Doing Business in 70+ Countries feat. Robert Lesnick '00

[00:00] Intro: Welcome to Owl Have You Know, a podcast from Rice Business. This episode is part of our FlightPath Series, where guests share their career journeys and stories of the Rice connections that got them where they are.

[00:13] Robert: If someone says, "Should I pursue an MBA?" I would say, absolutely. And any way that it would allow you to become more of an international citizen of the world.

[00:24] Christine: Today on Owl Have You Know: Robert Lesnick, Rice Business Executive MBA Class of 2000, who was part of the school's first Executive MBA cohort and honored as a Jones Scholar. Fast-forward two decades later, he has conducted business in more than 100 international locations and has extensive experience in energy-related businesses, serving as an executive advisor to the highest level of governments and business leaders. He talks about the evolution of global energy, being a part of that inaugural executive cohort, and his perspective now on the growth of Rice Business two decades later.

[01:01] Christine: Joining us today on Owl Have You Know is Robert Lesnick, Rice Business Class of 2000. Thank you, Robert, for joining us today.

[01:07] Robert: My pleasure.

[01:10] Christine: Well, I want to start with an overview of your career. You've been in the energy sector, what, some three decades now? And maybe, talk a little bit about some current observations of the energy industry, and maybe, where we're going.

[01:25] Robert: Sure, be happy to. It has been a long time seeing the industry grow from, you know, institutions that were still using slide rules and copy sets with three different colored papers and carbon copies, you know, to where we are today with super sophisticated exploration and production techniques. It's been really quite remarkable to see, in a real sense of dollars, that the price of oil today a little bit is abnormal. But for year-on-year, the price of oil has really gone down in real terms, just because of the technology that the industry has been able to introduce over time.

Where we stand today, and when I talk about commodity prices, it's important to realize that it's not the total supply and total demand that sets the price. It's really the incremental supply and the incremental demand. So, on the margin, today, we have a lot more demand and we have the ability to supply that surplus that's needed. And so, really, the sky becomes the limit in terms of what the ask and sell price is for the incremental barrel of oil, gasoline, natural gas—all of them are in the same sort of condition right now.

[02:37] Christine: I think one of the things that fascinates me the most with energy is how much it affects every aspect of everyone's life on the planet.

[02:45] Robert: Yeah, it's actually a very good point. Energy is built into everything we do, from the moment we wake up and turn on the light, to the stalk of broccoli that has to be shipped, either by rail or by plane or by truck, to get it to your grocery store, refrigeration. Yeah, it is just a major aspect of everybody's life and commercially throughout the world. It's just built into the price of everything.

[03:12] Christine: What drew you to the industry? And was that sort of your intent?

[03:16] Robert: Actually, I started studying environmental engineering as an undergraduate student. I kind of got into the field because there was a certain necessity to try to develop energy supplies in environmentally responsible ways. But on the flip side of that, my undergraduate degree was in philosophy, and there just wasn't a whole lot of job opportunities for philosophers in the end of the '70s. And one of the things that the industry offered was management development programs where they basically taught you the industry from scratch. And I really needed an opportunity like that to develop enough expertise that I could succeed in some business.

[04:02] Christine: So, in 2000, you went to Rice Business and graduated from the executive program. And this was the first executive cohort. What was that like to be a part of? And what really drew you to Rice Business?

[04:17] Robert: You know, when people ask me that question, I generally say it's delightful. And I choose that word with purpose. It was just really unexpectedly exciting and fulfilling every time the cohort met. The inaugural class was, I think, probably unique to the program because it was made up of about 41 students who were thinking about getting their MBAs sometime in their career for years and years and years and just couldn't find the right place and the right structure to make that happen while they were working full time. And so, the class of 2000 really had a lot of commonality into what their motivation was and what their goals were for going through the MBA program. And, you know, we've heard this through other podcasts, one of the biggest takeaways from the program is what you learn from the students that go through the program with you. And that certainly was our case as well.

[05:17] Christine: Yes, yes. So, I was in the Rice Business Executive Class of 2020. And I'm curious, in your cohort, what was sort of the makeup of industries? Was it primarily energy, people trying to, you know, get to the C-suite? Or what was the ambition there in the industries they were coming from?

