Podcast Episode #1: COVID Challenges and Embracing the Future

You can find a summary of the podcast and the links here.

Here is the full transcript for that podcast.

 

Mush Khan: All right, everybody. Welcome everyone to our inaugural podcast with the NOW Network where we reach out to industry leaders to talk about what is happening in the energy supply chain.

We’re lucky to have two amazing leaders with us this morning. Bob Kenyon, the President of ATLAS Oil, and Doug Haugh, the President of Parkland USA. So, Bob, Doug, welcome. Thanks for being with us this morning. Hope everyone is happy and safe in your world.

 

Bob Kenyon: Thank you. Pleasure to be here.

 

Doug Haugh: Thanks. Great to be here.

 

Mush Khan: Let’s just do a quick intro for the people that don’t know you guys. Who you are, what your background is in the industry and then tell us a little bit about your respective companies and then we’ll jump through a variety of questions that I think would be interesting to the audience. So, Bob, do you want to kick us off with an intro with you and what Atlas Oil is all about?

 

Bob Kenyon: Bob Kenyon, President of ATLAS Oil company, joined our organization 22 ½ years ago on December 15, 1997. And back then we were a very small, local marketer and we’ve transformed ourselves into a nationwide fuel distribution company.

We’ve got three primary value propositions, or I’ll call them verticals in our marketplace. We’ve got a large transportation services company, we’ve got an oilfield services company, and we’ve got a commercial supply and distribution organization that not only focuses on the commercial end user business, but also the marine markets, the lubricant markets and kind of everything in between.

As I said, we operate in all of 48 contiguous states got some international operations as well. And, you know, from our perspective the marketplace today is very different than it was three or four months ago, and I’m sure we’re going to talk a little bit about that. Pleasure to be here.

 

Mush Khan: Great. Well, something that I think a lot of people don’t know about you. Tell us about your very first job in the industry, not with Atlas, even before then, way, way back.

Bob Kenyon: Yeah, my first job in the industry. I graduated from college and took the lowest paying job with the best training program in an industry that I thought would survive my career, and that was to start as a district manager trainee in the convenience store industry with Speedway Super America. Back then it was called Emerald Marketing Company. And my second week on the job, I was actually working at a location in Garden City, Michigan, and I got held up at gunpoint, and I’m still here to talk about it.

 

Mush Khan: Well, so happy that you survived that adventure. But what a great intro to the industry. And I’m sure that you’ve had a lot of adventures since that time. Thanks for being with us this morning.

Doug, how about you and your background, Parkland, and also I’m curious about how you got started in the industry.

 

Doug Haugh: Yeah, so happy to be here. Doug Haugh, President of Parkland USA, we’re the US operations of a publicly traded Canadian company that operates in 25 countries now.

Across all lines of business. We operate in and supply about 3000 convenience stores. We run 50 plus terminals across North America and the Caribbean.

We operate about 3000 rail cars and a proprietary fleet for distribution, we own some pipelines. We also own a small refinery on the west coast of Canada and Vancouver.

So, we’re the downstream service all the way down to delivering home heat and propane to people’s homes. It’s servicing the consumer, either at our stores or at their home or at work. We really think about the business and those three points of interaction with our customers.

I personally started with Exxon, 26 years ago. Moved to Houston from the Southeast and this was sort of my first big excursion from home and landed at Exxon and was fortunate enough to work with them for five years and really learn the industry. And back in those days they spent a fortune on training, and I felt like I went from school to school, frankly, instead of school to work for first couple years. We didn’t quite realize at that time how important all that training was, but it’s certainly paid off in the long run. I’ve been very fortunate to have started there and have someone invest in me like that. It was a good place.

Since then I’ve done a number of things and I love the energy industry. Glad I chose it. I’m excited to work in it. I think it’s relevant and meaningful to our communities, our customers, and to all of us. I try to get kids interested in it today. Every place I can, just to get folks excited. I make sure they don’t forget about where all this stuff comes from that makes the world go.

Happy to be here today and chat about all the changes among us. Thanks for having me.

 

Mush Khan: Thanks for being with us this morning. Let’s jump right in. So, the last two or three months have been interesting to say the least, for everyone. In the world, and for us in this industry.

