Episode 137: Claiborne Deming
In this episode of Be EPIC, Matt is joined by Claiborne Deming, former CEO and current chairman of the board at Murphy Oil Corporation and inductee to the Arkansas Business Hall of Fame. Read more...
More About This Episode
In this episode of Be EPIC, Matt is joined by Claiborne Deming, former CEO and current chairman of the board at Murphy Oil Corporation and inductee to the Arkansas Business Hall of Fame. Matt and Claiborne discuss how Claiborne’s leadership as CEO through Hurricane Katrina shaped his perspective of the responsibilities in business and leadership. Listen as Claiborne explains how seizing opportunities and working hard allowed him to have a successful career.
0:00:08.3 Matt Waller: Hi, I'm Matt Waller, Dean of the Sam M. Walton College of Business. Welcome to Be Epic, the podcast where we explore excellence, professionalism, innovation, and collegiality, and what those values mean in business, education, and your life today.
0:00:28.7 Matt Waller: I have with me today Claiborne Deming, who, after starting as an attorney, later became Executive Vice President and Chief Operating Officer of Murphy Oil, before becoming President and Chief Executive Officer in 1994. And he later retired and became Chairman of the Board and Executive Committee of Murphy Oil Corporation in 2008. Well, along the way, I know you spun off Deltic Timber and you also eventually spun off Murphy USA while you were Chairman of the Board, and so I'd like to talk to you about some of those things. But first of all, thank you for joining me today. Appreciate it.
0:01:14.6 Claiborne Deming: Oh, delighted, Matt. Always glad to help.
0:01:17.2 Matt Waller: And Claiborne, also, I should note to the audience, Claiborne was inducted into the Arkansas Business Hall of Fame in 2019, and there's a nice video on our website about his background that I would encourage you to watch. If you just Google Arkansas Business Hall of Fame, Claiborne Deming, it'll take you to the page and you can watch that. So Claiborne, I would like to... Since people can get access to your background pretty easily through that video, I'd like to talk a little bit about some of your experiences, especially from a leadership perspective. You led the company through some challenging times in the world, natural disasters and all kinds of wars and all kinds of problems, and you were a global company, so I'd like to talk a little bit about that. But first of all, you were with the company most of your career, but when you became President and CEO, you had a lot of global responsibility. Were you CEO during the time of Katrina?
0:02:26.7 Claiborne Deming: I was, Matt. Yeah, and it was one of the more challenging of the events that we faced at the company, and it may have been the most challenging, quite frankly.
0:02:35.9 Matt Waller: Of course, I remember Katrina. It was terrible, but you all had lots of assets and people.
0:02:41.2 Claiborne Deming: It was a complicated time. The good news is that I had been at the company at that point, as CEO for about 10 years, 8 years, and so I had a really good feel for how to manage at that point. I had the team around me who I had a lot of confidence in, a lot of trust in and we knew each other so well, we could complete each other's sentences. And so, when the storm came through on a Monday morning, we were all prepared, we ran our exploration and production business out of New Orleans in an office building down there. Of course, we were the fourth or fifth largest producer in the Gulf of Mexico. And so what happened is, of course, we back weighted all of our platforms, we shut down our production, and the storm came through. We also had a refinery in Monroe, Louisiana, which is in the greater New Orleans area. And so, the offshore production was severely impacted, but actually offshore platforms can withstand hurricanes pretty easily, quite frankly. They're designed for it. And so, in three weeks, they were back online.
0:03:45.3 Claiborne Deming: The office building in New Orleans became problematic because we ended up having 83 people marooned in that building for a week. And we didn't know it because all the communications were shut down and, of course, internet, phone lines, the whole... Everything. And so, people historically had come to our building to shelter from a hurricane, because we had generators and we had always been able to easily ride the storm out there. Of course, Katrina was different. New Orleans became flooded and became lawless, and so, on the Tuesday after the Monday, I'd gone down to New Orleans, I'd flown back, I walked into my office on Wednesday morning, and I'd seen our refinery, I knew it was a mess. We were gonna be in a six months shutdown there. And the general counsel and the number two guy at the company said, "Hey, Claiborne, you're not gonna believe this. We have 83 people trapped in our building, and they're running out of water and they're running out of food. We gotta figure out something to do with them." And so, we set up a war room and we thought about... We have insurance, so if Claiborne ever got abducted in Angola, the insurance company calls whoever the black ops team is to come rescue me, and so we said, "Let's call those people and see if they can rescue our people." They were all booked. They had already been taken by other companies.
