Adaptation is an interesting concept. From a biological standpoint, it is the process whereby an organism becomes better suited to its habitat, which means that the organism has changed to ensure its survival. In other words, being able to adapt is a matter of life and death. For a lot of companies right now, survival is NOT ensured. In light of the global financial crisis, how a company faces difficult times, might well determine whether that company succeeds or fails. At the RMI Oilfield Breakfast in Houston on July 28, Jim Wicklund, principal of Carlson Capital LLC, talked about some of the management challenges being faced by the oil and gas industry and how a great number of managers are failing. Many companies are “reacting,” not “planning,” he said, and that is not a strategy. “The industry must adapt,” Wicklund said, explaining that long-term strategies are critical and “have to eclipse what is happening today.” The traditional move to lay people off when times are bad and hire them back when times are good is not a strategy, he said, noting that in a cyclical industry such as this one, there is no way to avoid ups and downs. “Conventional wisdom has to go out the window,” according to Wicklund, if the industry is going to weather the current crisis. Thinking outside the box is critical, but unfortunately, the industry is “woefully short on good management and good directors,” he said. And the damage that can be brought about by bad management is boundless. “Bad management can screw up a wet dream,” he said. “The boards have got to get more involved,” Wicklund said. Crude oil and gas prices will trend higher over time, and there will be a rebound from this present financial crisis, but poor management during this critical time could cause immense damage in the long term. In the end, it is long-term planning that will make or break a company. That should be the focus at a time like this, Wicklund said. “Don’t mistake survival for success!”