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CNN was on the television, highlighting a story of how natural gas was quickly becoming the next motor fuel. The reporter interviewed a spokesman from the American Gas Association, who talked about how trucking company and car owners could save money and the air by switching to natural gas as a motor fuel.
I think I actually said “bull s&*t” quietly under my breath. Obviously, I did not say it quietly enough, as the gentleman sitting next to me turned and said, “Why do you think that it is bull s&*t?”
“Three points,” I answered. “First is the investment cost in the vehicle. Second is the investment cost in the delivery infrastructure. Third is that the price of oil will not stay this high.”
He sat there for a moment, looking at his drink. Then he let out a sigh and said, “My management team wants to shift our fleet over to natural gas trucks. I have been hesitating because I was not sure about your point on the price of oil. There is a ROI, but only with high oil prices.”
The rest of the conversation lasted about 15 minutes as we talked about the driving factors behind the price of oil. We agreed that the price of oil would drop as more US production came on line. At the end of the conversation, he declared, “I am going to tell the team that we are not doing natural gas.”
That is when I stopped him.
“How do you think the team is going to take that decision?”
He was quiet again. “They will not like it. They did the research and are convinced that this is the right way to go.”
That is when I made a simple suggestion, for me to spend a few days with the team, leading them to do an analysis as I had done with him at the bar. Letting them do the research, they would then be the ones to come to the conclusion that we arrived at.
“Think of it this way. If they do the work and decide it is a bad idea, they make the decision, not you. There is no way you are the ‘evil’ boss that made the decision. They did the work, and they made the decision.”
He liked my idea. Then I said, “Think of what you gain in the long run. They learn how to do the broad research into all of the facts and opinions, and develop the skills for looking beyond surface solutions. The next time they get an idea that is a major shift, they will know how to go through the details, and make the right decisions.”
That conversation turned into an engagement. Two weeks later, I spent three days with transportation managers and a financial analyst looking at the natural gas infrastructure, and how it compared with the oil network as an alternative motor fuel. In the end, the team agreed that moving the fleet to natural gas did not pencil out like they thought it would.
While the coaching engagement was only a few days, the team covered much ground in the research phase of the first day. With six people plus myself, the amount of material we found in our research was astounding.
In our presentation, we did not go into the depth presented in the following articles. However, as a group we discussed at length all of these topics, and the meaning that each had on the decision we had to make.
In the end, the group recommended not to make the investment on natural gas as a motor fuel for their fleet of trucks. At least, not yet. What drove the decision for the group was not the price of natural gas, if it went up or down. They learned that the investment in infrastructure and the vehicles was significant, so significant that even if the price of natural gas itself went up 10 times, the investment costs still drove the decision.
It took only one question to make the point. The final question: “What do you think the price of oil will be next year?”
Oil prices were high, but the same factors making natural gas plentiful were driving oil production in the US. Looking around the table I asked each member of the team what direction they thought oil prices would move. All thought the price of oil would go lower.
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