Bob, tell us about what the last two, three months has been like for you and for Atlas Oil and the kinds of things that you’ve had to grapple with as a leader within your organization, and how you’ve been able to work your way through that as a team.

 

Bob Kenyon: Now, interestingly enough, if we had one thing that was going on over the last 90 days it would have been a little easier. But we were dealing with the COVID pandemic, we were dealing with oil market crash and the economic slowdown. And when you put those three things all together. It was like the perfect storm of trying to manage through a very challenging business environment.

To understand what the needs of the marketplace were what customer demand was going to be, what the needs of the business were going to be and really keep the team focused on delivering the quality of service and value that we’ve been known for since our company got founded in 1985.

And you know, I think the biggest challenge for me is that every day there was a different strategy that we would have to implement. You know, we’d start today, we’d understand all the variables, we’d build the puzzle and we’d go execute. And we thought we had it all figured out for the next several months and then tomorrow would come and we’d have to pivot again and change that strategy, whether it was around people, resources, terminal rationalization, supply dynamics, pricing, back office operations. It’s just been a constant change management on a daily basis that I think has really consumed our organization. And in a good way. In some good ways because it’s helped force some of the change that we were looking to make in our business model, whether that be like contactless delivery or implementing a digital salesforce versus a face to face salesforce, and a work from home policy that we kind of had loosely in the business. Now we’ve got very structured protocols. You know security risks for IT and things that had always been part of our business, but we’ve had to really amplify those as we’ve extended our reach into people’s homes and, you know, all that kind of stuff.

So, the thing I would say is just the daily grind, the ever-changing landscape, and we’ve got a very diversified business, just like Doug does. In terms of, if we were in one line of business, it would have been a little easier. But had, you know, a downstream, midstream, and an upstream portfolio and 14 different divisions and all different types of customers and activity and trying to manage and how all those three things were going to impact.

Our landscape was it has been quite interesting, to say the least. I think I’ve got a few more gray hairs on my head, I’m pretty sure.

 

Mush Khan: Well, you’re still standing. And sometimes survival is the best measure of success. So, I know it’s been difficult for every company to navigate the way through.

Doug. How about you, tell us about the last couple of months for you and your organization and what your experience has been.

 

Doug Haugh: I’d say we mirror almost everything Bob said and, I think the areas around transportation and delivery and distribution. I think we’ve encountered many of the same challenges Bob mentioned, for us, we also directly operate a large number of C stores and that’s really been probably the most stressful part of the situation, right, because we have nearly 1000 employees, putting themselves out, effectively in harm’s way, every day to conduct business.

And not that our drivers don’t experience the same dangers. They’re out there as well, but we’ve done a lot of things to isolate the drivers in many ways, like Bob mentioned, contactless delivery. They are obviously out working hard, but they’re not interacting with hundreds or thousands of customers every day through the store. Our core focus has been in terms of trying to make sure that we keep everyone safe, that we keep our stores safe, and ultimately through that keep the customer safe. And it’s really been a daily learning process that we went through.

I think we’ve had probably close to 40 shutdowns, we were very proactive about it. If an employee had a potential exposure at home or through a spouse or a child, as soon as it’s reported we shut down the store.

We start deep cleaning, sanitize it, talk to the health department, make sure we’ve met every local rule and regulation and make sure we’re providing them feedback and we’re learning together, right, because everybody was going through this so rapidly. And then get the store reopened and get the teammates back in and we’ve been able to have zero workplace infections and we’ve kept all the stores open.

I’m really proud of the team’s efforts on that front. I mean, it’s just an amazingly good work.

In an extremely stressful, and as Bob said, every day the rules change, and the regulations change and the expectations change and the situation is changing, whether it’s test rates or infection rates.

It just puts people under a tremendous amount of stress to get their job done, so that’s been our core focus in trying every place we can to destress that situation and make people feel safe and comfortable as they can be going about their day, and just respecting their commitment and resilience to keeping the business running. It’s just been really amazing to watch.

I can’t tell you how thankful we are for every one of those employees who have found a way to get it done right.