0:05:02.9 Claiborne Deming: And so, I ended up calling a guy name Ashley Mason, who was a kid from El Dorado. I knew his father, Richard Mason, actually was a special ops guy in the Army. And he had mustered out and started a business in north Little Rock to train Special Forces people how to snatch and grab people. So I called him and I said, "Ashley, I need your help. I need you to go rescue 83 people in New Orleans. You need to do it by Friday," because I know that we had a pregnant lady, we had a guy with diabetes, if he didn't get his medicine, he was gonna pass away by Friday. So he got four people who worked for him, five off-duty Pulaski county sheriffs, deputies, and to make a long story short, he effected the rescue that Friday morning and rescued 83 people.
0:05:47.9 Matt Waller: How did he do it?
0:05:49.6 Claiborne Deming: Oh my gosh. We gave him 25K in cash. He flew to Lafayette with the 10 people. He got on a bus Friday morning, left Lafayette at two in the morning, got to Gonzales where the roadblocks were up on I-20. We had already told them we were going in to rescue people, they let us in. He went on the west bank where you could actually then go over the Greater New Orleans Bridge and go on I-10, and our officers were right next to I-10, the elevated part of I-10 on Canal Street. And so, he got there initially with two Suburbans and these... We were listening, but by that time, cell phone service had been restored. We could listen to this, and they... We had a guy here in our office who had to take them there. Who volunteered to drive them there. They spilled out of these two Suburbans with the black stuff over your head, balaclava, black clothes...
0:06:43.3 Claiborne Deming: AK-47s, and I mean, people were living on I-10 to get out of the flooded water, and they spilled out of the way. He went down the ramp, you've got the money, boats were going up and down Tulane Avenue and Canal Street, he started giving people two and three thousand dollars to get boats, got a flotilla of boats. Put them in there, we went to our office building, we rescued the people, and we then brought a bus in, the same route we had brought the two SUVs in, and we got all 83 people out. It was the damnedest thing you'd ever seen in your... It was all on the fly with people from El Dorado and Pulaski County who effected that rescue, and then the nutty thing is that night, it was a Friday night, I went home.
0:07:30.6 Claiborne Deming: And we were supposed to go to Richard Mason's house for dinner, Ashley's father, they didn't know anything about it. And I said, "Elaine, I'm wiped out. There's no way I could go," so I just went to bed, and the next morning I get a call at 7:00 AM And it was the guy who runs our refinery operations, he says, "Claiborne, we got a problem. We got a really serious problem." I said, "Mike, we don't have a problem. We just rescued 83 people, we saved lives. Nothing matters compared... Nothing is as important is that." He says, "Well, this is pretty close." [chuckle] He said, "You know, our refinery is flooded. Yes, well, we just had a big oil spill and we're spilling oil all over the adjacent neighborhood, and it's probably gonna be one of the largest onshore oil spills that the US has ever had, but we floated a tank in our tank farm and it ripped away from some piping, and oil just came out the bottom and on the top of the flood waters and dumped on this adjacent neighborhood." So I said, "Yeah, we got a problem." So I called the team together, I said, "We're getting back together." And we started meeting that Saturday morning. We had to put out a press release that day, Saturday, and we had mobilized by that Monday, so it took us... In a month, we knew exactly the playbook and it worked out, we fully compensated people and cleaned up the neighborhood and got our refinery back, back online.
0:08:58.0 Matt Waller: Oh my goodness.
0:09:00.9 Claiborne Deming: It was an extraordinary eight or nine days, but if that had happened after a year or two of me being CEO, we would not have reacted nearly as effectively, I just knew how to take charge and take advice, defer to people, make decisions on the fly, if they're wrong correct them, but make a decision. Don't delay.
0:09:21.6 Matt Waller: What a great way to open the podcast with that story. I asked you about it and I didn't, you've never told me that story, so I didn't know. That is a great story. So one thing that comes to mind is your network, you knew this guy to call.
0:09:39.5 Claiborne Deming: Well, you know what, it was like this, we were out of options, and we literally had lives on the line and to make it more complicated, everyone in the building in El Dorado knew this and our board knew it, and no one could go rescue them. And we had all these farfetched plans, we were gonna run a boat, charter a boat in Baton Rouge with people and go downriver to go to Canal Street, and get other boats and go up to our building to get them. We had to, we were sitting there brainstorming and brainstorming and brainstorming, and a guy named Steve Cosse, who was general counsel and just fabulous, and I was talking to him. I said, "Steve, you know, the only person I know is Ashley Mason. I mean he was in the Army and he actually has a thing in North Little Rock, and he trains people for the government to go do operations like this," and Steve says, "Call him." And within five minutes I called him.
