Tundra Oil & Gas Partnership is a success story literally built from the ground up.

In 1980, the company started with seven basic "stripper" wells, each producing an average of 10 barrels of oil a day. Today, Tundra is the largest oil and gas company in Manitoba, drilling more than 130 new wells each year and producing over 16,000 barrels a day. The pinnacle of this success came in 2004, when Tundra struck one of the largest crude oil reservoirs in the province's history near the rural community of Sinclair.

A subsidiary of James Richardson & Sons, Ltd., Tundra is a privately held company that employs 123 full-time people and 35 contract workers in its corporate head office in Winnipeg, its field office in Virden and its geological exploration office in Calgary.

As president and chief executive officer Dan MacLean explains, Tundra's rapid rate of growth, including an influx of new personnel, has encouraged the company to drill down deep and re-examine its people practices, its culture and its organizational processes.

Q: How has Tundra's growth changed the focus of organization?

A: Thirty years ago, our company was barely producing 100 barrels per day (bpd). Today, we are at 16,000 bpd, meaning that we are no longer considered a small mom-and-pop operation but a mid-cap company. Along with that, we have shifted the fundamentals of our organization from primary recovery -- when you drill a well into an oil reservoir, put a pump on it and bring the oil out of the ground until the well stops producing -- to enhanced recovery. With enhanced recovery, we're putting energy back into the ground by injecting water into the reservoir and building increased pressure to sweep out more oil. Having reached this new level of complexity has required greater technical input while giving us a long-term focus.

Q: Has increased production created any new challenges from a people perspective?

A: I think it's been a challenge for us to shift away from that small-company mentality. Earlier in our history, there was a need to pinch every penny to save on operating costs and everyone had to be cognizant of economic sensitivities. Sometimes, there is still a residual tendency to want to "save" the company by honing in on the cost of each activity. While we want to preserve certain elements of our close-knit culture, we also want our people to open up to the idea that it's OK to spend a little in order to try new things. We're no longer drilling a single well here, a single well there; we're carrying out much larger programs with more complex technology. We can take larger risks because we are able to absorb the costs. Also on the people side, I'm pleased to say that we have an excellent retention rate. While this provides great stability and continuity, it can also present challenges. For instance, when trying to implement change you may find yourself running into a few "but this is the way we've always done things" walls on the way.

Q: As a relatively new company president, what changes have you introduced at Tundra?

A: When I joined Tundra in 2008, I started as vice-president of engineering and exploitation in the Calgary office. This gave me the benefit of seeing the organization with a different set of eyes before being promoted to president. When I stepped into this role last year, I realized there were a huge number of opportunities for our people, but first, we needed to decentralize the decision making. My first directive was to push some of the authority back to our managers. Instead of telling them what to do, I said, "What can you tell me?" Rather than taking a top-down approach with few people involved in making decisions, the new process engages managers from all three offices. It creates greater ownership and requires an increased level of transparency.

Q: Apart from your management team, how are you empowering and engaging employees?

A: We have traditionally functioned in separate silos of engineering, exploration, production, marketing, finance, land lease management and so on. But over the past six months, we have been transitioning into more of a matrix-style organization. We have identified seven geographical areas where we want to focus our growth and have created special project teams of employees from across all departments to work together and see it through. In conjunction with management, each team has been empowered to create a mission, vision and values statement, a budget, and all metrics required to support the projects Tundra needs to grow its business in those geographical areas. This has been a major organizational and cultural shift. It provides an opportunity for our people to engage in a wider spectrum of the business and see how all the moving parts fit together. It also allows us to measure project performance. By understanding where our successes are, we can effectively allocate capital to facilitate future growth.

Q: What do you consider to be Tundra's recruitment advantage in a competitive industry?

A: The large oil companies are not hiring at the same rates they once were, so we mostly compete against smaller companies for junior employees. The problem is that graduates coming out of university have very little experience and small companies cannot offer them much in the way of mentoring. This leaves young employees with a lot of responsibility and not enough training. At Tundra, we can provide them with extraordinary opportunities supported by a one-of-a-kind training environment. Because of the enhanced oil recovery techniques and current technology we are using, new employees get the same level of training that they would at a large, international oil company while being mentored by senior staff. Plus, because we are a mid-sized company, we can give them a chance to see the entire business process of exploring, developing, producing and abandoning wells. I strongly believe this is an ideal teaching and training model.

Q: With your field staff growing, how has your training process evolved?

A: Our operations team is one of our most vital groups. They're the ones on the front line when it's -20C making sure the pumps are going, they're the ones taking calls at two in the morning and many times, they're the ones talking with landowners. From a training standpoint, we take a very hands-on approach to making sure they understand the technology and the equipment. We have implemented a new program for field operations staff that combines web based and in-field competence training. But an equally significant component of their training, and a key part of our culture, is the emphasis we place on personal and environmental safety. We have monthly safety meetings, a quarterly safety gathering and have started an ongoing program that recognizes and rewards safe work practices. Ultimately, we want to ensure our people get home safely each night and feel comfortable knowing they are coming to work in a safe environment every day.

Q: When it comes to leading people, what lessons have you learned along the way?

A: In 26 years of working in large international companies, I experienced a plethora of good and bad management styles. The managers that resonated most energized me; like being part of an exciting project where everyone's contributing and clicking at the same time. At the other end of the spectrum were those like the "sound bite" manager: they poke their head in your door, give you a "sound bite" of directive and before you can get a sense of how it fits into the big picture, they disappear again. Over the years, learning how not to treat people has been as much a lesson as how they should be treated -- which, by the way, is the exactly the same as I want to be treated.

-- With reporting by Barbara Chabai

John McFerran, PhD, F. CHRP, is founder and president of People First HR Services Ltd. For more information, visit www.peoplefirsthr.com.

Republished from the Winnipeg Free Press print edition March 27, 2010 I1