Milestones of Success

There isn't a human being who can be right about all things at all times--and this is at least as true of businessmen as it is of bartenders, biologists or bus drivers. On the other hand, there are times when a businessman makes what prove to be exactly the right decisions and takes what are precisely the proper courses of action in certain situations. It is at these times that he achieves the major successes that form the milestones in his business career.

My own first big success stemmed from the purchase of the Nancy Taylor Allotment Lease in Oklahoma in 1915. Although I realized only some $12,000 profit after drilling my first producing well on the property and then selling the lease, this initial triumph had a very important effect on my life. Several factors involved in the Nancy Taylor Allotment episode served to determine the course my business career would thenceforth follow.

First, I had originally bought the lease from under the noses of older, more experienced oilmen--and this gave me the confidence I needed in my own judgment and basic business ability. Then, having drilled a well and struck oil, I gained confidence in my abilities as an independent oil operator. Last--but far from least--the exhilaration I derived from this initial success was enough to convince me that I would never be content working anywhere but in the oil business.

I can recall other notable milestone successes during my wildcatting days. In 1921, the California Oil Rush was reaching new peak levels. Notwithstanding a break in crude-oil prices earlier in the year, the petroleum industry was rapidly getting back to normal, and by fall, the fever to open new producing fields in Southern California had once more reached epidemic proportions.

My father and I were contemplating a joint exploration and drilling venture in Southern California, but we hadn't yet made up our minds exactly where to begin our "prospecting" operations. In October 1921, a new field was opened up in the Santa Fe Springs area south of Los Angeles. During the first days of November, my father and I decided to drive down to Santa Fe Springs to see for ourselves whether the region held any further promise.

Wanting to have the best of expert advice, we retained a highly regarded geologist to accompany us. I drove the car, and when we reached the area, we rode around slowly, all three of us carefully eying the topography of the land. The geologist wasn't very enthusiastic about what he saw.

"I'd say there were much better possibilities elsewhere in Southern California," he declared dourly as we drove along Telegraph Avenue. "This doesn't look like very promising oil land to me."

A few moments later, we saw a long freight train laboring across what appeared to be a level expanse until it reached the crossing at Telegraph Avenue. After that, it began to gather momentum; although the locomotive's power eased off, the train steadily picked up speed. Clearly, there was a slight gradient --imperceptible to the eye--that had its summit at Telegraph Avenue. The implications of this struck both my father and me at the same moment.

"Did you see that?" my father demanded, a note of excitement creeping into his voice.

"I'll say I did!" I exclaimed.

"This is oil land--I'm sure of it!" Father declared. "The top of the structure--the dome--is right here along Telegraph Avenue!"

I nodded my agreement enthusiastically--and even our companion, the geologist, had to admit that we had probably made a valuable discovery.

On November 21, 1921, my father and I bought the Nordstrom Lease covering four lots located right on Telegraph Avenue in Santa Fe Springs. We spudded our first well on the property a short time later, and it came in early the following year to produce 2300 barrels daily.

The real value of the discovery we'd made while (continued on page 98)Milestones of Success(continued from page 77) watching the freight train chuff its way past the Telegraph Avenue crossing became apparent soon enough. The Nordstrom Lease property proved to be extremely rich in oil, and we drilled additional wells, all of which proved to be excellent producers. In the 15 years between 1922 and 1937, the wells we drilled on the Nordstrom Lease sites showed a total excess recovery--a total clear profit --of $6,387,946!

The Athens Lease was another turning-point success for me. I bought the lease in 1924--on my own account--paying about $12,000 for it. The lease covered a property located in what were then the southern suburbs of the city of Los Angeles--on Hoover Street between 127th and 128th Streets.

Other operators were already drilling in the area, but they were going after oil in the deep zone. After taking a careful look at the drilling operations then under way, I became convinced that greater production could be obtained at considerably less expense if one drilled for oil in the upper zone, and went ahead with my own operations accordingly, personally supervising the drilling.

I completed my first Athens Lease well on February 16, 1925, and it yielded 1500 barrels daily. Three weeks later, I spudded my second well and brought it in within six days for an initial daily yield of 2000 barrels. The two wells were to show an excess recovery of over $400,000--and other operators promptly began to alter their drilling programs to go after the oil I had proved existed in abundance in the upper zone.

A year later, I was offered the Cleaver Lease in Alamitos Heights by a man who had bought it less than a week earlier. I knew the property and felt certain that there was oil on it.

"How much do you want for the lease?" I asked.