0:10:37.6 Claiborne Deming: Within five minutes of coming up with the idea, we called him, and we got him and he said, "I gotta think about this for minute." So, he called me back in an hour and said, "I'll do it but there is one condition," and this is hilarious actually, I said, "What is your condition?" and he said, "We just can't have any liability if something goes awry, we can't be financially responsible." And I put down the phone, I said, "Steve, did you hear that?" He says, "Yeah," he says, "Absolutely accept it," so we wrote him a one-sentence thing, anything that happens, you're exonerated from liability, Murphy Oil Corporation assumes full liability on top of that. One sentence, faxed it to him, bam. So we were making decisions that quickly, and then he had to go find people, and we did this all on Wednesday, and then Thursday, we had tweaked it a little bit and then he took off Thursday afternoon. Went to the bank in El Dorado, got 25,000 bucks out of the bank in cash.
0:11:34.0 Matt Waller: So, he's going down in his boat in the water, finding other boats and saying, "Hey, I'll pay you so much to come with me."
0:11:42.8 Claiborne Deming: Yes, you were listening to this, he parked these two additional Suburbans, you have these on-ramps. We get on I-10 off of Tulane Avenue there, and he backed the Suburbans down the on-ramps, to get them away from the people, because it was such a... 10 heavily armed commandos. They were scaring people, and so he just walked down there to the water, and this was being narrated by the guy who works for us who drove him there, and it went like, "Claiborne, Ashley is flagging down a boat, oh my God, he's giving him a 1000 bucks to get a boat." Like I said, "Bobby, that's fine, don't worry about that." He said, "Oh my God, he just bought a boat for five grand," I said, "Bob, great, no problem." He spent about 15k in 10 minutes and got four or five boats where we floated them over to our office building and took people out back to that on-ramp.
0:12:37.9 Matt Waller: I'd bet those employees were quite grateful for the extension.
0:12:41.3 Claiborne Deming: Oh yeah, no, it was about one of the most rewarding things you'll ever do, because we definitely saved the guy's life. He was diabetic, definitely. He was in a diabetic coma when we got him, and we had a medic there, and we gave him insulin the second we got him. And then we had three ladies over 80 years old.
0:13:00.6 Matt Waller: So, Claiborne, you have mentioned to me before that your direct reports, your team, was quite remarkable, and you actually one other time, you mentioned to me that they could complete your sentences. I know developing a team like that is not easy. Was your team in place during that disaster?
0:13:22.2 Claiborne Deming: Yeah, they were, but we assembled it over time. When I first got my job, I was 40, Matt. And, you think you're ready for something like that, but I really wasn't. And I really didn't know exactly what to look like for someone to work for me at a really high level, who I could rely upon. And interestingly enough, the first person who worked for me, who I knew had that caliber was a guy who ran our Canadian company at an operating level, his name was Harvey Dore, and he ran our Canadian company. I had been working there for about two years and I wasn't doing very well. And so suddenly, I told myself, "You know something, Claiborne? I want everyone to be as good as Harvey. And if not as good as Harvey, I'm gonna get rid of them, get someone who is." So, I just started culling people, replacing people. Our culture as a company... I worked for a really, really tough man who had been my mentor and my boss. He was a remarkable human being, I could tell you stories. Actually, I can't tell you stories 'cause he was just a remarkable human being, but tough, tough, tough. And, he really was old-school tough. So, I thought that's what a CEO was supposed to do. When I got my job, I adhered to those traits, and so I was pretty tough on people. Public humiliation, yelling at people, "Come on, you're letting me down, you're letting the company down. You're letting da, da, da... "
0:14:39.8 Claiborne Deming: And then, we weren't going anywhere. I just almost, one morning brushing my teeth said, "I'm just gonna be the way I am, I'm just gonna be who I am." And, I'm a nice guy, I have very high standards. But I like people and I'm gonna express that gratitude, and thanks, and appreciation. And not be this hard-nosed guy. So, literally that day, I went to the office and my whole demeanor changed. And I was much more supportive. If someone made a mistake, I said, "That's fine, that's on me. Let's pick it up and do it again." That change literally helped set the culture and changed our company. We became more collaborative, we became closer friends, we relied upon each other more, we knew that we could take care of each other. And then, me deciding that I wanted someone just like Harvey at that level... And then I knew I could fire people, you didn't know how to fire people initially. I had to learn how to do that. And all that, I had to learn on the fly running the company. And so, after about three or four years, I had all that done. And then, we started putting it in action and that team ended up being remarkable.
