The following is an extracted account of a meeting with the first gentleman from Shell on an international assignment, some 25 years ago. The answers are illuminating and self-explanatory.
We have operations in 120 countries, and we are selling in 122. We employ 110,000 globally. I am an expat on my first assignment.
In my case, we had a very specific need for doing a lot of acquisitions, specifically in finance and I have a lot of experience in the States with that. So in Shell’s worldwide resource pool of finance staff, I had the best experience that just happened to come from America. Technically, I could just as easily have come from Malaysia, Indonesia or Argentina. But that’s not likely. In the fields of finance and economics many of the new theories and evolutions emanate out of North America, particularly from US. So we are keen to have people from the US who are more advanced than some of the other countries just by nature/the maturity of capital market in US. So for Shell, Americans tend to be more skilled because you are living in a country in which the latest understanding of financial instruments/technology is developed.
In Shell we have something called Shell Cores/Values, which we have had for the last 50 years. It used to be called The Conduct. We changed that a year ago and it is now called the Shell Shared values/principles statement or something, which is very unusual. We do not lie. For example even if it is somewhere where that is customary, we won’t lie. We would operate under environmental standards up to the standards of the developed countries. So in developing countries we will operate at a higher standard than they would expect. It is something that can complicate things, but it is a standard way in which Shell will operate. And that is critical. To really have an international operation you have to have some shared things that people believe in. But they have to be institutionalised values. So many companies fall on that. They say here are our shared beliefs/values. Some people, maybe the Chairman, writes them. But to get people from 50-60 nationalities, all behaving the same way, believing in the same values is very difficult. It is a self-selection process, so you veto yourself out before you select yourself in. So you say to yourself the way this company operates, the kinds of behaviours that people enforce upon each other, and support it or not support it. Generally, you’ll find that people either deselect or select. Actually, anywhere, in the military, any company, or non-profit organisation, or school, they all have to operate under some set of principles of what they stand for. You can’t make progress or stick together if you don’t.
There is an informal network within Shell, where managers are expected to develop staff, high quality teams, and in doing that we are all accountable for spotting people and ensuring they are the same in having experiences in other settings. So part of the process for me was that I spent 3-4 years around the guy who runs the group finance controller/ director before I came over. We had an expat manager in the States who was the chief financial officer, who said you really ought to spend some time with Steve Rogue. So Steve came to visit us, and then this assignment became available. Steve is British, but he has worked all over. I would be very untypical. The typical Shell executive would have spent time in at least 10 countries. There is now a new generation, and this is changing due to a lot of reasons, technology is one. Mainly the changes are changing that. When they started 30 years ago, they just did it and that was what you did.
From the point of view of Shell, my success would be judged on: did I bring in a new perspective? Did I close a number of transactions that perhaps would not have gone without me? From my point of view it would be: did I built a more unique set of skills and capabilities, which I would not have the experience of had I been in another environment? Am I more capable now than I was 2 years ago? Did international exposure give me more skills? Yes, I am leaving them but that’s a part of the new employee contract. Shell, like all other similar companies, cannot meet all our professional or family needs every time. They can most of the time. The Chairman of the company came and spent hours with me when I said I was leaving. We agreed that I am going to go to this job, but they’d love to have me back at anytime and at a higher level. So their view on this is that it’s just another assignment, it’s just for another company. That is OK. I have some specific needs about where I want to live, and I am going to develop a specific set of capabilities around the power industry that I could not get in Shell. So I go to this new assignment and within 3 years I will know more about power and power development than I would have ever known in Shell. It will give me deep experiences in chemicals, in oil, in gas and more deep experiences in power. So I would have worked in a deep way in all these industries. And it specifically meets some location needs that my wife and I have. So that to me is perfect. It’s probably naïve to think that Shell would meet my family and professional needs every time. But we have the right cover arrangement. There are good model industries to look at, like the construction industry.
No resentments at all. They understood this opportunity. Entergy gave me an opportunity all round, not just financial, that Shell could not beat. The most important at the moment is that we will be near my wife’s family at a very important time in their life. Her father is very ill. Her mother is getting very old. It’s very important to us to be around them. The professional challenge is not quite good as Shell, but it is quite good. An older Shell manager told me if you get 90 percent of your family and 90 percent of your career right you are doing very well. In this case 100 percent of the former and 90 percent of the later is right. We think this is great living and we would like to come back say in 5 years time, when we are a little older. At the moment I want my children to know what it is to see themselves as Americans.
Shell has a big network of people. Particularly with technology now, the network is deeper and broader. A manager in Beconfield might e-mail or video-conference with a manager in LA. We have what is called “open resourcing”, which means that all the jobs within shell are advertised on the intranet, worldwide. If I am a young pressure engineer in location A and see a job for an engineer in location B, I can e-mail the employing station and say these are my qualifications and I would like to come.
The dominant flow of expat direction is via disciplines. In my case for example, the centre for finance is possibly London, Houston and Melbourne. There are a few others, but you can’t really get into very interesting finance without being in London or New York. Sure there is a Malaysian around, and I am sure that one day he will be running Shell.Another Malaysian-American will be the next Chairman after the current one. We do have a strong British, Dutch overprint, and have said that we would like to have four core nationalities: American, British, Dutch and some South East Asians. But I’m not quite sure myself, because, for example, from the business skills point of view, some South Americans are quite talented. We just had our Leadership Group meeting in Holland where top managers met from all over the world, and you couldn’t really see a dominant nationality. Americans were 20%, the British 18%, the Dutch 15%, then we had Brazilians and so on.