 

Mush Khan: Some incredible stories out there. Before we turn to where we move from here. I’m curious about something from both of you. How has this impacted you as a leader, your individual mindset that perhaps in a way that didn’t affect you with other business challenges? Bob, how about you, from what’s unique about this, and how has that affected you as an individual leader.

 

Bob Kenyon: The biggest thing that I’ve had to really focus on is truly exercising that emotional intelligence part of being a leader because our teammates are not only impacted by what’s going on at work, but they’re also impacted by what’s going on at home. And before we didn’t really have to think about, well, your son or daughter are getting homeschooled. Or you can’t get groceries and got to schedule them on delivery days and all that kind of stuff. And we’ve really had to try to really change our expectations of a normal work life balance and get comfortable in a very hands on business environment with folks.

Being able to have the flexibility that they need to manage through these really challenging, and I’ll call it diverse and unusual times, and it’s worked. I think we’ve had to really over communicate. I think that’s kind of what Doug was talking about.

We’ve had really talk about things that historically would be all business updates, right.  We’d be talking about what’s going on in the industry, what’s going on with our with our customers, what’s going on with our operations.

We’ve had to incorporate what’s going on in the world, what’s going on with the pandemic, what’s going on with the economy, what’s going on at home. And we’ve really had to reinforce safety on a daily basis, not just in the operational level, but just across the entire business because we want to get people comfortable that we’re doing the right things as a business to protect their interests, the interest of our customers. Their health and safety is something we’ve always been mindful of, but we’ve had to become great at it, and I don’t think we were always great at it. It was just something that we kind of took for granted, probably because we were pretty good. We didn’t have to really manage through this stuff.

It’s really for me that I’ve had to find another gear on how do I connect with the emotional state of each individual teammate that we’re relying on to do our job to deliver the value for our customers on a daily basis even more deeply than historically I’ve done so.

 

Mush Khan: I mean, that’s such an interesting comment Bob, about sort of the level of empathy that leaders have to have now, in a much more holistic way as you just described. It’s not just whatever the work interaction is but a little bit of home or personal life interaction. Now you’re having to sort of manage the entire energy state of that team member that works for you, because it’s hard to separate what’s happening in the world from what’s happening at work.

It’s a tremendous challenge. Doug, how about you? How has this affected you as a leader?

 

Doug Haugh: I have had some similar effects. The boundaries have moved, right. What you have to be comfortable talking about and understanding as a team has radically changed. We’ve found out things about our teammate’s children, parents, brothers, sisters, that frankly, in many ways, we all just sort of had that perspective that well, that’s really not any of our business.

Now it’s a factor in terms of how you get work done.  What their pressures, stresses, and needs are every day. It’s probably something that’s always been there that has been so highly exacerbated by this situation.

I think everybody’s had to get better at having those 360 discussions about people’s lives.  And taking that sort of view of the whole person, like there is no work person and home person and family person and private person, you got to deal with the whole package all the time. And you yourself have to be comfortable with that, right, and be fully vulnerable and exposed and comfortable discussing virtually any of those situations.

As Bob said. If you’re not in a position to really make sure that you’ve got the right degree of empathy towards what everybody’s faced, you don’t know how to help lead them and help coach them to get through it.  But, it’s definitely changed the boundaries of the work discussion versus the private or personal discussion or family discussion, now it’s all one big discussion.  I mean, our team meetings are entirely different affairs than they were three to six months ago.

Yeah, I’d say as a team, we’re a lot more intimate and comfortable, and comforting, and supportive of each other than we probably ever were before. Just because we didn’t feel like it was okay to talk about some of those things.

If you have a child with a chronic illness, you don’t necessarily want to walk around advertising that all day. Some people do, some people don’t. But now, everybody kind of just got to a good place to talk about it and feel comfortable about it and support each other so it’s definitely different.

Bob Kenyon: The follow up, really quick. I will also indicate, and Doug can probably relate to this. It’s been harder as a leader to keep the team focused on what really matters. On just everyday basic execution, right, because I’m a big believer that when you’re faced with lots of challenges, the thing that gets you back on the rails is to execute the basics, and execute the basics really well.

