Is your "arbitrage leadership" producing a "triage culture?"
Commodity price swings, extreme weather, CEO retirements, head coaching vacancies, bankruptcies, and Major League Baseball lockouts, can all be VERY disruptive...
...BUT they can also be very lucrative for certain stakeholders.
And in this live episode of The Energy Detox, we weave together all those disruptions to help you uncover hidden areas where a lack of stability and consistency is threatening your odds of achieving long-term success.
The headline: 𝐏𝐫𝐢𝐜𝐞𝐬 𝐏𝐥𝐮𝐧𝐠𝐞 𝐁𝐚𝐜𝐤 𝐭𝐨 $4.25 𝐚𝐬 𝐋𝐍𝐆 𝐃𝐞𝐦𝐚𝐧𝐝 𝐍𝐨 𝐌𝐚𝐭𝐜𝐡 𝐟𝐨𝐫 𝐌𝐢𝐥𝐝 𝐖𝐞𝐚𝐭𝐡𝐞𝐫 (Natural Gas Intelligence)
The goal: to (𝐆)𝐫𝐨𝐰, (𝐏)𝐫𝐨𝐭𝐞𝐜𝐭, 𝐚𝐧𝐝 (𝐒)𝐮𝐬𝐭𝐚𝐢𝐧 success by pondering these 3 questions throughout your day:
💡 How dependent is your professional and personal growth strategy on chaos and disruption?
💡 In what ways are you embracing (potentially lucrative) complexity at the expense of your ultimate mission?
💡 For how long can your stakeholders withstand the hidden costs of unnecessary volatility?
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Transcript
(AI training in progress; please excuse any errors)
Hello and welcome to another Live episode of the energy detox a petroleum based blend of leadership conversations guaranteed to boost your professional and personal output by flushing away the hidden and often toxic barriers to peak performance. I'm your host, Joe Sinnott, a chemical engineer, executive coach and 16 year energy industry veteran helping you tap into the same resources fueling today's most successful and sustainable leaders. And today, we're going to help you determine how you as a leader can help leverage some of the things that those sustainable leaders do to balance the need to take advantage of and leverage disruptions in the market to make a profit with the need to ensure some measure of stability, and sustainability and calm consistency, which at times can of course cost you money, it can be costly to try to maintain a steady ship when the world around you is in chaos. But the reality is that many leaders today are on one extreme or the other, they rely too heavily upon chaos, and the need to extract value from all the various disconnects in the market to make a quick buck and to move the company forward and to have a quick jump in stock price. And while doing that at the expense of quite frankly themselves, in some cases, their stakeholders in the long term value of their organization. Whereas on the other hand, you obviously have plenty of leaders who are too risk averse, and too afraid to jump in and take advantage again of disruptions and you know, too afraid to to acknowledge the very real signs that they need to take some decisive action and perhaps do something that's a little bit uncomfortable. And the reality is that the most successful leaders, the most sustainable leaders are the ones who are able to appropriately balance those two worlds of chaos and stability, of disruption and consistency. And in today's episode, we're going to draw upon several headlines that point to disruption both in the world of sports and business and, and also quite frankly, in your personal lives. And we're going to take all that together to help ask you as we've been doing each morning here on this daily version of the energy detox, we're going to help you ask questions to identify areas where perhaps you're a little over reliant on disruption and chaos, and that you're not quite realizing the long term damage, in some cases, the short term damage that it's causing to you and your stakeholders. And to drive this conversation first and foremost is of course, the idea of arbitrage in the energy industry. Because for those who are involved in commodities, and those who are certainly involved on the commercial end of commodities, you know, full well how arbitrage works. And the idea behind it, which of course, is if you can buy a product or a commodity for a lower price, and then sell it somewhere else, ideally, in some relatively short amount of time, then you're going to make a profit. And there can be risks to this. But again, the shorter the timeframe is from when you buy something for less money and sell it for more money. Well, again, the less risk there is and the more money you can make. And again, in the energy markets, we see this all the time, certainly from electricity standpoint, for those of you who are not in the world of commodities, you know, the best example is, hey, if you can buy electricity when demand is low, say in the middle of the night, and then somehow store it and sell it later on when prices are high. Again, that's a good example of arbitrage perhaps a little oversimplified, but that's how it works. And as we look to natural gas prices here, which is the basis for today's headline, because natural gas prices have taken a turn. Well, one of the things that does is impact the LNG market because LNG the profitability of LNG, which we talked about on yesterday morning's episode is heavily dependent on arbitrage, you know, can you make more money by converting natural gas to liquefied natural gas, putting it on ships sending it across the world and then selling it, because if you can't make money from that, if the if the spread between what you can sell it for and in Asia or Europe, you know, isn't worth all those extra costs, then again, you're not gonna make any money. And what's interesting, of course, is now that natural gas prices are dipping. And quite frankly, they've dipped more in the last month than they had in years least in terms of, of I think, you know, either percentages, or certainly, you know, the dollars and cents piece. The reality is that again, a lot of people