Add flour, salt, pepper, and onion powder together in a bowl and mix well.
Depending on your preferences, you can sprinkle the cube steak with tenderizer (we used Adolph's at Peggy's Restaurant) and/or soften it with a meat tenderizer maller (or both).
Add the cubed steak to your flour mixture and coat well.
Heat the oil and butter together in a large frying pan.
Add your cube steak and brown each piece on both sides for 15-20 minutes (you don't need to fully cook them - they'll finish cooking in the gravy).
Remove the steak and drain the grease out of pan, but retain some of the drippings in your pan.
Add the mushroom soup, water, and milk to the pan and mix well (this will be your gravy).
Add your steak pieces back to pan and simmer on a low heat for 30-35 minutes.
Make sure to turn the cube steaks once or twice during simmering, and watch the consistency of your gravy. If it starts getting too thick, just add more water or milk.