0:15:46.1 Matt Waller: That point about you became yourself, it seems to be so important. You hear that more and more, there's a whole area of literature around what they call authentic leadership. Because it's hard to actually perform well when you're trying to be someone else.
0:16:05.4 Claiborne Deming: And you know, business is common sense. It's just common hard work, taking advantage of opportunities, relying on people. It's not a sophisticated MBA, it's not running a spreadsheet. It's seeing opportunities, it's saying, "Let's go, gentlemen. Let's get it, now." Then, when you're wrong, you know, "I'm wrong." I read something when I was a kid, I read a biography of Bear Bryant. And he had a great thing to his team. He said after a loss, he said, "That's on me, that was my mistake." And then, when they won he said... He always told the press, "They did it." And so, if you have that mentality, you incent people so heavily, so intensely. Because it was me, that's just kind of how I'm built and so people see that so quickly and it works.
0:16:58.6 Matt Waller: So Claiborne, you rose through the ranks quickly. You had huge responsibility quickly and you've managed it for many years. A lot of the students who listen to this podcast tend to be the ones that are probably a little more ambitious. What advice do you have for them?
0:17:19.0 Claiborne Deming: First of all, you gotta work really hard. You literally have to be there at 7:00 and you have to be willing to stay 'til 6:00. Forget eight hours. Whenever there's a job out there, volunteer for it. Whenever they say, "Hey, I need someone to... " say, "I'll do it." When I was a lawyer for the first two years of the company, and we were great, it was a great time. Oil at that time was $40 a barrel. It was back in '79, '80, '81 and we were all over the world. We had about five people on our legal staff and my God, you could write contracts, you could negotiate a joint venture agreement. You could write a proxy statement, you could even litigate if you wanted to, for Christ's sake, which I screwed up and did one time. But, I always said, "I'll do it." Our general counsel would say, "Hey, I need someone to do... " I said, "I'll do it." That attitude, people notice and pick up on right away. Within six months after I got to the company, when there was a legal problem, we were like a law firm that the resources of the... There was the resource of the company and the different departments of the company would call on us.
0:18:26.2 Claiborne Deming: And everybody in the company said, "Hey, I want Claiborne." [chuckle] You just get a reputation, you're willing to do anything, you're willing to work as long as it takes. When you screw up, you admit it. When you're successful, be humble, for Christ's sake. Everyone knows you were successful, don't brag about it. That's dumb, and companies don't like people like that. People like humble people who give other people credit. So, if you have that attitude and be willing to learn... You have to do a lot of... I was a lawyer and I knew some accounting, but I quickly said, "Oh my God, I gotta learn accounting." So, I just went to night school in El Dorado for two years and I learned accounting. The language of business is a balance sheet and an income statement, and you gotta learn that. The company wasn't gonna teach me about it on their time. Believe me, they had me doing legal stuff. So, just stuff like that.
0:19:21.5 Matt Waller: Yeah, that's great advice, Claiborne. This idea of being willing to jump in and take on challenges, projects, jobs, so to speak. People really notice. Every business I've been in, you see those people, they stand out.
0:19:39.0 Claiborne Deming: Yeah, you just volunteer, do more. Then you learn so much more, you're exposed to more and it really is a virtual feedback for your career. One thing about business, after about 15 years, I had a guy who worked for me named Herb Fox, who's now deceased. And, he was about the smartest... He ran our downstream business. He was just a terrific guy. Herb told me something once that I later realized was so true. After you've been working in business long enough, if someone brings you a problem, within two minutes or three minutes, you actually know the answer, because you've been around it now long enough and you've been there, you've done it. That initial instinct is right about 80% of the time, but your instincts become so powerful that you don't need a spreadsheet. You just say, "Oh God, that's gonna work. That's a terrific idea, the market's gonna love it. Let's go do it." Now, let's back that up a little bit [chuckle] by doing a little math behind it, "Give me some cost analysis. How big is the market?" Etcetera. But, your instincts are much more powerful.
0:20:48.1 Matt Waller: Thanks for listening to today's episode of The Be Epic podcast from the Walton College. You can find us on Google, SoundCloud, iTunes, or look for us wherever you find your podcasts. Be sure to subscribe and rate us, you can find current and past episodes by searching Be Epic podcast, one word, that's B-E E-P-I-C podcast. And now, be epic.