CEOInterviews.AIThe Engine Room, Clay Williams

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David Reed0:12

I'm David Reed and this is the Engine Room. Hello and welcome to another Engine Room. We have an okay guest today. Clay Williams, welcome to the show. I'm hoping somebody else is going to join us.

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Clay Williams0:26

Yeah, no, good. It's really good. I think a lot of people would like to know you a bit better. Certainly in NOV, we're going to put this outside, so you know, be careful.

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David Reed0:38

Rut row. Yeah, no, but I think that's something these shows, you know, we're always bringing people just to learn a bit about them. By the way, I always enjoy them.

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Clay Williams0:44

You do? I really do. And you write notes to people, which I appreciate, because we have such great employees and the way that you get them to be introduced to the rest of our organization, including me, I really appreciate it. So thank you for doing that. So everyone needs to know that you did not want to do this. No, this is not your... I want to tell your viewers I'm here under duress. You literally... I'm hoping it ends soon. I'm the most boring guy you're ever going to interview.

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David Reed1:15

I don't think so. So, but I love that when I said you're doing it, you said... I said no, no, that's not what you said. No, what you said was, 'I'm your boss.' Well, yeah. And then I said, 'No, you don't get to tell me what to do.' You're pretty persistent, by the way.

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Clay Williams1:34

I'm pretty persistent. Pretty good sales guy.

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David Reed1:36

I think it's important. I think it's good for us to do. So let's start. Your life. Born in Scotland or Russia? Where were you born?

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Clay Williams1:42

Katy, Texas.

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David Reed1:44

Oh, Katy, Texas. Now, you and I know Katy, Texas, but this is international. So what is Katy?

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Clay Williams1:50

Katy is just west of Houston, a suburb of Houston. When I was born, it was actually a very small town. That's something most people who come... for example, Norwegians moved to Katy for some reason. It's their place.

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David Reed2:03

True. Very certain people move certain places. So a lot of Norwegians. So you say, is that Little Norway?

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Clay Williams2:09

No, it was actually a small rural town. I guess it was a rice farming community. Funny to me that it's rice. There used to be a lot of rice. Probably less than 2,000 people when I was born. My grandfather was in the oil patch in another town near Houston called... which is where my father grew up in what's called an 'umble camp.

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David Reed2:37

I need to explain something to one for a minute. So hold back. 'Umble' is the word 'humble' for people here. Am I wrong? You're pronouncing it wrong. There is an H there, but they don't say it. So we're in on right now. No, it's just the word 'humble.' And if you feel humble, which I will say, Clay, you're very humble, and that's why you don't like being on these shows. But I have to say, you're very 'umble.' Okay, but anyway, yes, tell me about your grandfather.

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Clay Williams3:09

So 'Umble Oil' or, for people in Scotland, 'Humble Oil' was a predecessor to Exxon. My grandfather actually went to work for them in about 1920. My father grew up in a Humble Oil camp and a lot of little towns around East Texas in particular have what's called a Humble camp. But my father didn't work in the oil field. He actually roughnecked his way through dental school. He was a dentist.

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David Reed3:48

Those two things don't go together. Dental school? This is a big cultural moment for people who don't know. That whole idea. So you've said a few things. Let's unpack a little bit. There are oilfield towns that are built around... it was oil first, and you built around it. So you go back to what were typically farming communities, lumber communities in East Texas, South Texas, and the industry would discover oil in these little towns back in the teens, 20s, 30s of the 20th century. They would literally have to move in a big workforce and build a separate little camp or town. So a lot of Katy had one in old West Katy.

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Clay Williams4:44

It was a little bit outside of the town. Katy had a big gas field discovery, so they built an encampment, a little neighborhood for the workers. My father grew up in one of those. 'Tumble' would also be considered now inside of Houston. Houston's kind of swallowed it up. It used to be a very small town. I think he had six kids in his high school graduating class. There are people who still remember the small classes in Tomball. They still have... because I lived near there, and they would talk about taking the horse into town. So not that long ago. They kind of held out as a small town. Both those communities have in some ways been swallowed up by Houston, which grew a lot. But back to my story, my father became a dentist. He was the first and only dentist in Katy, Texas, for a long, long time.

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David Reed5:47

So historically, in old Katy, everyone knew your dad.

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Clay Williams5:47

Oh, yeah. They'd all come see... at least those with good dental hygiene.

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David Reed5:53

Maybe the whole teeth thing. It's more of a torture method in our country. But yeah, no.

