National Oilwell Varco's next generation recruitment strategy for oil industry leadership

Equipping for the future: National Oilwell Varco (NOV)

Summary of the case

The Houston-based equipment and services firm of National Oilwell Varco (NOV) has a rapidly aging workforce and is facing highly competitive economic conditions. The firm employs 20,000 employees working in manufacturing, selling, and services. The fact that the largest proportion of individuals likely to leave the firm in the near future are from the echelons of top management make it imperative that the firm embark upon a wide-scale recruitment effort. Simply recruiting more people is not enough: the question is how to recruit top talent. Senior executives have created a so-called 'Next Generation' plan to raise the profile of NOV amongst recent college graduates. NOV has resolved to expand its traditional recruiting zone to include states whose economies do not revolve around oil.

Reasons that solution will work for the circumstances described in the case

The oil industry has changed considerably in recent years. Concerns about sustainability and clean energy have been a public relations nightmare for many organizations involved in marketing fossil-fuel burning materials. New recruits in their 20s and 30s have grown up in a world of hybrid cars and recycling, and understand the need to create a new image for the oil industry. In the wake of the recent oil spill in the gulf, BP has shown an out-of-touch, outdated public relations approach. In the modern world of viral media, images of oil-saturated water, fish, and other aquatic life have raised anger about the industry as a whole.

Management at NOV must be skillful in deploying new media and advertising to realize company objectives. Selecting diverse staff members who are technically astute with a command of world languages and cultures will make NOV a company for the 21st, not simply the 20th century and ensure that the company does not become left behind in an environmentally conscious global environment.

NOV's approach to training was similarly far-thinking and far-reaching as its recruiting efforts. Eschewing specialization, it tried to create a leadership team with a thorough knowledge base of every facet of the company. The chosen new managers spent an entire year rotating different jobs, almost like a doctor has a residency in different facets of medicine, to broaden his or her area of expertise. Talent management itself is a many-layered process at NOV. The 'old boys club' of a relatively small number of homogeneous management staff had been expanded by the recruiting and training effort. The mentoring received by the candidates during their orientation year ensured that a consistent company philosophy was still infused into every segment of the organization. Finally, after the one-year rotation, NOV created a final 'draft' process modeled on the National Football League (NFL) in which each business unit recruited specific members.

Conclusion

NOV considers its program to be successful, given its high retention rate of 90%, well above the norm for the industry. Through careful screening and training, candidates with a commitment to the NOV who are a good fit for the company culture are selected and oriented to the organization. However, one problem with NOV may be raised through in final phase of 'drafting' candidates. The one year training process tries to orient candidates into the firm as a whole, and tries to make each candidate see every aspect of the company as equally important. But then the NFL 'draft' pits different business units against one another, each jockeying for the top candidates.

Furthermore, the draft might also encourage candidates to 'pitch' for themselves to be included into the most prestigious departments, to prove their worth and desirability for the company, rather than the parts of the organization for which they are most suited. A brilliant technology whiz might wish to enter management or finance because of a department's perceived desirability, and to enhance his or her company standing. And departments may seek to draft the smartest and most-lauded candidates, rather than those best suited for their specific tasks. Still, overall the shift NOV has experienced has improved the company's fortunes in terms of its ability to thrive now, and in the future.