The SEF is the Senior Executive Forum
The CEO took that platform to launch a new set of behaviours for Shell
I have to say I was impressed by the SEF output last week and the webcast on Tuesday. I don’t by now have much to lose by being critical and I’m not that easily impressed, so you can conclude it is genuine. It makes me feel good for Shell and our staff.
While we can quibble about the speaking style and the obvious planting of questions, not to mention the cringe making automated phone calls beforehand, it was great to see all the faces from around the world, and the overall impression I took away was of a CEO with growing confidence after a year in the job. And confidence matters so much.
This was the launch of the new direction, after a year of transition and cost cutting, and that was presented honestly and is just at the right time, even if we all know that the pain and ramifications of transition are not truly over yet. And the vision for me started in exactly the right places, with the brand, the customer and behaviours.
In my view this shows that Peter has chosen his advisors well, and has built on his experience working with marketing businesses in SEOP and elsewhere. Brand and customer are not natural starting points for EP types or manufacturers, nor people like McKinsey for that matter, and it is a good departure for Shell to think this way. All the best companies who truly compete in open marketplaces do this. “Powering progress together” hardly trips off the tongue, but is clear and sound. So is the vision to become the most competitive and innovative energy company – don’t believe for a minute that cost consciousness will diminish from here on as a theme, it won’t and it can’t.
I am less convinced about the strategy part, strategy snob that I am. It was good to hear an admission that “more upstream, profitable downstream” was more capital allocation tool than strategy, but I’m not sure that what is in its place is much better. “Get our house in order, bring the projects onstream, tackle new opportunities” reads more like a business plan or shopping list than a strategy to me. There is certainly nothing distinctive about it. Maybe there is more that will not be shared.
Another clear challenge is in the articulation of customer. This was brave and clear, but begs strategic questions. Striding the four customer groups quoted (consumers, businesses, resource holders and governments) is tough or even impossible over time, as a truly focused approach to one group will necessarily compromise another. That for me is the dominant reason to advocate the radical step in the end of breaking up the company, in a way where each part can focus on a more homogenous customer set.
I find a clue to strategy in the list of behaviours. The classic book “The Discipline of Market Leaders” posited that a company had the choice of three strategies: operational excellence, customer intimacy or innovation leadership. Like all such theories, it is simplistic but telling. Exxon has followed operational excellence for a long time, while Shell tends to fudge the issue. Whenever I hear “we will always be expensive” I cringe and realize many of us still live on planets other than earth. Now the new list of behaviours actually gets close to defining a classic operational excellence strategy. So perhaps, together with the shopping list, they are enough.
I love the behaviours. I have always believed that behaviours are a good way to influence culture and strategy, and these are excellent (although the little descriptors on the web behind each one don’t help at all, in my view, too much consensus at work there guys?). But the challenge will be in making it happen. Actually, I liked LAT too, and I found it sad that Jeroen van der Veer seemed to lose heart with driving them so soon after their launch. I can only assume that he couldn’t bring his full EC and EC-1 along with him with enough enthusiasm.
And this will be the challenge again. I have to say that the culture and behaviours I witness again and again in our upstream (ex EP and to a lesser extent ex GP) are almost the diametric opposite of the five. Our only focus seems at times to be fighting each other rather than any competitor. Customers are barely recognized, even the word is discouraged. Delivery is undermined by defensiveness, dashboard management and lack of transparency, and speed by lack of courage. Finally, if people choose to convince themselves day after day of how complex their business is, that will become self-fulfilling and fatally undermine simplicity, no matter how many ESSA days are planned.
I’m aware this is a generalization based on a very limited view, and even with that I have worked with some truly wonderful role models. Yet the impression is a strong one, and it does fit the evidence. I can even add a singular lack of cost consciousness to the indictment. I hope this is not me being bitter once again about the swallowing of Global Solutions (and GP), yet I can’t help but think that the five behaviours were all alive in GS and it is such a waste to have to rebuild them now.
So the real test will be staying the course and demonstrating real change. Peter, you are right, have belief. And what can the rest of us do? We can form an army of winning behaviours through the organization, so that if there is any reluctance at senior levels we can try to squeeze it from below as well as above. With care, we can confront poor leadership behaviours, and it helps to know that up there someone is on our side.
The other thing about behaviours is the challenge of how to know whether we are winning, since they don’t lend themselves to KPI’s. So here are three challenges for the next SEF in twelve months time.
First that we see different faces. Humans cannot change that much, and it is simply not credible to believe that the same people who behaved one way can suddenly en masse behave the opposite way. There has to be some injection of new blood, dare I suggest starting very near the top.
Second that by then we have not just a good vision and good behaviours, but also a credible, distinctive strategy. One that the analysts can articulate and support would be a bonus.
And third, a random sample of Shell people interviewed next May could not just list the behaviours, but tell stories about their own journey and the good changes they see around them.
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