In order to be able to really survive through, and thrive through these challenging times is getting everybody really zeroed in and focused on those fundamentals of the business and just executing those. Because that’s what’s going to really change the game as we start to ramp back up and get everybody back to work and focused on the positivity.

But getting folks there on a daily basis has been a real challenge. Why? Because there’s all this noise going on in the economy, in the political and riots, their kids at home. And so, I think that’s been a real challenge as a leader and one, actually that’s made me probably better at communicating and breaking and synthesizing things down even more simply.

I’m not talking in big vision statements, but like, here’s what we need to do today versus here’s what we need to do over the next 90 days or the next six months, or the next 12 months and that has been enlightening, challenging, and also refreshing because it’s has opened up conversations that historically wouldn’t have been had in normal business.

 

Mush Khan: Sure, yeah. Thanks, Bob. I think that’s great, great insights.

Well, let’s look forward. Now let’s talk about how you see things going forward in terms of business recovery and, dare I say, in growth of the business, which may be hard to imagine, to even contemplate right now, but at some point we do have to talk about how we move forward from here. So, we’ve had these amazing experiences, difficult experiences. In the world, and within our industry, in the company that each of you run, and we want to figure out a way to move forward from here.

Doug, you said something that I think really says a lot about where we are right now, in that the boundaries have moved. And as you think about your companies and your teams and where you think the industry is going to go. How do you see that future? Let’s say, perhaps for the balance of 2020 and then beyond.

Bob, what are your thoughts on going forward from here? And what’s the most important thing?

 

Bob Kenyon: I’d kind of compartmentalize them in a couple of different areas. Number one, I think the companies that have differentiated themselves around a culture of flexibility, a culture of safety, a culture of communication, a culture of collaboration and culture of innovation.

Those are going to be the organizations that are going to thrive as the world gets back to the new normal. And we’ve tried to position Atlas as that organization in the fuel distribution business because by doing that we’re going to attract and retain the right talent. We’re going to attract and retain the right customers, and we’re going to position ourselves for my next thing. Which I call revenue diversification and industry consolidation.

Right, there are going to be people that are looking for others or companies to do more with less. And we focused around, you know, adding portfolios of value to our overall business over the last few months that we didn’t have before that our customers are going to rely on us to deliver over the next several years. And I think that’s going to open up doors for industry consolidation and M&A activity.

And then finally, I think we’ve got to figure out how we’re going to sell differently in the new normal. This digital sales initiative, how are we going to connect dots in a contactless, innovative technology based industry that is slow to adopt technology? How are we going to differentiate ourselves because I think that’s what companies, B2B and B2C consumers, are going to be looking for. They’re going to be looking for people who deliver Amazon like value in our industry. And there’s not many of us that do that.

And, I think there’s a huge blue ocean of opportunity for those companies like an Atlas and like a Parkland that will make those investments that will change their business model to adapt to what is going to be the new demands for customers in the marketplace.

 

Mush Khan: Bob, let me follow up on one of the things you said about the difficulty of change in our industry and, and especially when it comes to new ways of thinking or technology, etc. How do you think the industry should address that point? The idea that look, now’s the time to really rethink things like contactless delivery or how we help customers experience our brands. What do we think we need to do to really embrace that change and make that change happen once and for all?

 

Bob Kenyon: Well, there’s a couple things. Number one, I think the industry’s got to get comfortable with strong partnership connections and an overall ecosystem that works together, as opposed to works in independent silos, and that’s been a challenge in our business for many, many, many years because everybody has their finite geography. Their finite capability. Their finite list of customers and don’t play in my sandbox.

As we start to see what transforms in the marketplace, those boundaries as Doug said, are going to have to change and there’s going to be have to be plus signs in between organizations historically that have had, you know, head butting competition.

Number two, I think the industry has to change. There is no choice anymore. Consumers today, whether it’s a business or an individual, they want to leverage technology.  These mobile devices that everybody’s attached to, we’ve got to figure out a way to do business through that and if we don’t, somebody will.

