Oneok to the Core

David Kyle’s career at Oneok reflects events at the Tulsa-based energy company.
Oneok marks its 100th year this month. Not only has 2006 been a milestone, but many events will likely serve as a launch pad for the next century.
Founded in 1906 as an in-state natural gas pipeline, Oneok grew to become the largest natural gas distributor in Oklahoma, Kansas and the third largest in Texas. Operating as Oklahoma Natural Gas, Kansas Gas Service and Texas Gas Service, Oneok serves nearly 2 million customers in the Mid-Continent.
As Kyle has continually moved upward through the business units over his 30-plus year career, so to has the energy company expanded to meet challenges.
Kyle assumed leadership at the millennium, has served as a bridge between centuries and is a strong influence to move the company forward.
Kyle, 53, has served as Oneok chairman, president and CEO since August 2000. Prior to that, he spent three years as president and chief operating officer of the company.
Kyle started his career with ONG in 1974, the same day as Larry Brummett, the man Kyle succeeded in 2000. Both began as engineer trainees.
“If you would have asked either one us at that time, ‘Where will you end up?’ We both would have said, ‘If we ever get to that (CEO) job, it would be great.’ But, I always enjoyed the jobs I’ve had.”
Both moved quickly up through the ranks.
Kyle rocketed through the company, serving in a number of positions prior to being elected vice president of Gas Supply in 1986 — 12 years after joining the company. Then he was named executive vice president of ONG in 1990 and ONG president on Sept. 1, 1994. Kyle became president of Oneok three years later to the day. He was elected board chair and appointed CEO in 2000.
“It sure did not seem to be like a rocket at the time,” Kyle said, with a chuckle.

A State of Becoming
But Kyle and Brummett, the then- Oneok chairman, saw opportunities beyond just being a regulated, regional utility business. The pair had a vision that transformed Oneok into a multibillion-dollar energy giant.
The change has been dramatic. During 1994 and ’95, ONG comprised 85 percent of Oneok’s operating income. Today, ONG comprises less than 20 percent.
“All the distribution businesses together do not equal 20 percent (of the company),” Kyle said.
Sadly, Brummett lost a battle with cancer in August 2000, at the age of 49.
“Larry coined the phrase, ‘Constant state of becoming,’’’ Kyle said. “We still are.”
While he took advantage of the opportunities, Kyle made sure he made the most of each stop — whether it was Oklahoma City or Ardmore.
With each job promotion that Kyle received, he was excited about that opportunity.
Often, Kyle replaced someone who retired.
“It was one who was a friend and mentor. I did not look at those opportunities like, ‘Wow. I get that job,’ because you are losing a friend and mentor,’” he said. “It was under somewhat adverse circumstances that I have this job. It is not a job I aspired to nor one I really wanted. But, given the responsibility and given the challenge, you have to step up. I am real proud with what we’ve done as an organization. It is a management team. And, it is that — a team. I am a player/coach. I am on the field. But, it is a team effort.”
Kyle focused on the job he had.
“I took enjoyment out of those. I can remember thinking; ‘I hope they leave me in this job because I love this job.’ That happened to me more than one occasion.”

12 Years of Growth
“We are growing, developing and moving into new areas,” Kyle said recently in the company’s boardroom, overlooking downtown from Fifth Street and Boulder Avenue. “This is a whole lot more fun — for me and the employees — to work in an organization that is growing.”
The activity demonstrates how much the company has changed in just the last 12 years.
Even in a regulated environment, Oneok remains distinctive, Kyle said.
And, the company has grown even through the difficult times five years ago, when energy prices plummeted and the economy soured.
“I will tell you that I do not believe in layoffs,” Kyle said. “I believe that layoffs are a failure of management not anticipating a potential downturn and staffing inappropriately.”
The company adds staff “judiciously,” he said.
“If you ask a business unit leader, or a manager, ‘Are you fully staffed?’ ‘No. I could use some more folks,’ and that is what we prefer,” he said. “Even during that last downturn in the energy market — Oneok never had a layoff. All during that time period we have been growing.”
The company continues to evolve. In 2005, Oneok sold its production unit.
“It is another part of the ‘constant state of becoming,’” he said.

A Team Approach
Kyle’s philosophy and what he coaches young executives to do is perform well at the job you have and “the future will take care of itself.”
“I never worried about the job I was going to have. That is advice I give young people today when I talk to them. ‘Do not focus on what is going to happen.’ Just do a good job with the one you have.’”
The organization values and embraces the collaborative approach, Kyle said, referring to himself, John Gibson, president of Oneok Energy Services, Sam Combs III, president of the Oneok Distribution Cos., and Jim Kneale, executive vice president of finance and administration and CFO.
“With the fundamental notion that among the four of us, we can arrive at a better solution to a problem, or a better creative direction than any of us can alone,” said.
While some might claim the philosophy handicaps the company in the decision making process, Kyle disagreed.
“We can effectually handle transactions in an efficient manner,” he said. “We operate with the idea that, ‘If you have no time, take the time. If you do not have the time to assemble quickly: Make a decision and move forward. That is what we do.”
The results speak for themselves, he said.
Oneok’s second-quarter net income increased more than three-fold to $77.8 million compared with $24.9 million in the same period last year.

Committed to the Company
Kyle is a second-generation “gas hand.” Born in Wichita nearly 54 years ago, Kyle’s mother worked at Cessna. When he was a toddler, his father moved the family to Stillwater where he finished his education. He worked for Cities Service, then Oxy and the Williams Cos., eventually spending more than four decades in the energy sector.
Most of Kyle’s early years were spent in Oklahoma City.
“It was a great time to be a kid,” Kyle said, referring to the era of the 1950s and ’60s. “Oklahoma City was a great place to grow up.”
Kyle’s family never had to lock their front door. The kids played out every night past dark.
“It was a different era,” he said. “I am sad our kids do not get to experience that (today). They will have their own experiences, of course, but it was a great time to grow up.”
The significance of the centennial is the fact that it is so rare for a company to be around 100 years — to have survived and thrived,” Kyle said. The reason is peoples’ long-term commitment to the company and to the community.
“We understand that service commitment manifests itself in several ways — through its foundation support, through a number of community activities across the statewide system,” Kyle said. The Oneok foundation has awarded more than $20 million since its creation less than 10 years ago.
“I’m proud of that,” he said. “The culture of this organization recognizes the worth of the individual — the dignity and value that embraces the philosophy of doing the right thing.”
Today Kyle would say it is a great time to be a Oneok employee: The legacy of Oneok will always be the people.
“I am a custodian of that cultural legacy. It is here, not something just of my doing, not just Larry. It has been here since I’ve been with the company,” he said. “And it will be here after I am gone.
“It is the glue that binds us.” ?

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