a lot of individuals are looking at these these gyrations this dip in prices as an advantage to make money to take advantage to buy the dip, if you will, we see this on the oil side where thanks in part to the Strategic Petroleum Reserve release and other global things going on the price of crude in Midland, you know, nice sweet crude there is actually going to go up there's some arbitrage there versus its counterparts, you know, around the world. So again, There's lots of things going on, this is something that our market is used to. And again, it makes sense this arbitrage idea makes sense. Where it might not make full sense is when you have some sort of disruption, whether it's in your company, whether it's a change in CEOs, whether it's the change of coaches, as, again, we've talked about this week on the energy detox with the coaching carousel in the college football world, or, you know, as the case might be, with changes in again, prices, changes in weather, whatever the case might be, you have lots of disruption in the world. And this disruption, much like the disruption that came about last night at midnight, in the world of Major League Baseball, where, again, the players and the owners, they're locked out, nothing is happening. There's lots of disruption there. But the reality is, there's going to be people swooping in to take advantage of that disruption and make plenty of money, whether they're lawyers, whether they're their agents, whether they're consultants, whether they're advisors, whatever the case might be, when you have disruptions, like the Major League Baseball lockout, when you have bankruptcies, when you have changes in leadership, especially at a very large company, when you have changes in leadership within the world of sports, including college football, as again, we've seen with Notre Dame and LSU, this week, when you have those disruptions, it is an opportunity for people to swoop in and quite frankly, take advantage of those disruptions and make a lot of money. You know, this is something you know, if you don't listen to podcast, the far middle by the CEO of CX up here in Appalachia, Nick Julius, it's a fantastic example in he uses lots of examples in his podcasts of people who swarm in when there's chaos and disruption and make a whole bunch of money from the the bureaucracy from the, again, the advisory fees, lawyer fees, whatever the case might be. And this is not a knock against people who do that necessarily. But it is an opportunity to ask you as an individual, how reliant you are and your success is upon that disruption, and whether or not that is costing you dearly. And so again, we're going to use all these global things as an excuse to ask you some questions. So that being said, let's jump in to the to the first question here, which I've already basically alluded to, which is how dependent is your professional and personal growth strategy on chaos, and disruption. And again, if you happen to be in the world of whatever you want to call it, you know, figurative divorce law, if you will, right, where two parties are separating, it's a it's a horrible situation. There's lots of emotion involved, but the reality is, there can be lots of money involved, for those who are advising. And again, those advisors, those lawyers, you know, they're they're doing their best to support their clients. That is not inherently bad, of course, but at least they know what they're doing. And the parties they're serving, know what they're doing. The question for you is in what areas of your life are you dependent? Are you feeding upon this, this chaos and this disruption? And in so doing, what is the disruption in the chaos that you're causing down the road? And again, we'll bring this back to the leader of an organization, particularly an energy organization who has gone through plenty of disruption over the last two years. Yes, there's disruption that needs to be dealt with and addressed. And yes, you need to make hard changes within the company. But are you going so far overboard, that you're looking for reasons to change, you're looking for extra reasons to cause disruption instead of perhaps asking how a little bit of stability might actually have some hidden value, as opposed to you going forward and making rash decisions simply because you feel like you have an excuse to do so because of the disruption in the chaos around you. And those decisions are causing unintended consequences. And again, we can fill three hour long podcast of examples that I've heard firsthand secondhand, both in my coaching conversations, or in my casual conversations, or in my readings of global events and headlines and profiles of leaders who, who again, led successfully and not so successfully over the last 24 months. Well, we can we can go through all those details, but it's not about them today. It's about you. And asking yourself, again, how dependent how reliant Are you in many cases unconsciously on this need to react to disruption? How dependent Are you on this? Some cases, gambled that you want to take on the fact that you're going to be able to time the market, you're gonna be able to take advantage of the the arbitrage, if you will. And in some cases, the figurative arbitrage that occurs when there is disruption, again, whether it's disruption from a leadership standpoint, within a company or team, whether it's disruption in the energy markets, whatever the case might be, is your nature, if you will, to gamble on that to take full advantage, if you will, and try to roll the dice and say you're going to be able to come out on the better side, you know, wealthier and more successful than somebody else. And, again, if