Because there are logistics platforms out there today that don’t deliver fuel, that could if somebody like you, I, or Doug, or somebody else joined those organizations and helped them architect that vision. I think it’s not an opportunity of if, it’s actually when. And I think those companies that adapt quickly are going to position themselves for exponential growth over the next several, several months.

 

Mush Khan: Great, Bob, thank you. Doug. How about you? What do you see going forward from here, what’s important? How do you view growth?

 

Doug Haugh: Now 21 years later, after starting my first technology software company and thinking, hey, this is going to go great. Well, we’ll bring all this automation and customer interaction and friction reducing transaction capability to the industry for us. I was a young, naïve, much younger and much more naive man at the time, but you know it is sort of even now stunning to me how little progress, frankly, many in the industry have made.

How many businesses we encounter that are still, you know, literally shuffling paper around deliveries. My team here gets sick of hearing me say it, but I rave about the Domino’s Pizza app. I order a pizza for $9, it tells me everything about my order. It tells me it’s being prepared tells me it’s in the oven tells me it’s on its way. And now I’ve got GPS tracking of the driver, all the way to my front porch.

And then somebody orders a $20,000 load of fuel and we don’t tell them anything until five days 10 days later with the invoice. I don’t know if the contrast can be wider in that customer experience. And as Bob said, if the existing industry players like ourselves can’t successfully adopt those technologies and improve that customer experience, then somebody will because the technology is much more available now, just with everything that’s happened with the cloud platforms themselves. Back then, we had to build our own data centers and I mean the capital investment and the barriers to entry were massive. And now it’s much more about know how and domain expertise and relationships. I think those things are really good at what drive it, but it’s going to be interesting to see how much of this is disruption versus how much of it is evolution. And I don’t think we know yet.

But I do agree with Bob, I think it’s finally gotten to the point, and I think the pandemic has tipped it over, that customers just are no longer willing to accept from our industry the previous way of doing business. I mean that everything else they do is mobilized. They get transparency, they have insight, they have an opportunity to give real time feedback on their experience, what it was like how they feel about it.  Frankly, our industries, outside of some of the highly interactive loyalty platforms that a few of the retailers have deployed on the consumer side, with even those are still fairly rare. They are pretty common overall in terms of people having something. But the really sophisticated ones, that are highly engaging on the consumer side are still pretty nascent compared to other industries. I think that’s going to drive change.

And as Bob mentioned it, from a sales and marketing standpoint I can’t imagine how you go back to the previous world of putting 100 reps on the on the ground and they can go visit with folks and make sales calls, and your business will grow. I think there’s always going to be a need for human contact, but I think there has to be completely new channels that are very common in other industries and frankly haven’t been common in our business at all. But I do think that that’s going to change. And for those of us that want to keep growing and being successful customers we are going to have to help lead that and obviously evolve our organizations as fast as we can, sometimes kicking and screaming. But we’ve got to get in there.

 

Mush Khan: I appreciate that Doug. One follow-up question that you actually talked about earlier, that I think dovetails into some of your comments about young people and the opportunity for young people in our industry. If you’re talking to that that baby face Doug, 21 years ago, and you want to convince that person to come into our industry. What’s your pitch to them about why they should come into what looks like from the outside, and perhaps is, a very traditional stodgy kind of an industry?

 

Doug Haugh: I try to visit campuses whenever I can. No matter how much energy you put into it, you come away with far more than you showed up with.

Just starting with the fundamentals on one hand, saying other than food, water, and shelter, energy is one of those pillars of our civilization that we have to continue to get better at. You have to continue to evolve.  People say you know fuels or oil is all going away. I’m like, yeah, at some point, you’re totally right. I’m not going to argue that with you, but there’s a lot of work to do. Who’s going to get us there, right, like who’s going to get us from where we’re at to an entirely sustainable, scalable, affordable future?

Everybody would like power, fuel, and energy itself to be cleaner and cheaper and more sustainable. Who wouldn’t? All of us do. Right? But, my pitch is always if you want to really do something about that, get in the business and get to work. Don’t stand on the outside and complain. We can complain about our business and carbon climate changing emissions and I mean, all those things and all those criticisms are certainly legitimate, but sitting back and complaining isn’t going to do anything.

