Winning Approach with Human Capital

By Nick DeIuliis, President & CEO of CNX Resources

Business is a window into wider society, particularly in the arena of human capital and corporate culture. I field constant questions from fellow employees, friends, and media as to how the company manages its human capital effort. Philosophy, work schedules, compensation, pay-for-performance, diversity, recruiting, succession, and so on.

The attention focused on human capital brought realization of a need for a concise summation of the topic. A guiding template on how we build and embrace the team. An approach that works across all the short-term twists and turns of business cycle, labor market, industry, and society. ​

We Aim to Win

Make no mistake about it, this company is all about winning over the long-term. ​

Yet successful organizations go a step further than simply stating a desire to win. They clearly define what winning looks like.¹ There are three keys to victory for us:

• Growing our intrinsic value per share through focused execution and sound capital allocation. ​
• Making industry history with a unique opportunity set: the stacked pays of Marcellus and Utica, an integrated upstream and midstream, the demonstration and deployment of new technologies, and a one-of-kind asset base with associated environmental attributes.
• Succeeding in our intrinsic value per share being realized by our owners (i.e., getting them paid). ​ ​ ​ ​

These three objectives, although clear, are extremely challenging to achieve. An effective human capital ground game will play a vital role, and it must bolster these three keys to victory for the organization.

To fit in here, you can be short or tall, male or female, quiet or boisterous, introverted or extroverted, liberal or conservative, and left-handed or right-handed. Those attributes don’t matter in the context of the team winning.

But other attributes matter greatly. To succeed here you must have a competitive spirit, be highly motivated, and have a will to win…our way.

The Values Mantra: Responsibility, Ownership, Excellence…Responsibility, Ownership, Excellence…

If those are the three keys to winning, each member of the team must pursue them while remaining true to, and by reinforcing, our values. The values of the company are constants and do not change with economic cycles, price environments, or cultural trends. The trio of responsibility, ownership, and excellence are sacrosanct.

Individual and collective team actions must reinforce the values of ownership, excellence, and responsibility. And our actions must never defy those values. Thinking we can win by not remaining true to the values, even for only a discrete decision or for a short period of time, is a guaranteed recipe for failure. Thus, it can’t be acceptable if we desire success.

Our values of responsibility, ownership, and excellence serve as decision filters for everything we do, from the mundane day-to-day tasks to the most consequential of strategic decisions. And across the entire team, from the newest hire to the CEO.

People ask all the time: How do you define responsibility, ownership, and excellence? My answer is always the same: I know we define them with well-sculpted sentences, but I don’t know the definitions by memory. However, I instantly know responsibility, ownership, and excellence when I see them. And their absence can be quickly detected.

Our Winning Culture and Values In Action

Once you define what winning looks like, and which values we remain true to when pursuing victory, the tactics to deploy with human capital become obvious. Consider some of the more popular or material tactics:

• In-person work: We work in a highly competitive and challenging industry. The safe and efficient manufacturing of natural gas is an inherently serious endeavor and requires focused, tight execution. Our operations team on pad and at the plant do not have a remote work option available to them, and the operations team is the foundation of how we create value and manage risk. Although some of us work outside of operations, ultimately everyone in the organization supports operations, directly or indirectly. If the client/customer works in person, a service provider is most effective when working in person as well. Also, it’s tough to win our way and make history by having everyone working from home every day. Especially with today’s intense scrutiny, which demands tight coordination. Teams simply perform better when they work together. We have experienced the loss of a few talented team members because of their desire for remote work; that doesn’t make them or us wrong, just a bad fit for each other. And yes, many of our competitors allow remote work; but we win by differentiating in the right ways.
• Flexible schedules: In-person work does not mean inflexible work schedules. Motivated team members exuding responsibility, ownership, and excellence should sculpt work-life schedules best suited for them and their team. Work schedules should be developed at the supervisor-employee level across the company, not something mandated by a one-size-fits-all policy. A team of 450 employees with a singular, winning mindset can and should employ 450 tailored work schedules that help the team achieve our collective goals.
• Recruitment: If we are successful in articulating our view on winning, our values, and the importance of our industry, region, and company, then a potential candidate for hire will accurately assess if they are a good fit on this team. And since people are indeed our most important asset, we will invest the time to interview candidates so that the candidate will have interacted with a complete line of management, from the direct front-line manager up to the CEO. The objective is to minimize uncertainty about the position and the company so that the candidate and company can make informed decisions. ​
• Retention: A winning team should expect some attrition within its roster so that it continually improves. Some may exit via self- (or often, joint-) selection, if our culture of winning and values are not a fit. That is not a failure, but instead a rational affirmation of the culture. We may lose individuals to opportunity elsewhere; that’s the price of having top performers on the team. And there may be instances where the individual is asked to leave the team because of performance not being adequate in terms of our winning philosophy or not being consistent with our values. ​
• Diversity: We should be incredibly inclusive from every imaginable metric: age, race, religion, sexual orientation, thought, socio-economic factors, gender, background, and experience. The wider our inclusive net of recruitment, the better the team will be. And yet we should be incredibly selective when it comes to insisting on hiring only individuals who exude our values and who buy into our paths to winning. ​
• Mentorship Academy: A special opportunity exists with our region’s young adults from urban and rural locales. The Mentorship Academy was created to introduce this group to career paths, our industry, and our company.² New hires into our team from the Academy are a long-term investment to reinforce our values on behalf of our owners, team, industry, and region. Each young adult we hire from an Academy class represents opportunity for us to bolster our culture, because leaders who fit our winning template will run to the challenge of mentoring an Academy hire. The Academy is not a public relations exercise; it is a proving ground to display leadership and bring our corporate values to life. ​ ​ ​ ​
• Compensation: You get what you pay for in life and in business. Compensation should offer a significant at-risk portion that directly correlates to how we win and our values. At-risk means compensation is not an entitlement, and it is certainly not a gift; it is earned by every member of the team. A winning team and high-performing individual should receive compensation above the market median and peer competition. Luckily, that defines our company and compensation levels, year after year. But we must stay focused on winning within the values to sustain and grow compensation levels.
• Advocacy: Winners are driven, with a bit of a chip-on-the-shoulder disposition. We desire such swagger, particularly with advocating for our region, industry, and company. Undue criticism and fabrications about ‘us’ (region, industry, company, etc.) should irk. We built the company’s Foundation to serve as a shared vehicle for employees to begin their advocacy journey.³ There is a strong correlation between volunteerism, community engagement, and advocacy. Each member of the team is encouraged to utilize the Foundation to advocate in their own unique way. Like work schedule, flexibility is key and each person’s advocacy effort should be specially tailored to suit them while fitting within the wider effort. ​

Final Thoughts

We aim to win. We know what winning looks like. We understand our values that we must win within. And we thoughtfully apply tactics in our human capital effort that will enable winning.

The best summation of all this is found with a tagline from our company’s past in the arena of safety: ‘see something, say something, do something.’

Has there ever been a better phrase that captures our values of responsibility, ownership, and excellence? Everywhere you go and every day you are on the job, repeat that saying in your head over and over. Be responsible for all of it. Own all of it. Excel at all of it. Don’t wait for the person next to you to act in a way in which you could act first.

Making ‘see something, say something, do something’ contagious means we make history sooner and we win more.

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¹ We granularly define the roadmap of our strategy and business plan. ​ Check out online our Appalachia First vision, our Sustainable Business Model, and our Tangible, Impactful, Local (TIL) approach to community investments.

² Learn more about the Mentorship Academy here.

³ To learn more about the CNX Foundation, check out our 2022 Corporate Sustainability Report.