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Clay Williams5:58

It was a small town, a lot of farmers. Then, starting in the 1970s, it started growing like crazy and is now a big, big suburb. We have a lot of employees that live there now.

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David Reed6:16

It would have been a drive out of town. I think we had Edwin here before, and he was an inside-the-loop kind of real Houston. Everything outside of 610 was considered far. I remember there were cows inside Loop 610. I told that to somebody, and they said, 'You know what breed those cows are?' I said, 'I didn't notice.' He said, 'Those are tax cows.' Whoever had them was grazing them out there to get a tax break. I've learned that a couple of chickens can get you a good tax break. So that's interesting. So your dad's a dentist. Mother probably stay-at-home mom?

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Clay Williams6:57

No, she actually worked. She did real estate in the Katy area.

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David Reed7:04

So your family is core to the neighborhood. Very active.

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Clay Williams7:06

I'm very proud of my parents. They both passed away several years ago. That's hard. Parents going is hard. We've both gone through it. But that history is really something in a town that's kind of moved out and filled out and is just a massive place now. Most of them don't have that connection to the history, but you do. You're not still there, are you?

No. My wife and I moved out that direction when our kids were small. We raised our children out there in a little more rural setting south of Katy, between Katy and Richmond. More farm-like land. It's also since been developed. There are a lot of people surrounded by houses now.

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David Reed8:03

I did that in Spring. I bought wanting to be in the countryside, and very quickly Houston turned up. Houston just continues to grow. It's amazing. I was looking for... my kids went to a country school, and everyone in the school, their last names were the streets because they were the farms. We were the only ones that didn't have a last name that wasn't German and wasn't a farming name. That was different for me. It was interesting. But I assume that was your world. Very small, everyone knows everyone.

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Clay Williams8:32

Absolutely. What were you like as a kid? What did you like to do?

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David Reed8:41

All kinds of stuff. From a little bit of sports to hobbies. Are you a maker of things?

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Clay Williams8:48

I think I've sort of evolved into that. I like working with my hands. I've got a wood shop here in Houston that I dabble in every now and then.

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David Reed9:00

Making whatever my wife needs. 'Can you fix this chair?' I recently got a router and started making some signs, like the ones you see at state parks. I've done a few of those.

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Clay Williams9:18

I might have some work for you if you're okay. Just let me know. Now that I know.

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David Reed9:23

As long as it's not another podcast. We just need a podcast signage that says... or something that says 'Williams Wood Shop.' That would be good.

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Clay Williams9:36

I'm not sure it has a name or not, but I really enjoy it.

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David Reed9:42

I'll do a logo for you. That's great. So you were doing that as an adult, less as a kid. So growing up, you're playing sports. What sports?

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Clay Williams9:53

A little bit of baseball, football. I was never very good, but it was something to do. We won't judge you. It wasn't your profession. Probably good.

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David Reed10:06

That was never a possibility. It's a small town, you get to play more. But always had a job starting from about 15 onward.

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Clay Williams10:18

What was your first job?

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David Reed10:18

Frying chicken. I love it. I still actually fry chicken pretty well. You've got to get the grease hot. That's a key thing. So frying chicken, I worked in the hardware store, worked for a couple of electricians, worked for a construction company, worked at the cement terminal right where Interstate 10 sort of doglegs. Is that still there?

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Clay Williams10:48

Oh, yeah. I think I've seen that. A bunch of different things. In your high school years, junior years, what were you leaning toward? What did you like at school?

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David Reed11:01

I knew pretty early on that I was going to be an engineer. I was kind of a math guy. I went away to college and actually started in chemical engineering. It took me two... what makes you think chemical?

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Clay Williams11:18

I'm not really sure. I kind of liked chemistry. Chemistry class got you going. But it took two semesters, and I realized I wasn't smart enough to be a chemical engineer. This isn't really working out.

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David Reed11:30

Where did you go for college?

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Clay Williams11:35

Princeton. That's a small place somewhere. It's up on the East Coast. Long way from Katy, Texas.

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David Reed11:42

What is it near?

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Clay Williams11:42

It's between New York and Philadelphia, in New Jersey. I'm always assuming people don't know stuff, so I'm trying to get the information out so people go, 'Oh, okay,' and they can place it. It's a pretty good school. Princeton. Pretty good. It's up there on the list. I really enjoyed it. I've still got to this day really good close friends from Princeton.

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David Reed12:06

The college... this is a college/university connection in the states that is very different from other countries. You carry it with you. It's kind of an interesting into sports, into life. It's a big deal. We all have a natural affinity and affiliation with where we went to college. Very different. In Britain, if you went to Cambridge or Oxford, they'll talk about it, but outside that, no one cares. So you stay connected to that community?