If you really do care about those things, then lean in and do something about it, and the chance to do that is to understand our industry. You’re not going to understand that from the outside looking in.  And it’s too big and important to neglect as a civilization, right, like we either get this right or we got a much bigger problem.

 

Mush Khan: Yeah. Well said. Well, let’s wrap up with one final question for both of you.

We talked about the tremendous challenges that we’ve all gone through, and many challenges will remain with us for a long time. If you’re talking to a leader out there, what’s the one sort of positive message you can give that person? Realistic and positive. What would you tell that person about how to move forward from here?

Bob, I’m going to start with you. And perhaps you can think about even someone in your organization. What’s that one positive takeaway that you think is important for the audience to hear from you.

 

Bob Kenyon: I’m a big momentum guy, right. I always talk to everybody about what’s the momentum in the business. When you’ve got all this negative or challenging energy around you, focus on what’s ahead and what your momentum is towards that you typically will achieve good results. And I think there is really strong momentum in the market right now. We’re seeing demand pickup. We’re seeing inventories get cleaned up. We’re seeing the economy peak. Yes, there are some hotspots of COVID, but I think this is here to stay for a while in terms of a vaccine.

But at the end of the day, there are very strong signs that we are in a recovery period. And how do we as an organization, maximize our opportunity on the slope. And my message to the team is to say, all right, we know, and we all believe that we hit the bottom and we’re on our way up.

What’s our game plan to be on the forecourt, to be way ahead of our competitors, to be engaged with our customers, to be engaged in our prospects and make sure that as they’re ramping up, we’re right in sync with them. And we’re delivering on the value, and on the execution, and on the safety right along with them so that at the end of the day we get there faster. And we’re starting to see some really good signs across all lines of our business of that recovery.

So, that’s kind of my message to the team on a daily basis is like look, that’s rearview mirror stuff, let’s focus on the road ahead. Be mindful of the rearview mirror. But let’s really look outside the windshield and understand what are the barriers in front of us. And how are we going to overcome them.

 

Mush Khan: Thanks. Doug. What about you? What’s your road ahead message for the audience?

 

Doug Haugh: One, trying to take a moment and do remind folks that it’s really an opportunity to be grateful for the fact that all of our communities recognize how essential we are to the community and supported us so that we could help them. I think kind of recommitting to that community involvement. I’d say we’re more engaged with the communities we live in work in than we ever have been.

Those boundaries shifted. We had to have different, new deeper discussions with everybody from regulators, to leaders, to mayor’s, to health officials. I just think that’s a golden opportunity to really improve and continue to deepen those community ties and relationships because to me that’s always the heart of sustainable growth. Making sure that you’re moving with your community and helping support it and earning your place and earning their trust. And ultimately, earning their business. I think that’s been a really positive side effect.

And then back to some of my other comments, I have endless optimism for this industry because it’s so important. How can you not be, I mean it has to get done. Yes, we will have ups and downs but what a chance to have an impact on people’s lives, on the successes of businesses.  Just the ability for our communities and economies and cities where we work and live to get better every day. And I think about applying technology, there’s a lot of things where we’ve learned we can be safer.

Like Bob made a great point that you know we thought we were good at safety and I think we were good. Do I think we were great? No. I mean we just we found too many things that are like hey, we could do this different better and lower risk, protect people more and find productivity wins at the same time. It’s not all just costs.  You can get better and faster and cheaper if you keep pushing, and this forced us to push those boundaries in ways we hadn’t before. I think they’ll be great opportunities coming from that work.

 

Mush Khan: Thank you. I appreciate it. I’m going to combine two phrases that you each used. The idea of owning our place in the road ahead. I think that we’ve got tremendous opportunity to do that. Bob, Doug, thank you so much for your time today. What a great conversation. I know that that I’m certainly grateful for your time and I know that the audience will be too. And we’re all grateful for your contribution to this industry over a couple of decades and hope that we’ll have a couple more decades from each of you as we as we move forward. I’m sure we will. So, thanks again guys, very much and thanks for everyone for listening in, take care.

And we’re out. Thanks, guys. I appreciate it very much.

 

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