"I paid four thousand dollars--and I'm satisfied to double my money," came the reply. I didn't argue--not for a single moment.

"You've just made a sale," I grinned, taking out my personal checkbook and writing a check for $8000.

The four wells I drilled on the Cleaver Lease property brought in almost $800,000 in clear profit during the next 12 years.

These and other fortuitous lease purchases and drilling operations were all important successes during the period when I was just a wildcatting operator. A truly major triumph of an entirely different sort was my successful campaign to gain control of the Tide Water Associated Oil Company--a campaign that began in March 1932 and did not end in final victory until almost 20 years later.

There is, of course, a vast difference between buying an oil lease and drilling a well and setting out to buy a controlling interest in a major oil company. Tide Water Associated was an old, established American firm. It had been founded in 1878 as the Tide Water Pipe Company to build and operate a then-revolutionary 104-mile-long pipeline for transporting oil from Titusville to Williamsport in Pennsylvania. In the decades that followed, the company had grown into one of the American petroleum industry's giants. By 1932, it was among the 12 or 15 largest oil companies in the United States.

Tide Water Associated was big business--and its incumbent directors and management personnel were big businessmen with a great deal of experience and with huge financial resources behind them. By sharp contrast, I was nothing more than a comparatively insignificant upstart wildcatting oil operator.

Nonetheless, I made what proved to be the right decisions, and--with the invaluable assistance and advice of my aides and associates--took the right steps at the right times. It was a long, difficult fight, but in the end, I won it. Much of the credit for the victory belongs to the men who remained fiercely loyal and confident even when the outlook was so bleak that it appeared virtually hopeless.

The late David Hecht, my brilliant and tireless attorney, guided the myriad operations involved through labyrinthine legal mazes. E. F. Hutton and Company brokers Gordon Crary, Ruloff Cutten and Don Phillips worked miracles for me with their adroit handling of stock transactions on the New York Stock Exchange. Emil Kluth and Harold Rowland were only two among many who gave me moral and material support when such support was needed most. Without the help of these men, the campaign that resulted in my biggest single business triumph might well have ended as my biggest and most dismal business failure.

The success of my companies' operations in the Middle East has been another important milestone in my business career. There, again, it was necessary to make the right decisions and follow the correct course of action--and the allowable margin for error was slim, indeed.

Admittedly, by the time I embarked on the Middle Eastern venture, I was a seasoned businessman. Even so, it was a giant step into what, for me, were relatively uncharted fields, and the problems involved were proportionately as formidable as any I had encountered previously during my business career.

In short, what I sought was a concession to drill for oil in the neutral zone, a largely barren desert area lying between the kingdom of Saudi Arabia and the sheikdom of Kuwait on the Persian Gulf--actually an arbitrarily defined geographical area owned jointly by the two states.

In 1948, two half concessions--one Kuwaiti, the other Saudi Arabian--became available. Another firm--formed by a consortium of oil companies--obtained the half that was the Sheik of Kuwait's to grant. There remained the other half --the 50-percent concession controlled by His Majesty, King Ibn Saud of Saudi Arabia.

My initial decision to enter into the bidding for this latter half was influenced in no small part by the highly favorable reports on the region that were made by Dr. Paul Walton and Emil Kluth, outstanding geologists associated with my companies. They concurred in the opinion that tremendous quantities of oil lay beneath the trackless wasteland of the neutral zone and recommended that I take the multimillion-dollar gamble necessary to obtain the concession and begin prospecting and drilling operations.

"In the Name of God, the Merciful and Compassionate, this agreement is entered into in Riyadh on the 22nd day of the month of Rabie II, in the year 1368, corresponding to the 20th day of February, 1949 ..." Thus reads the opening line of the voluminous agreement that my representative, Barney Hadfield, signed when negotiations for the concession had been successfully concluded.

The agreement granted me a 60-year concession on a half interest in neutral-zone oil. In consideration, I made an immediate cash payment of $12,500,000--but this was only the beginning. I would spend a total of considerably more than three times that amount before the first barrel of crude oil was brought in.

Now, the half interest granted me by the King of Saudi Arabia was, like the half granted to the other company by the Sheik of Kuwait, an undivided half--an indivisible share. In other words, although two companies had been granted separate concessions by the rulers of two different states having cocontrol over the neutral zone, the companies were required to share equally in oil discovered and produced by either. In this way, Saudi Arabia and Kuwait would each receive revenues and royalties according to the terms of their respective concession agreements, but based on equal quantities of oil.

