How Robert Workman Built Distribution NOW Into an Energy Powerhouse Through Strategic Leadership

When Distribution NOW Inc (DNOW) spun off from National-Oilwell Varco in 2014, few outside observers understood the true strategic value of the move. But Robert Workman, the company’s CEO, had a clear vision. Rather than seeing the separation as a disadvantage, Workman recognized it as an opportunity to accelerate growth and execute acquisitions with unprecedented agility. His leadership during this period—particularly through the brutal 2015-2016 energy downturn—demonstrated why he’s become one of the most respected figures in the energy distribution sector.

The Strategic Advantage of Independence

For decades, Workman was part of the National-Oilwell Varco leadership team, watching how management made capital allocation decisions across multiple divisions. At NOV, the manufacturing segments generated substantial EBITDA margins compared to distribution operations. When cash flowed in from the distribution business, corporate management would deploy it to higher-margin manufacturing businesses or drilling equipment divisions, limiting reinvestment in distribution.

After the 2014 spinoff, this dynamic shifted dramatically. “Now we have control of our own destiny,” Workman explained to the Motley Fool. For the first time, DNOW could retain its cash flow and redeploy it into organic growth and strategic acquisitions without competing for capital against other divisions. Workman brought his entire core management team with him—including CFO Dan Molinaro and General Counsel Raymond Chang—ensuring continuity while establishing DNOW as an independent player.

This focused capital strategy became Workman’s defining characteristic. Rather than pursuing every acquisition opportunity in a hot market, he and his team maintained strict discipline around valuation, targeting deals that aligned with three specific growth vectors: geographic expansion outside North America and Canada, product line expansion (particularly in artificial lift, electrical actuation, and pumping systems), and deeper penetration into midstream and downstream markets.

The M&A Playbook and Accelerated Integration

Workman didn’t invent acquisition strategy from scratch. He imported NOV’s proven M&A playbook—decades of experience in targeting, valuing, and integrating companies. But DNOW improved upon it. While NOV relied on thousands of Excel spreadsheets to manage integration checklists, Workman’s team automated the entire process with software.

“Day one, all teams have access to the same data,” Workman noted. This eliminated the redundant requests that typically bombard acquired companies during integration, accelerating the process while maintaining quality.

The approach paid dividends. By mid-2015, DNOW had completed nine acquisitions, with major deals in Challenger Industries (a midstream specialist) and Odessa Pumps and Equipment (a fabricator of custom pumping systems). These weren’t random acquisitions; they plugged identified capability gaps. Odessa brought expertise in designing and fabricating custom fluid-movement systems—capabilities DNOW lacked in the Eagle Ford and Permian basins.

Navigating the Worst Energy Downturn in Modern History

When oil prices collapsed 60% between 2014 and 2015, the energy industry faced unprecedented challenges. Yet Workman’s demeanor remained calm. He’d lived through the 1980s oil bust in West Texas and weathered numerous cycles since. But this downturn was different.

“This decline is worse than anyone in my lifetime,” Workman told the Motley Fool. “We dropped faster than 2009, and the sharpness of the decline is the worst of my career.”

The severity stemmed from a revolutionary change in how operators managed capital. Historically, drilling costs dominated the economics of well development. By 2015, that had shifted—completion and fracking costs now commanded the largest share of well economics. Operators responded by drilling wells without completing them, essentially banking unfinished wells for completion when prices recovered.

This dynamic created both challenge and opportunity for DNOW. Distribution companies feel downturns first and recover first—they have no backlog to buffer the initial decline. When a rig shuts down, orders stop immediately. But when rigs restart, demand surges rapidly. During a brief oil-price spike to $60 per barrel in mid-2015, a dozen rigs returned to work in the Permian, each requiring $30,000-$40,000 worth of parts within 24 hours—roughly six weeks of normal consumption compressed into a single day.

Workman recognized that DNOW’s distribution model made it uniquely vulnerable during downturns but uniquely positioned to capture rapid recovery. Most competitors couldn’t manage through severe, compressed cycles. DNOW could, and that competitive advantage drove Workman’s strategic confidence.

Building Profitability Through Operational Excellence

Beyond M&A, Workman’s strategy centered on improving operational efficiency and working capital management. DNOW had set an ambitious goal of reaching 8% EBITDA margins—achieved before the major acquisitions of 2014. The question was whether a larger, more complex organization could replicate that margin rate.

Workman believed it could, provided integration happened cleanly and overhead duplication was eliminated. The 2015-2016 downturn, counterintuitively, accelerated this goal. Expense reductions that would have been “tooth and nail” in a hot market fell more naturally during a downturn. DNOW reduced expenses more aggressively than anticipated, moving closer to the 8% target even as revenues contracted.

Workman also emphasized three other critical metrics for investors:

Organic growth: Beyond headline revenue growth (which could be acquisitions-driven), DNOW tracked revenue per rig without acquisitions. “The minute we have to buy revenue growth, we’ve got a problem,” Workman stated bluntly.

P&L management: Regardless of market conditions, the company focused on improving all profitability ratios—EBITDA margins, net income, return on capital.

Working capital discipline: “This business’s biggest risk is working capital,” Workman emphasized. Distribution requires minimal fixed capital but significant investment in receivables and inventory. Managing working capital as a percentage of revenue was paramount to profitability.

Robert Workman’s Leadership Philosophy and Market Vision

What distinguished Workman’s leadership extended beyond operational excellence. He drew inspiration from organizational development experts like Patrick Lencioni and Jim Collins, conducting quarterly leadership development exercises with his management team. He also reflected deeply on his 15 years at NOV, where he observed firsthand how leadership teams navigated capital allocation and market cycles.

Workman’s vision for the energy industry itself proved prescient. He believed the U.S. had become the new swing producer, displacing OPEC’s traditional role. Unlike OPEC producers who require years to restart large projects, U.S. land-based operators could mobilize rigs and drilling activity in weeks. This shorter response cycle would produce more frequent, compressed market cycles—challenges for most competitors but opportunities for a disciplined operator like DNOW.

For international markets, Workman recognized a different dynamic. National oil companies often prioritized social programs and couldn’t respond as nimbly to price signals. Offshore projects required years to restart. These structural differences meant international markets would lag U.S. recovery, a reality that shaped DNOW’s geographic strategy.

The Measure of Strategic Value

Robert Workman’s value extends beyond typical CEO metrics. His ability to navigate two distinct phases—building DNOW into an independent powerhouse during a hot market, then demonstrating operational and strategic discipline during an unprecedented downturn—showcased why institutional investors and industry peers regard him as a transformational leader. His disciplined approach to capital allocation, willingness to pass on acquisitions that didn’t align with strategy, and confidence in DNOW’s competitive position defined leadership in a challenging environment. That strategic clarity and execution excellence represent the true measure of his impact on Distribution NOW’s trajectory and shareholder value creation.