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Clay Williams12:38

I do. I've got some really good friends that are college classmates. In fact, I'm going on a trip tomorrow with a couple of them, which I'm looking forward to.

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David Reed12:50

What kind of trip?

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Clay Williams12:50

We're going up to Colorado. We may or may not ski. We will definitely drink a little wine. It'll be by a fire, hopefully. It's a nice place to go.

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David Reed13:04

That's good that you're still connected and spending time with people like that. So you're doing chemical engineering, not very well, and you took a geology class. What made you change your mind? You're in the middle of chemistry, and you're like...?

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Clay Williams13:21

I was kind of figuring it wasn't my cup of tea. Learned a lot. By the way, Jose is a chemical engineer successfully, which means he's a lot smarter than me.

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David Reed13:34

You don't chat chemistry?

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Clay Williams13:37

No, it's never come up. Let me talk about rocks. Geology 101, which is 'Rocks for Jocks,' changed my life. I really enjoyed it and thought this was my calling. Princeton had a department and a degree in geological engineering, which they'd already sort of launched into an engineering track. So I just pivoted over that way and moved to the geology department.

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David Reed14:07

Was that a growing trend, geology? My mother was born in geology. Usually, you're either a geologist or an engineer in our industry. It's one or the other.

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Clay Williams14:20

Yeah, there are a couple of college programs around the US that offer that: South School of Mines, University of Missouri at Rolla, Colorado School of Mines. Shell oil companies... it's a degree Shell really liked. They were targeting you, I assume.

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David Reed14:51

That's where I went to work out of college. But I'm not sure Shell is aware what it really means. I'm not really a very good geologist, and I'm not really a very good engineer, but I can sort of fake either.

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Clay Williams15:04

Good faker. So Shell picks you up. First job. Where did you go?

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David Reed15:11

Started in what Shell called 'Sweepy Alaska.' Shell Western E&P, working in Alaska. It was... the week after I started, I think I was up there. Learned a lot. Went straight out to a drilling rig in the Cook Inlet, a platform rig that Shell was doing redevelopment on. Spent four years working in Alaska, three and a half, then I got moved to New Orleans. It was a test, I guess. 'Do you love this?' Going to the field is one of those things. Either you think this is awesome, and the answer is yes. I love it. Once you get in the field, you just love it. It's amazing. You learn so much. I ended up spending a lot of time on drilling rigs. People are teachers. Everybody wants to tell you how this is. Not everyone, but most of this industry, they're pretty open. I really like that. I was surprised that people want to teach you. They assigned me, the first week or two I spent out there on this platform rig, I was a sample catcher for the mud loggers. Exlog was a company doing the mud logging out there. Just being around the operation, seeing what's going on, is invaluable. From there, the time I spent at Shell, a lot of that was sitting on drilling rigs, looking at rocks that came out, running wireline logs, cutting cores. That sort of thing.

That's fantastic. So you said four years in Alaska and then another three with Shell in the Gulf of America now, I guess. You heard it here first. Working on a Conoco platform and East Bay and a couple other fields. Great experience.

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Clay Williams17:11

Really good. Shell's a marvelous company technically. Learned a lot.

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David Reed17:16

I remember in school in Aberdeen, they targeted kids from high school on, trying to find you and engage you. They were really looking for talent. Unfortunately, sometimes they get you and they're like, 'Oh no, a faker.'

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Clay Williams17:36

We always saw that. I have friends who are now retired because they did that Shell track and it was a lifetime career thing. But you didn't stay. Tell us about that.

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David Reed17:49

This was in the '80s, a difficult time, a big downturn in the industry. At some point, I said, 'I'm not sure if this is what I want to do for the rest of my career or not.' So I decided to go back to business school and get an MBA.

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Clay Williams18:02

You went full-time?

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David Reed18:08

Full-time. I didn't do the night thing. I said I'm going to immerse myself in this. What drove that? I knew it would force me to make a career change if I was going to do it. My plan going in was to find something easy. Computers, plastics. This is way too tough a business. Oil business is just too hard, going through a trough. 'Why, man, this is hard. Let's go find the easy businesses.' Everyone talks about exactly that. It sounds great everywhere else. What I learned is, guess what? They're all hard. I got into business school and learned that all businesses are difficult and challenging and go through cycles. You might as well stick with what you know. So coming out of business school, I said, 'I love this industry. I love the people.' The people are the incredible part. Coming out of Katy, you've got that kind of farm-like, straight-talking, good people. When you get to the industry, you're like, 'This industry is filled with my people.' They're straight-talking, no messing around, straight ahead, very serious, very smart people who work hard, understand the mission, get it done. Problem solvers. A lot of practicality.