[05:36] Robert: It was heavily populated with energy backgrounds, but also, a lot from the medical center. So, we had a lot of doctors who were trying to learn how to manage their business better. We had some from aerospace. But, probably, at least a third of the class was from an energy company of some sort. But again, energy has a lot of different subsets. So, we had commodity traders and we had accountants and we had business developers. So, even if you were from the energy industry, your experiences were pretty diverse.

[06:09] Christine: Yes. And I would say at least one-third of our cohort was, and then we had two doctors, a lawyer, a fire chief, I'm a former journalist, and accountants, entrepreneurs, quite a mix. And I would say, maybe, at least a dozen have made job changes or career changes after the program. Was that the case for you?

[06:33] Robert: I would say that was fairly rare. In our particular case, most of the students were fairly successful in the businesses that they were currently in and had already graduated to some fairly high-level positions. And so, the focus of the ... I think the first cohort again might be different than some of the others. We worked very closely with faculty to try to get them to teach the same cases and the same courses in a way where we weren't learning how to do things, we were learning how to use the things that the program was about. And so, they tried to teach in a slightly different angle, so that we weren't spending a lot of time calculating and manipulating. We were using the results to try to develop business strategies and business efficiencies.

[07:24] Christine: And speaking of the professors and learning, I know you have also gone on to teach at Rice Business and Georgetown Law where you've been a lecturer at the International Law Institute. What has that experience been like? And maybe, how did your Rice Business background prepare you for that?

[07:42] Robert: I like to teach, and I like to speak. And when I do, I try to have three goals in mind. The first is to educate. The second is to entertain. And the third is to motivate. And I don't think people learn if they're bored. So, try to mix all three of those, but then try to end every course or every lecture with a go-to or some homework for the people who are in attendance.

And I think that model was one that I, you know, basically learned from the Rice Program, that the professors were excellent at doing all three of those things. And I often, you know, remember learning something on a Sunday and putting it to use on a Monday inside the corporation. So, just again found that, you know, very useful and just a good model to use when I do this, teach or lecture or speak at a convention or someplace like that.

[08:40] Christine: And I love... you said you like to motivate. Do you find different generations and different audiences are motivated differently?

[08:49] Robert: You know, I could probably get myself in trouble if I start to categorize. But yeah, I think so. I think ... we are now semi-retired, my wife and I. And we joke all the time that we need to a adopt six-year-old so I can learn how to use all the technology that's out there today. And I have children who receive things in a different way.

I think, in general, attention spans seem to be shorter and memories also seem to be shorter. So, people ... and I'm not saying that's a bad thing. It's just different. So, people live for the moment. And it's not very useful to try to teach, you know, using memories from 20 or 30 years ago or history. Not that it's not important, but it's just harder for younger people to relate to history the way that I do, based on, you know, kind of the conditions that I lived through when I was their age.

[09:50] Christine: Well, as someone who works in media and marketing, I know we have about three seconds to capture someone's attention. So, I think, definitely, that number has gotten smaller and smaller and can apply to a lot of different things.

[10:01] Robert: Yeah, that actually works in business, too, especially if you're trying to conduct business in a foreign location where English isn't the counterparty's native language. You really need to be able to capture their attention very quickly and make your point early on in your conversation because it's just very hard, very fatiguing for people who don't speak English naturally to try to follow the conversation or follow the argument, if it takes a long time to make that argument.

[10:33] Christine: And you traveled a lot with your work, I was told more than 100 countries, conducted business in around 70. Were you always interested in travel? And is there a particular place that maybe sticks out to you?

[10:51] Robert: I didn't travel a lot as a young person. But I think my mother was a gypsy, and it was just part of my DNA. When I first got the opportunity to do work, it was in Trinidad and Tobago, and just found the experience absolutely fascinating and leveraged that job opportunity into a career in international business development. And it's not everybody's cup of tea. But for me, it was quite stimulating and quite fascinating to be able ... and actually felt very privileged to be able to kind of roam the globe and learn how others do business, how other cultures value things. So, it's a rare opportunity. And I was pleased to have been able to do that for the last 20 years of my career.

