OUR THOUGHTS ON:

Marcellus Shale Drilling: Rapid Company Growth Can Bring Challenges

Energy & Resources

By Richard McKenna

If your organization is fortunate enough to be involved in the Marcellus Shale drilling boom, you may have said to yourself, “Be careful what you wish for.” Too much of a good thing can spell trouble for some organizations.

There are already signs that organizations involved in the gas drilling industry are struggling with this newfound growth. Demand for certain services and equipment is outpacing the supply, internal business processes and infrastructure are struggling to support increased business activity, and the search for talented and resourceful employees is getting harder and harder. Hopefully, your organization is poised to adapt and grow as the Marcellus Shale play continues to develop.

In order for your organization to grow in this ever-changing environment, you need to focus on your business structure and business development plans to ensure that you have the proper infrastructure to support growth. We recommend that you and your management team focus on the following areas:

Organization Structure
: Every organization needs a clear and formal operating and reporting structure. Every employee needs to know what his or her job is and who they report to. The organization structure needs to focus on communication and accountability, while at the same time eliminating any confusion on “who reports to whom?”

Decision Making
: Members of upper management need to recognize that they cannot make every decision every day. Clearly defined decision-making roles must be developed and communicated to employees. Wasting time making a simple decision is unacceptable. Mid-level managers and employees need to be empowered to make decisions based on the best interests of the organization. Upper management must feel confident that other managers can make the right decisions.

Business Processes: Usually, the business processes that were in place when the company started will not support the new level of business activity. Your organization must commit resources to continually examine the day-to-day business processes to identify process improvements. As business activity increases, productivity and efficiency become more important. Work schedules and deadlines, along with checklists and other controls, must be put in place to ensure that all appropriate business processes are efficient and effective.

Information Management
: With increased business activity comes additional business related-information that must be recorded and analyzed. Customer information, supplier information, operating information, financial information along with a host of other business-related information is now vitally important. The lack of accurate and timely operating and financial information can severely limit management’s ability to make good decisions. Investments must be made in technology resources designed to collect, report and measure your business activity.

Rapid growth in any industry will bring challenges. Business owners and executive management must recognize that in order for the organization to grow, the underlying infrastructure and business processes must be able to support increased business activity. Management must maintain a long-term view on making investments in people and processes in order to navigate the challenges that come with growth.

If you would like more information about these areas, or would like to meet with someone to discuss your current challenges, please contact the Schneider Downs Energy and Resources Industry Group.

© 2011 Schneider Downs. All rights-reserved. All content on this site is property of Schneider Downs unless otherwise noted and should not be used without written permission.

This advice is not intended or written to be used for, and it cannot be used for, the purpose of avoiding any federal tax penalties that may be imposed, or for promoting, marketing or recommending to another person, any tax related matter.

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The Schneider Downs Our Thoughts On blog exists to create a dialogue on issues that are important to organizations and individuals. While we enjoy sharing our ideas and insights, we’re especially interested in what you may have to say. If you have a question or a comment about this article – or any article from the Our Thoughts On blog – we hope you’ll share it with us. After all, a dialogue is an exchange of ideas, and we’d like to hear from you. Email us at contactSD@schneiderdowns.com.

Material discussed is meant for informational purposes only, and it is not to be construed as investment, tax, or legal advice. Please note that individual situations can vary. Therefore, this information should be relied upon when coordinated with individual professional advice.

© 2018 Schneider Downs. All rights-reserved. All content on this site is property of Schneider Downs unless otherwise noted and should not be used without written permission.

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