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Clay Williams19:34

So that's interesting. You studied, you're like, 'Okay, I get it. It's all up and down.' Let me go back to something I already understand about how the business works. You've got great stuff under your belt already just from being in the field. So I'm glad I did. What was the job you came out to?

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David Reed19:57

I went to work for an investment firm, a private equity firm that would make investments in oilfield service companies. It's a firm called SCF Partners. In the oil and gas world, exactly. A small firm. Good people again, very smart. A great experience. It was founded by a fellow named Eli Simmons, who is one of my good... quiet man, one of my mentors and friends. In fact, I had breakfast yesterday with Eli, catching up.

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Clay Williams20:31

I've bumped into him a few times, and he talks about you. In the Chupis scope Varco era, he asked me some question. He wanted to know something that I knew. Then one time on a stage at Harvard, we were both speaking, and I loved it. I got invited when Thomas Major was up there. He's like, 'Come up and speak.' I enjoyed that. He's a very smart man, but quiet, very smart, quiet, and humble. Very, very humble.

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David Reed21:03

He's very humble. You do the... I'll just do the no H. Okay, we're like switched. But anyway, Eli was... I joined his firm, worked making investments for a private equity firm. After two years of that, I realized this really isn't my cup of tea either. So I joined one of the companies that they had invested in.

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Clay Williams21:29

It was a company called Drexel. Did they pull you in, or did you choose to go there?

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David Reed21:35

It was mutual agreement. I said I much prefer... I would get sucked into some of their companies in their portfolio. One in particular I spent several months at, and I realized I kind of enjoyed working in an operating company more than working in private equity. It's more hands-on. So an opportunity came up to join one of their portfolio companies full-time, and that was Drexel Oilfield Services. Nobody knows that anymore. It's gone, but the products are still here. Brand's solids control, because I remember the logo. It was a great company based out of Singapore. Brand's solids control equipment and Hydra Rig coil tubing units were the two businesses we had. Now, as you know, Hydra Rig is part of Intervention and Stimulation Equipment business unit, and Brand's is part of Wellsite Services. The progression was joining Drexel Oilfield Services, we merged with Tuboscope, which at the time was a standalone public company. We did a reverse merger. SCF Partners made a bigger equity investment in the combined enterprise. Eli became our chairman and was on our board for several years. Pleasurable, I would think, working with them. Then, as you know, in 2000, I think we cut the deal in '99 to merge with Varco, and in 2000 it closed.

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Clay Williams23:23

You were at Varco. That's right. I was technically in Schaer at the time, and I think I just moved before, because I was switching into rig package for everything. Tuboscope bought Varco but took the name Varco. That's a lot of confusion.

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David Reed23:43

Sure did. It was odd for us. It was such a different type of business. But we met then. I was going to say, I don't know if you remember, but I was in an office building not very far from here. I came and annoyed you one day. I think you were doing acquisitions.

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Clay Williams23:56

I was in corporate development at the time. I thought we should buy some other equipment companies. I think I was trying to get us to buy an engineering house.

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David Reed24:07

You've always been so bashful, David. I know. I think I remember drawing this diagram to explain. You showed up with an agenda and a list: 'Here's what we need to focus on.' You let me be involved in making some mistakes and learning. I remember I didn't understand what you were saying with your accent. I still don't know what you're saying. It's not the accent, it's my brain patterns that are disconnected. But that was a nice moment because you were interested in me. I thought that was good because this packaging idea just seemed to make sense. The engineering house idea was a terrible idea. We made a couple missteps along the way, but we figured it out. You actually sent me to look at an engineering house, which became an education for me. I don't know if you were doing that on purpose. I think a lot of people were purposely pushing you in, like, 'You go look at that business,' because you come out going... I think I called you after half an hour looking at their books and was like, 'This is terrible.'

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Clay Williams25:15

We were all getting educated. That's right. That's what I loved about that time. We were doing a lot of acquisitions and learning about opportunities in oilfield services. Honestly, the industry wasn't dissimilar from what we're going through now. There was a very deep, hard down cycle and opportunities to deploy capital and make acquisitions. That was a really fun time for me. When we had the good times, I remember thinking, because I wasn't used to good times, 'This can't last long.' We were so used to... 'Let's enjoy it while it lasts.' But it's always going to be a cyclical industry. The big lesson is do your work for the up times and your down times. When the up times come, make sure you do the work to cover yourself. That was a good memory.