It would hardly seem necessary to point out that this arrangement posed many knotty problems--some of which occasionally grew to the proportions of major dilemmas. For example, the company that had obtained its half-interest concession from the Sheik of Kuwait had its own ideas about prospecting and drilling for oil in the neutral zone. These views did not coincide with those (continued on page 146)Milestones of Success(continued from page 98) shared by my associates and me, with the inevitable result that a great deal of time that could have been devoted to finding and producing oil was spent in negotiation and controversy over who was to do what where, when and how.

I wanted to drill in a certain region, but the other firm's experts insisted on starting drilling operations in another spot some miles away. I capitulated, and a great deal of time--some four years in all--and fantastic sums of money were spent in futile operations.

Eventually, however, it came our team's turn to call the shots. In 1953, we discovered one field which, by 1957, was producing nearly 9,000,000 barrels annually. In 1955, we located another field and drilled two wells which were producing at an annual rate of some 2,000,000 barrels by the following year.

Then, in 1957, having obtained a considerable degree of autonomy in regard to our oil-prospecting operations, we really hit our stride. We quickly discovered several additional new fields and drilled many more wells--boosting neutral-zone production into the tens of millions of barrels annually. Another success had been achieved, but the end is nowhere in sight. Independent geological surveys state that proven reserves in place in the area covered by my concession exceed 13.5 billion barrels!

My business career began when I struck oil on the Nancy Taylor Allotment in Oklahoma and realized a $12,000 profit after selling the lease on the property. I encountered many difficulties and experienced many disappointments in the years that followed. But I can chart the course of my career by such milestone successes as those I have described.

I think the same holds true for any successful businessman. His first notable success serves to give direction and impetus to his career in whatever field he enters. If he possesses the inclinations of the true business entrepreneur, he strives constantly to achieve progressively bigger successes. Wherever possible, he builds each new one on the foundations provided by those he has already achieved.

To the real entrepreneur, there is no such thing as an ultimate triumph. His aim is to make a continuing and over-all success of his career, and he knows the only way this can be accomplished is by achieving a continuing series of successes.

The businessman who wants to reach the top can afford to be pleased when he manages to accomplish an end against the odds he inevitably faces. But he cannot afford to allow any of his achievements to make him complacent.

While the successful businessman recognizes his notable achievements for their importance, he regards them primarily as road markers that serve as invaluable aids in guiding the future course of his business operations and career.

In my own case, I firmly determined to stay in the oil business after my initial success with the Nancy Taylor Allotment Lease. Subsequent successes as a wildcatter provided me with additional experience, produced more profits that I could use as working capital to expand my operations and gave me more confidence in my business ability. Each of my milestone successes also served to whet my appetite for facing increasingly greater challenges.

By the time I started my campaign to gain control of the Tide Water Associated Oil Company, I felt that I had served a hard, instructive apprenticeship in the oil business. I had learned my oilman's trade from the bottom up.

I believed that I'd learned my lessons well. I wanted to apply my knowledge to projects of broader scope. I was convinced that by implementing ideas and plans I had formulated in the oil fields, I could direct the operations of Tide Water Associated more successfully than they were then being directed by the company's incumbent management.

I did, of course, eventually succeed in my campaign to gain control of Tide Water Associated--but only after a long, uphill fight against odds that look frightening even in retrospect, long after the battle was won. Yet, I consider my victory only a minor achievement compared to the far more important and meaningful success my associates and I achieved in building up the company after I had gained control of it.

The assets of Tidewater Oil Company --the name was changed some years ago --have multiplied until they now exceed $800,000,000. Tidewater's operations have mushroomed in size and scope; it operates with greater efficiency and with greater benefit to stockholders, employees, customers and the public at large. Nevertheless, I do not consider even these achievements anywhere near final. In my opinion, the company still has far to go.

My attitudes toward the operations of Getty interests in the Middle East conform to similar patterns. Obtaining the neutral-zone concession, locating the area's vast oil deposits and eventually attaining high levels of oil production there are all achievements that can be considered milestone successes in my career. But the job in our Middle East oil fields is far from finished. There is room there, too, for expansion and improvement--room for more and bigger successes.

I believe that to be truly successful, the businessman must first discard--or, at the very least, greatly discount--most traditional concepts of success. And he should critically examine whatever preconceived theories he may have about gauging or achieving it.

Let me reiterate my contention that there is no such thing as the ultimate success in any business that operates under a competitive, free-enterprise system. Nor is there any such thing as success that is inherently lasting, that will not fade unless it is nurtured.