that isn't your DNA, and you acknowledge that fine, but who I'm talking to today is those people who don't realize how much they're fueled by chaos disruption, because there's a lot of you out there, and if it's you and you don't realize it, then again, the biggest issue is not necessarily with yourself, but the harm that you might be causing people down the line, which again, comes back to the title to Today's episode, which is, is your arbitrage leadership? Is your desire to constantly be taking advantage of disruption causing a triage situation within your company. Because what is triage? Well, again, I mean, most, I think a lot of people would think of it on a battlefield, right, where you have lots of injured people, and you can't quite 10 to everybody, so you need to triage them, you need to figure out and sort of force rank them, if you will, and to the people that need the most attention, and those who can maybe, you know, hang out for a little bit and, you know, nurse their injuries, obviously, in a hospital situation, particularly, you know, if hospitals were overflowing, you have triage situations, you need to triage people and basically determine whether or not they are in need of acute care or whether they can be delayed. And if you're running a company like that, if you have an entire company of employees who feel like they're constantly in triage, and they're all under stress, they're all under, you know, distress in many cases. And all your HR people are doing and all your leaders are doing is trying to figure out who is in the most dire state because of the decisions that you've made that are trickling down? Well, again, that's a recipe for disaster, that is a recipe for you and your company and your stakeholders to see, you know, a pretty big dip in performance that again, other people can swoop in and take advantage of from an arbitrage standpoint, and try to lowball you and, and wait for, you know, your resources and your assets to ultimately realize their full potential because you weren't able to do so because you were too busy and too distracted by the fun, if you will, that comes with chaos, and disruption and disturbances. So again, ask yourself, how dependent is your professional in some cases, personal growth strategy on chaos and disruption? And moving on to the second question, and what ways are you embracing potentially lucrative complexity at the expense of your ultimate mission? And again, this is obviously related to the first question in this whole conversation. But again, it comes back to the very real fact, which is disruption and chaos can be profitable, especially in the short term. But what is your ultimate mission?
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What is your ultimate goal for yourself, for your team, for your company, for your family? And is your desire to protect this, this need to, again, be be fueled by the excitement that comes with disruption? Is that desire, causing you to lose sight of your long term mission? And again, I won't expand upon this question as fully as I did the first one, because it's pretty straightforward. Are you forcing some sort of disconnect some sort of gap between your long term goals and your short term embrace of all of the chaos and all the disruption? And if not, well, ask yourself what you can do about it, right? How can you be more conscious and more aware of those times where you are following your need to be excited and you know, in the trenches and, and running around like a like a, like an ER doctor or nurse and, and treating people and then enjoying that rush, when in reality, it's not necessary, and you're actually leaving value on the table? Because of, you know, you're you're ignoring of the value of stability, and consistency and sustainability. Which brings us to the third and final question today, which is for how long can your stakeholders withstand the hidden costs of unnecessary volatility. And again, if you're a leader in the energy industry, I would hope that all of your stakeholders, whether they're employees, whether they're investors, whether it's your board of directors, whatever the case might be, I would hope that they're very well aware that they are part of a volatile industry, which has been, always will be and, again, if they don't appreciate that, then, you know, maybe, maybe they don't need to be a part of the energy industry any longer. But assuming they are aware of the fact that volatility in many cases is a part of doing business and is quite frankly, a necessary part of doing business. The question for you is, how much unnecessary volatility Are you injecting into your organization into your dealings with your people and
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to dealings with your customers, with your stakeholders with your stockholders? Whatever the case might be? And the follow up question to that is, of course, what is the damage that that's causing? How long can your stakeholders withstand that? And are they looking to you as somebody who's constantly running around with his or her head, his or her head cut off? Right? You know, which brings me back to some of the things that I do as an executive coach, which of course, is help leaders, especially emerging leaders, better establish their executive presence better get to the point where they are acting confidently and consistently and, you know, consciously and not just running around from fire to fire and not just, you know, being the the busiest and most chaotic and most scatterbrain person who's still able to get results and still able to put in the time and energy and still able to motivate people know what