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David Reed26:05

So then your journey from there. What happened next in your career?

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Clay Williams26:11

I did a little time in operations. I think I was out of operations by the time we merged with Parker. Were you talking about pipeline services?

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David Reed26:17

Pipeline services. As soon as you said that, I'm like, 'What?' I came back to the pipeline. That was a short-lived journey. It was a couple of years there. Great people, very challenging business. We ended up divesting that business several years later, so we're no longer in it. But I learned a lot and got to work with a lot of great people. Corporate development, then moved to finance. When we merged with National Oilwell, Varco merged with National Oilwell in 2005, that transaction closed. I was CFO.

You were CFO of the combined company. And then CEO. Was there a journey where you were like, 'I really want to run something,' or was it just as it came along?

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Clay Williams27:07

I wasn't born feeling like someday I've got to be CEO. That's not necessarily the goal. 'I want tens of thousands of people working for me. That'd be great.' Actually, it's not everything. Not everyone is cut out to be. I'll just leave it at that. But what I would say is I'm more driven by wanting to build something and wanting to leave something that lasts. It's been the construction of NOV through the years more than what my title is within that. It's the former: 'What are we trying to accomplish here? What are we focused on doing?' That's been the driver, whatever role I play in that. It's varied from finance to corporate development to a little bit of operations to whatever. I'm happy to do it. But the reward is working with great people, which we both get to do every day.

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David Reed28:20

I would describe it as a servant leader. Your perspective on how you lead is not that you don't have a strong leadership position, but the way you do it is very much trust in people. How does that work for you? Is that something you've always felt and experienced, or grew into?

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Clay Williams28:46

I genuinely love the people that you and I get to work with every day. They are smart and capable, and I appreciate the fact they bring a different perspective than I do. I value that. But I think my job, your job, our jobs are to make everyone else's jobs easier. 'What can I do to help?' should really be the first thing that all of us ask when it comes to leadership and management. 'What can we do to make this entire organization more successful and help out the people that we work with?' That's just the best approach. The best leaders I've known in the industry have been that way. They were alongside you. They weren't dominating you. They were seeing something in you and pushing you in a good way. I've enjoyed that, and I think the company enjoys that because it trickles down into the culture. I hope so. We had a board meeting last week, and we were talking about the culture of NOV. Of all the great attributes of NOV, ranging from a 163-year history in this industry to fantastic technology and intellectual property to a big installed base to a reputation for really helping out our customers, it's the culture that I'm probably most proud of. How we interact with each other, the values that we all share. The more time I've spent in business, the more I've realized that's what's sustainable. That's the real heart of the enterprise. That's what's most valuable. I think that's appropriately where the best leaders inside of NOV, and we've got a bunch of them, are focused.

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David Reed30:41

That's true. The best way we hear it is when it eeks out from someone else, not from them. Someone telling you, 'I'm great at doing this,' or 'Our culture is great.' If it's true, we'll all know it. You hear it from good and bad. Saying it doesn't make it true or not. Feeling it, we all know it. It's not perfect because it's human beings, but for a very complex organization, it's quite enjoyable for a lot of people. On the whole, we've all got a lot to be proud of. We've come through a generational difficult downturn and have emerged with a strong balance sheet, better products, more products, a lot of financial resources, improving good, and improving performance. You got to the front of the cart as we were going down this roller coaster.

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Clay Williams31:35

I'll go in the front. It's been a rough ride, and we're faring very well considering what we've gone through. I don't think our industry could function without this organization. That's not an overstatement. We want that to be the case for a long time. I'm very proud of this organization, very proud of what you and everybody else here have done. I know we've got a bright future. It's really interesting now how offshore is coming back. We'll face some challenges in 2025, but the industry is continuing to recover, and that's the highest value add for our organization and our technology. I'm very excited about the future.

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David Reed32:24

I know you like to thank all the employees, but on behalf of all the employees, I know you don't want to hear this, but we're very grateful for you and for your leadership. Thanks for coming.

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Clay Williams32:35

Thank you. I'm grateful for all of you. Thanks for the kind words. Thanks for all that you do. To all the employees that are watching out there, I really do appreciate what you do for this organization.

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David Reed32:48

Thank you. Thanks, David. Great. See you next time.

The Engine Room, Clay Williams

About Clay Williams