] strays from [Schlumberger's] traditional role as a service provider* and moves deeper into areas once dominated by the majors." (*My old pal was solo on remote offshore platforms interpreting geophysical logs and the like.)

As I see it, and you doubtless know my longterm, noisy bias toward the "PSF-as-center-of-value-added" (PSF = Professional Service Firm), Schlumberger is transforming itself into the biggest and most powerful "PSF" in history. Moreover, paths like this, from IBM and UPS and Best-Buy to Schlumberger, are open to many firms—and provide, to use the term du jour, "blue ocean" of unimaginable breadth and depth.

All I ask is "think about it." If your imagination is fertile enough, there may be a space for you—tiny or large, local or global outfit—in a game like this.

So: Think about it.

(By the by, last year Schlumberger, growing at 25% per year, netted $7 billion on $23 billion in revenue. Its market cap is $120 billion—and it's by far outstripped its traditional rival, Halliburton.)

(Above you'll see my April 2006 picture—as my Air Siberia flight approached Novosibirsk in central Siberia.)