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MarketsOpinionsDrilling Business InsightsWaterPipeline

How Can Drilling Contractors Manage Ambitious Employees?

Don't Let Employees Moving on Take Parts of Your Company with Them

By David King
David King
David King is president and owner of Kingsland Drill International, a drill pipe and accessories supplier based in Mercersburg, Pa.
August 14, 2020

I read in the June issue about retaining employees in another excellent article by Jessica Alexander (“What You Need to Know to Launch an Employee Retention Program,” June 2020). As owners and managers, we worry about keeping good people. Can you blame someone for trying to improve themselves?

If they leave, would you feel betrayed? Maybe that depends on how the jump was made. One school of thought is that, with every paycheck, the slate with that employee is even. They accepted terms of employment, receiving their pay, and I accepted the work they did.

But, what is worse than a good employee leaving? Read about these examples.

My one-time neighbor, Charlie, was a retired Marine major who had a consulting company working with the military. It grew to become very successful. Then, one day, a group of his account managers came to his office to announce they were leaving, starting their own firm and taking most of his better clients. How long had they been planning this, meeting together and plotting? Talking with customers about their move? Charlie was devastated and eventually had to close the business he had built.

When I ran a manufacturing company, we had an inquiry from another local company about buying us. I set up a meeting and took my number two employee along. Two days later, the owner of that company called to warn me about my number two. It seems the number two had called this owner to tell him that if they did complete the purchase, that he — the number two — would be the best choice to run it. I was not surprised. No matter how fair and good you are, some employees want to be chief.

About four years after I left that company, number two took several key people from sales, shop and field work, and they all left on the same day to open their own company. They already had their company set up and knew which customers they were taking with them. Then, for years, they would call some of the manufacturing people at their former company and try to recruit them. It put a hole in the company’s accessory sales and construction product areas. It also created a competitor that drove down prices and profits.

I call this betrayal. They worked and got paid by a company whose customers they had already obtained commitments from. They used their vendor relationships to set up these same vendors at their new company, sometimes at the expense of their former employer. Want to make that kind of change? Fine. Have the courage to quit and do the set up work on your own time. It is one thing for your lead drill operator to talk to you about his buying a rig and starting his own company, and quite another for him to quit one day and you see him the next day drilling a well with his own rig.

Not all employees want to “move on.” On one job I worked in Kentucky, I was happy doing what I was doing. My offices were in the manufacturing buildings and I had no desire to move up into the office building where the companies were being run. Why? First, I had a manufacturing company before. I liked the manufacturing management aspect. Second, management trusted me to get the job done. They trusted me to buy raw materials at the best price. They trusted me to hire when needed. They trusted me to schedule and run the shops as I saw fit. They trusted me to do the pricing. Third, they sought my ideas. They may not have always agreed, but I knew they gave it some merit. Fourth, it was not the money. I knew that the company would have my back if something popped up in my personal life. I felt that they cared about me and my family — not just my work.

How do you prevent a mass exodus that could drastically affect the company you built? Sometimes an employee outgrows you. You know they could make much more money elsewhere, or have the ability to successfully run their own business. There are limits to what we can offer to keep an employee like that. They want to run it. They want ownership. They want to own something they can pass on to their children. As long as everything is out in the open, it can be a good thing. That’s friendly competition and potential help when you need it. The thing to avoid is a “coup”-type departure, which can take a chunk of your business and will not be friendly competition.

My first suggestion? Maintain some customer contact so they know who you are. Call just to make sure they are being properly serviced. Maybe attend a trade show where you can meet in person.

Then, keep an eye out for cliques forming and who the leaders seem to be. If you think it is a sales person, increase your oversight. Call them in and get updates on current dealings. That lets them know you are watching. Check their work.

If you think an employee is working at cross-purposes to your business’ goals, considering firing him or her. Force them to do set up work on their dime. If you worry about the effects of the person leaving, try to walk the line between using his or her abilities for your company’s benefit and working to strengthen others as replacements if that fails.

As drilling contractors, you can grow too big to micromanage everything. You might have managers for water treatment or your geothermal work or large community wells. How would you react if your water treatment manager took several of your technicians to form their own treatment company? It happens. Company loyalty often ends at the paycheck. It’s just something else to keep us up at night.

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David king

David King has decades of expertise in drill pipe manufacturing and retired as president and owner of Kingsland Drill International, a drill pipe and accessories supplier based in Mercersburg, Pa. For more information, call 717-328-9256.

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