So, you know, people ask me what's my favorite. It's hard to try to prioritize that list. Every place has a vivid memory or two that kind of shaped who I am today. So, it's tough to answer that question in a short amount of time. Generally, I have to spend, if this is a cocktail hour kind of conversation, saying, "What is it that you want me to talk about? Prettiness of the city, the quality of the food, you know, the availability of red wine?" It's really, really difficult. I do like cities that have harbors, though. I think Cape Town and Sydney and San Francisco are just charming places to be. But, you know, I've also enjoyed going out in safari in Africa. I'd had an opportunity to go on an expedition to Antarctica and actually see how weather was created and actually got caught in a hurricane on board a boat while I was down there. So, it was, you know—

[12:32] Christine: Oh, my.

[12:33] Robert: That memory's going to stay with me for a while.

[12:38] Christine: And obviously, with COVID, business has changed. Do you think you lived in an era that we won't see again where there was so much business travel? I mean, there's obviously some jobs you have to be there, others you don't. But, you know, are companies looking for opportunities to cut costs. And will we see the kind of career you had again?

[12:57] Robert: That's an excellent question. I don't know that I know the answer to that or even could offer a lot of wisdom. When I was doing business development, it was generally myself and a very, very small team. So, I don't know that that could actually be replaced. You have to have some local knowledge. You have to have some face time with your international counterparties in the beginning. So, I think some of that can, you know, once you've established a relationship and some trust, then I think you may be able to cut out some of the travel in some of the meetings. But in terms of creating new business opportunities, I don't see that can really be done over a Zoom call.

[13:35] Christine: Definitely. After working in the private sector for about 30 years, you were selected to be a World Bank petroleum advisor. Can you talk a little bit about that transition, that role, how you were selected, and what it entailed exactly?

[13:50] Robert: Yeah, sure. So, the World Bank has a program where individuals are seconded into each other's organization. So, in my case, I was seconded into the World Bank's oil and gas advisory service group from the oil company. And a person from that organization was seconded into, not ours, but another private sector company. And the idea is to kind of cross-fertilize and provide, you know, different experiences, so that, upon each returns, you can have a different perspective about what is considered important in all the kind of stakeholder issues that come up during investments in the energy sector.

I actually sought out the opportunity because, having worked internationally for about two decades, it was pretty obvious to me that many, many state-owned enterprises, whether it's energy ministry or a state-owned oil company, just had limited capacity. So, there were a lot of very smart and capable individuals. But that layer was pretty thin. It didn't go very deep. And so, the international side of the negotiating table was really disadvantaged, compared to all the horsepower that a major oil company could bring in terms of legal background and operational and commercial experience that the negotiators would have.

So, I saw it as a unique opportunity, you know, to walk on the other side of the table and actually help countries that—especially, countries that were resource poor—and trying to develop their energy sector do a better job and share the benefits of development of energy sources, or even if it was development of major infrastructure that allowed for imports of energy into the country, just to kind of share those benefits with their society in a more efficient way and one that, you know, that again shares rent, if there is economic benefit that results from the project.

[16:10] Christine: And talking about the negotiations, International Petroleum Business Negotiator, I believe, is the actual title. What makes a good negotiator, do you think?

[17:02] Robert: Well, I can tell you what doesn't make a good negotiator. It's a person who tends to positionally bargain. That's actually not negotiation. That's a very primitive form of "I'll take everything that's on the table over to my side, and you try to get it back. And if we both have enough pieces at the end of the meeting, then we'll agree to go ahead." That's not a very enlightened form of business development and business negotiation. What you need to do is work very diligently to discover what the primary goals of the counterparty are. And in an international environment, it's quite different than what you might experience in, you know, your country. And, you know, I might talk about the U.S. for a while, but it isn't just about U.S. If it's Germany or Japan, as long as you're working inside your own country, then a lot of the goals are similar. But if you start to go cross-culturally, then the business goals and the negotiation goals could be quite different.

So, in the case of a developing country, the primary goal might be to create jobs or to improve security of energy supply, to develop social services in the areas in which you're working, to improve educational systems in the area that you're working. Those are issues that are never brought up in a business negotiation inside the United States. So, if you understand their list and you understand the cost and the resource requirements for the list, you can actually have quite a successful negotiation because you're both getting what you want, rather than sharing a very small piece of pie.

[18:16] Christine: Yes, yes. When you moved from for-profit to a nonprofit institution, did you feel that a lot of the framework that you learned in Rice Business is applicable across both?

