Catalyst

Multinational oil and petrochemical companies’ diverse workforces are an important resource that is relatively untapped and should be used to greater advantage, says Rob Routs, executive director/downstream at Royal Dutch Shell. In a keynote address to the 41st European Petrochemical Association (EPCA) annual meeting, which began today in Berlin, Routs said companies “that do not have a policy encouraging diversity and inclusion will have a tremendous disadvantage on the world stage.” That diversity may be cultural, ethnic, or intellectual, or related to gender or sexual orientation, Routs says.
Multinationals that supply or consume energy face three major challenges, Routs says. They are: Keeping up with demand; shrinking supply; and the impact of energy use on the environment, he says. “All these challenges will impact all of us,” Routs says. “Addressing these challenges will involve a wide array of people around the world, and we must seek out talent wherever we find it.” Making the most of this diversity is at the core of Shell’s strategy, Routs says. “We have different people from different backgrounds and cultures, and we’ve got them to work together,” Routs says. “Human energy” is a great asset and firms “should not waste this most precious resource,” he says. Companies should not “tolerate” difference, they should “value it,” Routs says.

–Ian Young in Berlin

Not all the 2,000-plus delegates at the 41st annual EPCA meeting in Berlin attended the morning business sessions at the Intercontinental Hotel, but those that did heard some inspiring thoughts on using Diversity for Innovation from Prof Gary Hamel of the London Business School and Fellow of the World Economic Forum. He says successful companies of the future need to shed national identities, embrace the creative juices of diversity, and rip up the disciplined models of Western corporate business (see thoughts from CW president, John Pearson, below).
The challenge will be difficult for the still overwhelmingly white, male, middle-aged, dark-suited, petrochemicals community. But Dr . Rob Routs, executive director of Shell Downstream at Royal Dutch Shell, gave a robust presentation of some of the tolerances and liberal attitudes in Shell – including gay executives running businesses. Shell has been notable in the industry for its scattering of female and Asian executives in top positions, and Routs says he has a particular focus on replacing expats with local management. Should we pinch ourselves, or is an appetite for sexual and cultural liberation really forming in the petrochemical industry?

-Lyn

Steeped in the management lore of California’s Silicon Valley, Professor Gary Hamel seems an unlikely guide for the chemical industry, but his EPCA speech this morning was truly provocative.

Hamel argued for changing today’s management paradigm of demanding conformity to get productivity gains to one of valuing diversity, allowing employees more freedom and flexibility to generate a constant stream of new ideas, some of which will be the winning ideas of the future.

He drew lessons from Google and W.L. Gore. Common threads were: horizontal as well as vertical reporting lines; employees with time allocated for thinking and crazy ideas; uninhibited information sharing; small, independent teams to generate ideas; and peer review to gauge performance and even salaries.

Can any of this make sense to chemical companies? The answer is that it better had. An industry enjoying the good times, characterized by sheer bigness, high capital intensity, and a drive to low costs, can feel itself unassailable from new ideas.

Unfortunately, that production-efficiency mentality also dislocates the industry from innovation in its processes, its marketing and its ability to respond to change. And it dislocates the industry from its future workforce, the emerging army of the peer reviewed, who care little for a life of conformity.

It is time to listen to the Hamels of the world and loosen the reins to our employees just a little. Challenge structures, challenge ways of working, challenge the way we reward performance and exult in a little creative anarchy. Above all, let’s stop being just the fat, dumb and happy proponents of low-cost production of today, and become the (slightly paranoid, slightly off-balance) innovators of tomorrow.

-JZP

Here in Berlin and the hotels are already humming with the chatter of chemical business. Rain has stopped and the sun is out.

-Lyn