Sorry for the American spelling. It is super bowl weekend after all. I love that game. My poor family have to put up with my hogging the TV on Sunday nights all through the autumn (fall?) and the withdrawal symptoms in February.
Who will be the super-bowl MVP? Probably Tom Brady, Randy Moss, or Eli Manning. Less likely Assante Samuel, Vince Wilfork or Michael Strahan. Offense is sexy. Offense makes headlines. Even though defense wins super bowls.
In soccer, think Man U and you think Ronaldo and Rooney, not Vidic or van der Saar. Same thing.
One difference between soccer and gridiron is that the same 11 players stay on the pitch. They have offence and defence duties, even if they have their specialities. The hallmark of the very best teams, think Holland in the 70's, is how their players are able to do both, and to move seamlessly from one side to the other.
In business too, there are times to play offence and times to play defence, and the smartest companies are able to do both. A classic organisational dilemma is how to innovate while also operate, and there is much literature about it. Christensen our Mauborgne are top on innovation, people like Kaplan great on operation. Even the gurus can't do both!
Shell Downstream has got itself in a defence mode. All the classic signs are there - tight operational plans, drives for standardisation, emphasis on implementation, use of benchmarking and cost type metrics, a whole attitude that this is a dogfight and we are not going to let the other guy into our end zone.
That is what "profitable downstream" means and overall it feels appropriate. Refining and B2B are mature industries where there the choice is to be operationally excellent or die. In lubricants or retail, there is a case for an offence/defence balance, but it is hard to argue strongly against a bias towards defence, even if we maybe miss some opportunities to change the game.
But there are some places which in my view scream offence. One is the CO2 area, subject of part of the previous blog. The other is biofuels. Here you have wide open spaces on the wings, no off side rule or pass interference rule, and no Patriots owning the turf. The prize for the innovator is enormous - they can write the rules and win big time.
Incumbents generally struggle to take such offence positions - that is how supermarkets took away our retail lead and Easyjet caught the big boys napping - so it is not easy. But take Bio. Our dominant logic is defensive - Shell has a challenge meeting regulations, Shell needs to be cost leader, Shell needs to lobby to avoid falling short of product, Shell needs to patiently build an operationally excellent business around assets. An offensive dominant logic could look very different - the industry has a challenge meeting regulations and we could lead by doing it better than anyone else, gaining share and forcing others to follow and buy from us, Shell can take options to create market value and buy into a range of non fixed assets like technologies, services, relationships, Shell can be a value and brand leader, Shell can lobby to drive the industry far out of its comfort zone so relative leaders can lock in long-term value.
I fancy this. No company has a bigger chance than us of pulling it off - mainly because of our existing retail brand and network. Look at the Private Equity players, flocking into option positions, ready to sell out again as times change and value shifts around the value chain. That could be us. That could change the game.
Same with CO2. Everyone is struggling, in our industry and others. A grand alliance can take ownership of the space with credibility. A dynasty bigger than the pats or United. Might even help to save the world too as a bonus.
But it needs an offensive mindset. It is so hard to do that at the same time as defense, and with leaders schooled in years of 451, all behind the ball, play it tight, pound it on the ground, run down the clock, no interceptions. We've got some great Wilforks and Strahans and Vidics. Could we get Randy Moss as a free agent, or listen to the Ronaldo's festering in our ranks? So tough, but what a prize!
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