[18:29] Robert: Oh, boy. You know, a lot of the metrics and the mathematically sensitive or mathematically-based exercises, probably, less so. But I think the courses that dealt with strategy and organizational development certainly did. And again, this is an area where you can actually create a win-win. And it didn't really matter which side of the table that I was sitting on. If I was sitting on, say, the developing country side of the table, then we would seek to strengthen our organization and have the Western counterparty helping that strengthening because it was to their advantage. It's a lot easier to negotiate with a counterparty who doesn't have to learn what you're talking about every time you meet with them. And then, once the deal is done and you start to build and operate whatever the facility is that you've negotiated to do, to have an educated counterparty there makes it much, much easier to comply with local regulations and meet local expectations.

So, doing the work upfront was really important. And it's nice to have a body of knowledge that, again, we've discussed in business school that helped, not only organize organizations, but prepared those staffs to think about change and how rapid change would affect their country's future. And if we're talking about energy projects that would create billions and billions of dollars of revenue over time, that's an incredibly important change that not only affects the oil ministry, but the ministry of finance and the ministry of industry and the whole, maybe, political system inside of a country. And so, we had to do an equal amount of work behind the scenes to determine what the benefits of the project would be to the country, and then how those benefits would be somehow shared with civil society.

[20:36] Christine: So, I've gotten sort of a general impression from young people that, maybe, some are hesitant to go into, maybe, particularly, oil and gas energy overall. What advice would you give a young person who's considering that career and has some hesitations, given the volatility, the ups and downs, and what we're seeing, and really, sort of an uncertain future?

[20:57] Robert: The media and the political systems have kind of created a false sense of, not only what the energy companies do, but how badly fossil fuels are needed to meet growing energy needs of the world. And so, it's possible for recent graduates to think that the role and the work of energy companies is short-lived, or at least oil and gas companies are short-lived. You know, that's just not true. And every major forecast group in the world recognizes that, even with all the environmental work we need to do, 60% of the world's energy supply is still going to be met with fossil fuels in 2050 and beyond. The infrastructure facilities that have been built, pipelines and power plants and refineries, they are in the trillions of dollars, and they're not going to be shut down because someone's going to build a wind farm. And I'm not saying that we shouldn't be developing alternative energy. We absolutely must. But it's a misunderstanding to think that what we're doing is replacing the basic institutions that we have around energy. That might happen in your children's children's lifetime. But for all of us who are walking the planet today, there's still a lot of work that needs to be done in our business.

[22:27] Christine: And for young people considering an MBA, any specific advice or observations that you might make to them?

[22:36] Robert: You know, over the last five years, the world's gotten very nationalistic. And the idea around globalization that was embraced for the last 20 years suddenly became not so great an idea. And I think, you know, there was a natural pendulum swing, if you will, that, during this period of transnational businesses and globalization, the world kind of defaulted to buying and supplying materials from the lowest producer and never really thought about supply chain issues or never really thought about, well, what happens if that producer stops producing for whatever reason? Where am I going to source, you know, the material if the one and only supplier that I have ceases to produce, for whatever reason?

And so, that happened during COVID. And so, people said, well, now globalization is bad. Well, it actually isn't. I mean, it's still valid. It's still, the economic fundamentals of sourcing materials and labor internationally still makes an awful lot of sense. But it has to be done in an enlightened way. So, I guess, if someone says, “Should I pursue an MBA?” I would say, absolutely. And any way that it would allow you to become more of an international citizen of the world, then I would certainly try to leverage that, because I really think business success is, on the long term, a function of how you can leverage global markets to your success.

[24:13] Christine: I'm sure picking just one from this next question will be difficult, but is there something that stands out in your mind that, maybe, you're most proud of in your career?

[24:23] Robert: Yeah. Actually, there were two projects that I worked on that won environmental awards. And that's a fairly rare thing to have inside an oil industry. So, the first one was a project that I worked on in Trinidad and Tobago that provided LPG (liquid petroleum gases) to the Caribbean and, also, to the northern coast of Brazil. At the time and still today, Brazil faces a problem with deforestation of their rainforests. And the indigenous populations in the northeast part of Brazil tend to chop down trees and then create charcoal from those trees and then use that for home cooking and heating. You know, it's a very environmentally horrible practice. And we were able to substitute LPGs to those communities. So, that won some recognition.