you want in a leader who has true executive presence is somebody who can take a step back, who can be calm, who can be moving forward in a manner that again is is relatively smooth and steady. While yes All of the chaos and all of the disruption and everything else that's going on in the world is, is occurring. I mean, you can't ignore that, of course, but you want a leader who is conscious enough to to not just revel in the disruption and the chaos, but you want a leader, and you want to be a leader, who's able to see that, but balance it with the need for some measure of consistency and stability, that, quite frankly, can get ignored, not just in the short term, but in the long term for people who have been a part of an industry like oil and gas for people who have been involved for decades and an industry that quite frankly, is non stop every lies on ups and downs. People are fueled by that I've been fueled by that. But again, if you are a leader, or if you work for leaders, who basically have have conceded that there's never going to be any sort of common, never any stability. And the question is, how long will their stakeholders especially up and coming talent that's new to an organization that's new to the industry? Who might not have a flavor for how volatile and how crazy this is? How long are they going to hang around? Or how long are they going to be engaged? Or how inclined are they going to be to offer their own innovative creative thinking when, you know, they're being told essentially, and indirectly, at least that you know what their ideas don't matter, because we're just going from fire drill to fire drill. And the whole goal was to just survive and advance and avoid bankruptcy and avoid chaos. But don't worry, even if we do go through bankruptcy, or we do have chaos, we do get bought out or we do have leadership changes, or whatever the case might be. It's okay, because that's the way things are and there's going to be fooled people that can come in and swoop in and take full advantage of make plenty of money. And even if it makes your life miserable. That's the nature of things, we're going to pay you well enough that you're going to want to hang around. Is that really what you're relying upon? And if so, how long is that going to last? How sustainable is that approach. And all that being said, and coming back to to again, the headline that drove this today, the reality is that things are constantly changing, the weather is constantly changing. The weather, which is now predicted to be warmer is what's causing the dip in prices, which will cause people to put on their arbitrage hats and figure out how to take full advantage of this and perhaps buy the natural gas for lower prices and still here to their long term bullish view and somehow store that gas and move it to the market. That's all going to continue happening because again, industry like weather will constantly change. But the reality is that today's weather is warmer than had been predicted. And today's warmer at least here in southwestern Pennsylvania is warm enough that I will be forced to adhere to my my commitment to my wife to begin putting up Christmas lights outside today. So again, there are ramifications to warmer weather that and depending on your perspective can be positive or negative. But the reality is, if you're constantly looking at those ups and downs and weather as an excuse to just get something done as an excuse to push some new agenda forward as an excuse to just make a quick buck. Instead of focusing on your long term vision, then again, you're asking for trouble. You're asking for people to come into your world who you might not need and who you might not need to entertain and pay and devote time and energy to. And quite frankly, if you ignore the fact that you might be so embroiled in chaos and disruption, if you ignore your desire to be a gambler, if you will, when it comes to your leadership, you're going to find your organization in a state of triage, where everyone is constantly being assessed for how damaged who they are and, and how hurt they are. And it's going to be a constant battle to bring them back to health while you continue to leave more injured people and more injured bodies, if you will, laying in your path. And you might be doing it in a way that you don't even realize. So again, today, ask yourself in what ways you are being an arbitrage center leader, and in what ways that is leading to a triage style culture within your organization. And with all that, if you happen to be in the part of the country here who has warmer weather that's coming, I urge you to take advantage of it whether or not that means putting Christmas lights outside your house or not. And again, whether or not you are a leader who finds yourself in a position of chaos and dealing with volatility and you're not quite sure how to navigate that
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in a way that is efficient. And that reduces the amount of damage and that maximizes the amount of long term value that you can achieve, then feel free to reach out. I love having these types of conversations with individuals. Of course, I love having these conversations to uncover some of the, you know, unwitting adherence to unnecessary chaos and disruption within your lives whether they're personal or professional. And clearly, I love supporting the energy industry in any way I can, especially as we continue to navigate the ups and downs that will continue to plague, oil and gas. So with that, I hope you have an excellent rest of the day. I appreciate your time tuning in as always, and I hope I hope you tune in again tomorrow. Take care