Sanguine has been in business for 41 years since your father established it in 1977. What are the critical elements of sustaining a family business?
Family businesses have limited capital and can be resistant to change, but their tightly held ownership gives them an efficient structure without the elaborate and costly controls that are required in larger organizations with multiple investors. In turn, the small, informal, and entrepreneurial nature of family enterprises attracts high-quality employees who are loyal to the organization. One of the greatest challenges to sustain family enterprises is the transition between generations. I have been fortunate to have tremendous mentors within my family, including my grandfather Herman Kaiser, my mother, Ruth Nelson, my father, Don Nelson, and my Uncle George Kaiser. They inspired me from youth to acquire a great education, work hard, have an interest in business, and be an empathetic leader.
What is it like living in NYC while running an oil and gas company in Oklahoma?
I started my formal business career at Citibank in New York where I met my wife, Rona, who was also a transplant (from Atlanta). We were attracted to the fast-paced environment of Manhattan and decided to raise our family there. I still have a strong attachment to Tulsa and recognize that it is an integral part of Sanguine’s success. The city’s entrepreneurial spirit and strong family values provide a workforce perfect for a family oil and gas company. Having a Tulsa-based company gives me the great fortune of continuing to spend time in Oklahoma on my regular business trips. Managing Sanguine from a distance only works because of the exceptional leadership Sanguine has locally.
What have been some of the biggest changes and challenges you have experienced in the oil and gas industry since you became president in 2003?
The greatest challenge has been the shale revolution, which has favored companies with scale. Before shale, a small company could thrive by focusing on a limited number of high-quality, low-budget drilling opportunities within a narrow geographic area. In contrast, each shale project requires a large amount of capital to test initially and an even greater amount of capital and institutional resources to develop fully. Scale advantages have only intensified over the last few years with the application of longer wellbores, pad drilling and the continuous iteration of new techniques. With these changes in the industry, Sanguine faced the choice of growing to attain necessary scale, and in doing so, abandoning its family business culture, or evolving its strategy to take advantage of the vacuum left by the industry’s rush to shale. We decided on the latter. We have recently grown our reserves through the acquisition of mature vertical production, which had been neglected by companies focused on shale.
You are very passionate about education. Can you elaborate on its importance?
Inspired by the work of my mother, I consider volunteerism as the other “family business.” As she has been a lifetime fundraiser at her alma mater, Bryn Mawr College, I have done likewise at mine, Yale. America’s colleges and universities train the next generation of leaders and are the centers of knowledge and innovation. They are the best in the world because of the bounty of philanthropic support they have received. In addition to my work at Yale, I am also board co-chair of an educational organization that promotes and leads after-school programs in NYC public schools. As our economy becomes more technological, our primary and secondary educational institutions need to keep pace by providing our future workforce with the skills necessary to participate. In the last industrial revolution, the U.S. was the pioneer in developing publicly funded, universal, secondary education as we shifted from an agrarian to a manufacturing economy.
Your brother is Tim Blake Nelson; is he as funny in everyday life as he is on the big screen?
Tulsans who grew up with Tim know that he has been performing and entertaining all of his life. What most people don’t know is that Tim is also a serious intellectual. Tim, as well as my sister, Pam, brother Mike, and I were encouraged by our parents and grandparents to continuously expand our education by reading and learning, especially in adulthood. What makes Tim’s everyday wit so humorous is the substance behind it.