In Syria, I worked on a project that involved capturing gas that was being flared as a result of oil production. So, when the oil was produced, gas that was entrained in the oil also was produced. And it was just vented to the atmosphere, or it was flared. In either case, it's another environmentally harmful activity. We were able to capture that gas and pipe the gas over to a large power plant in Central Syria that was running on heavy fuel oil. That was, again, a very harmful environmental practice. So, not only were we able to stop the flaring and venting of gas, we were able to substitute a cleaner fuel for a dirtier fuel. And that also won an award.

So, those two projects, to me, were important, and also an example of how the oil industry really can improve the environment, that, you know, yeah, there are issues around the development and use of hydrocarbons because you are releasing carbon dioxide, but there is a good way to do that and a worse way to do that. I shouldn't say ... I guess, you know, there's, technically, an efficient way of doing that. And then there's some really poor efficiency and large-environmental-harm way of doing that. And so, if you're sensitive about how you're developing these projects, you can actually improve the status quo.

[26:38] Christine: One last question I'd like to ask you about, Houston is the Energy Capital of the World, will we remain there? What's sort of your outlook on this city and what will happen with energy?

[25:50] Robert: Well, I think Houston will certainly have a role to play for a long time. There's no doubt in my mind that there's still an abundant amount of activities that need to occur in the field of energy that major oil and gas companies are going to need to fund and build and operate. I do think, though, that you will probably see the market share of those activities spread out, that, if you're in the business of developing renewable power, that doesn't have to happen in Houston. That can happen in Ghana.

I just taught a class at the ILI and we were talking about some of the technology that's going to be needed to reach a lower carbon target. And that includes the making of batteries and doing some other prototypical things that, currently, it's only been done in a laboratory. And there's no reason why those things couldn't be developed in some sort of an industrial park in coastal Africa. And I think that would be a good thing if we can kind of share all the different work that needs to be done throughout the globe. And again, you know, kind of my position at this point that I think you can leverage other cultures, other habits of thinking, that, in the U.S. we tend to be very linear thinkers. So, it's facts, facts, facts, facts, assumption, probability, conclusion ... analysis, conclusion, recommendation. And there are other ways of going about problem-solving that doesn't actually have to follow that same sort of path. And you get different results, and a lot of times, better results, by thinking about problems using different methodologies.

[28:34] Christine: Definitely, definitely. Well, is there anything else you'd like to add today that I haven't asked you about?

[28:39] Robert: Well, the only thing I'd say is, if people really are interested in developing a career in international operations or business development, I can't stress enough that preparation is important. I have negotiated against other firms who I don't think were quite as prepared. And my analogy is that it's kind of like a football team that won the last game. And so, the coach says, "Well, we don't need to develop a strategy for our next opponent. We don't need to look at their films and see what they're doing. We'll just do the same thing that we've done the last game. And we'll win the next game." Well, you know, that's actually not a guarantee at all.

And so, a lot of teams don't really study enough, don't understand the history of the country that they're going in and some of the cultural nuances. And the more preparation you can do, the more likely you are to be able to develop a line of communication that's more effective than trying to just kind of push what you believe is the right process or the right solution onto somebody else who, you know, either doesn't feel that way or isn't comfortable just accepting, you know, that sort of solution. So, I would just say that the homework never stops. Keep on learning and keep on using what you learned to develop your own success.

[30:04] Christine: That is great advice. Robert Lesnick, Rice Business Class of 2000, we want to thank you so much for joining us, sharing your insights, and just talking about your just very distinguished career. We want to thank you for joining us.

[30:17] Robert: Again, it's been my pleasure. Thanks for having me.

[30:21] Outro: This has been Owl Have You Know. Thanks for listening. You can find links and more information about our guests, hosts, and announcements on our website, business.rice.edu. Please subscribe to this podcast wherever you find your favorite podcast, and leave us a comment while you're at it and let us know what you think.

Owl Have You Know is a production of Rice Business and is sponsored by the Rice Business Alumni Board. The hosts of Owl Have You Know are myself, David Droogleever, and Christine Dobbyn.