There is nothing constant about business. The business world is a changing one; the business scene varies from day to day and even from hour to hour. Thus, no single achievement will long retain its initial value. The startling success of today can soon become obsolete and worthless--the abject failure of tomorrow.

I learned early in my career that an oil well that came in for, say, 2000 barrels a day initial production could run dry long before the costs of drilling it had been recovered.

By the same token, a manufacturer may put a revolutionary new product on the market one week only to have a competitor introduce an even more revolutionary one the next. A sales campaign that is sweeping the market can be buried by the avalanche of another that proves to be more effective. The programs introduced by accompany president may achieve great success for a time and then be wrecked overnight by developments over which neither he nor anyone in the company has any control.

Success is at best fleeting. The only way in which a businessman can hope to achieve anything remotely approaching lasting success is by striving constantly for success in everything he attempts.

In this, a rough analogy can be drawn between the businessman and the motion-picture or stage star. A relatively unknown actor may be catapulted to stardom because of a part he plays in a single production. Overnight he becomes a popular idol, and he is swamped with offers from producers. But what happens if his next role is a bad one, or if the next production in which he appears is a flop? His popularity wanes rapidly. Unless the roles he plays and the productions in which he plays them immediately after his setback are successful, the star will find that he has become a has-been.

Intelligent theatrical personalities--those who have remained on top year after year--are acutely aware of these perils. They examine all offers with extreme care, turning down roles they do not feel suit them, refusing to appear in productions that are below standard. When a theatrical big name does accept a role, he spares no effort to give the best performance he can.

Naturally, every performance and every production cannot be an Academy Award winner or draw critical raves. There will be some of each that will be mediocre or even bad. But the top names are those whose average of hits is highest and who consistently do their utmost to do their best. It seems to me that to these extents the successful actor and the successful businessman have much in common.

The businessman who can build an entire career on a single success is a rare bird, indeed, if he exists at all. The businessman whose career can survive an unbroken series of failures after even the most remarkable of initial successes is rarer still.

To carry the analogy one or two steps further: The successful actor meticulously examines scripts offered to him. He learns all he can about the producer, director, the other actors proposed for various roles and the technical personnel with whom he will be working if he accepts the part offered to him. If he does accept, he rehearses endlessly--and then gives the finest performance he possibly can.

A businessman reaches the top and stays there in much the same manner. He realizes that business successes are seldom coups, but, rather, the results of painstaking planning and hard work. The successful businessman examines any given business situation with at least as much attention and care as the successful actor examines his scripts. Usually, the businessman will be even more painstaking, for he must concern himself with such added dimensions as costs and competition, production rates and profits and other such matters not normally within the actor's province.

The businessman also concerns himself with people--the personnel with whom he has to work as well as those with whom he is dealing or intends to deal. Then he plans carefully, going over his plans again and again, searching for flaws, seeking ways to improve or better them--and this is the businessman's version of the actor's rehearsals. When, at last, the plans are ready and it is time for him to act--in the broad sense of the word, of course--the businessman, like the actor, gives the finest performance he possibly can.

No matter how well things turn out, the seasoned businessman knows that he cannot stand indefinitely taking bows and acknowledging the applause. If he wants to stay in business, he must do something for an encore--and the sooner the better.

When the late, great John Barrymore achieved his first huge successes as a star of the legitimate theater, he was once asked what he thought about while taking his opening-night curtain calls.

"I think about two things," Barrymore is said to have replied. "First of all, I think about improving my next performance so that I'll get more curtain calls. Then I think about what part I'd like to play after the show finally closes."

It may be true that there's no business like show business, but everyday businessmen could do far worse than to use a paraphrased version of John Barrymore's answer as their guide. Once a business success has been achieved, the astute businessman gives thought to amplifying his achievement--and he is immediately alert to opportunities that may grow out of it, or to new opportunities that may present themselves.

Sooner or later, every businessman has his big opportunities to achieve big successes. He must be able to recognize them when they present themselves, and he must also possess imagination, ability and willingness to work hard--the elements needed to make the most of his opportunities. These are not necessarily innate traits or abilities. In most instances, businessmen acquire and develop them as they go along.

But once he's recognized his opportunity and set his sights on a goal, the businessman must lay his plans with great care. He must hand-pick the aides and associates in whom he reposes the greatest confidence--individuals he can inspire to devote their utmost energies to the tasks he has set for them, just as he must exert his own energies to the utmost.

If he does these things, he will greatly enhance his chances of achieving a milestone success. After a while, it will become almost a habit, and a series of milestones will mark the path of a long and truly successful business career.