In terms of the movement, years ago, we had that sort of outdated colonial attitude. But we killed that now; that model was a neat, smart model 100 years ago. Now we purposefully have nationals running the locality, because we think they know the local market better. In practice too most, though not all, senior, for example, chief executives are nationals. In some places, e.g., S-E Asia, they almost have to. The same with, e.g., Canada. In other places, e.g. Oman, while the CEO is not Omani, the Finanace Director is an Omani woman. That area was, for years, run by the British. Gradually the British managers were charged with the task of developing local Omani talent. So now, for example, one of the things we ask when assessing our resources is what have you done to develop this talent.
Global managers are a new phenomenon, more prevalent now than 10 or 15 years ago. I think, though, that the requirement to actually live in the country is now less intense than it was than say a few years ago. This doesn’t mean that you can really do the job from outside. Amongst our senior executives there is still a thinking that you will never do it unless you live in the country. But this is dying, due to other societal changes, process. Certainly in the generation after mine the issue is that my wife or husband has a great career here; I like playing Polo, and they don’t have that game in Nigeria, so I am not going. This sort of attitude would be unheard of 10 years ago. You would have just said where is my ticket? Now I think we do expatriation in a smarter way. We have a terrible term called “grass widow”which means that your family can stay in London and you spend one and a half weeks in Hamburg come home and work from home. The women in Shell have complained about this term being sexist.We have been doing this for years; I could do it. I could have said to Shell my wife and children wish to stay in Houston; give me a house here and pay for my visits home, every month. Then I would go back home for a week. Actually we have been doing this for years; for, something like 50 years. When I was back home, I had people working for me on what we call “extended communte” or sometimes “distance commute”. We have a lot of such cases.
The difference though is that now it’s about choice. In the past, I might have gone to the Congo, where the work would have been, and come back to the US to do all my health check ups and so on. Also my family would have been safer back home. Now we choose to commute or move. If my son is in the 10thgrade, we might decide that we are not willing to move him. Cost is not important; the cost is probably around the same. Yes, I have just sent a guy to Hong Kong and what will happen is that he will be based there for 3 weeks and back here for one. We do that a lot.
There used to be no women in expatriation. Although it is difficult to find talented womenwho are willing to be long-term expatriates. There are a few, but not many. Now we recruit a lot; the managerial population is almost 50-50 recruitment, but for societal reasons, they do not stay with it. They will often elect to stay in a geographical boundary. We have a lot of women who will say America or Europe only. But then more and more men would say that. In fact my own profile is at the moment close to a woman’s in Shell: I would have elected to go back after this assignment, because I want to be near ageing parents and I want my children to be Americans.
When I finish this interview, I am going to go three houses down, to say good-bye to a friend of mine in Shell, who has four children. And that is fairly expensive; I have three children, and their education only has been costing Shell £36,000 per annum. If you multiply that by 3 or five years, that is a lot of money.
When I came down here, nobody had a clue how many children I had; no one asked; no one cared. And I think that is very fair. If you have the right talent, that is what matters. The incremental cost of a few children and so on is nothing, especially on significant assignments. Do not get me wrong. Shell is a cheap company. It is Dutch, and it does not waste money. To consider the cost of families would be to be penny-wise and pound-foolish.
The whole privatisation and liberalisation of the Airline industry and technology, the impact has been unbelievable. There is a clear substitution effect, because you do it as projects. I have been doing some projects in Nigeria. Now I’m sure that 15, even 10 years ago, the model would have been to move me there to stay. Now I spent a week there, got a feel for what is going on; understood the issues; and came back to London. I can then video-conference, e-mail, and so on. Also I can send around what I come up with.
I think the impact of technology on expatriation has been two-fold. I think it has been a substitute and an enhancer; both processes have occurred. It very, very clearly enhances an expat assignment in that you do not feel disconnected. Again in the older days, older managers used to be proud. They used to say, “I just disappeared.” But now you have to check in at least once a year. I have to go to the US once a year. In my old job, I used to check British expats, in London, once a year. My own boss it a master at this: in about 30 minutes with the expat he could find out what the challenges had been, in Japan, e.g., how the guy was doing in terms of health, and so on. Finding these things out is part of the networking. Companies need to find out how expats are doing.
A good example is my neighbour in Houston, who was a specialist pump engineer; they would place a camera in some geography at the refinery and a camera in his living room. He would be sitting at home and telling them how to remove a stuck joint. He would diagnose the problem. Yes, you could do it to reviews, for example. We used to go and physically be there. Now we can tele-conference or video-conference. You network a lot; we share files and information. So part of the expatriate management role used to be to gather information by recording and then interpreting it to the locals. Now the young account in the remote geography will see the Chairman’s letter at the same time as everyone else. So we have had a long-term decline in expatriation. Not because of policy, but due to technology, and individual choice arising from societal change. The reduction is something like 15000 to 5000 over the years. Most of it is technology.
You see, we have already been in China and that is the difference. We have been there for 75 years. We are so far ahead.We have had to be. If you read about the globalisation of business, the example that is always given is the oil industry. You have had to go after and with oil for over a hundred years. We started over 100 years ago in the Far East. The oil cartel started expatriation. We have actually written books on it. Shell wives, who keep journals, write the most popular books and then after a few years they write books. The Shell spouses are amongst the oldest networks. We have an expat web page, an expat magazine, and so on.
I think, finally, that expatriation will go down. I think that in some industries the cost issue will be a factor. In our industry it is not, because labour costs are very small. For us the issue of me versus a national is nothing, when we spent a few billions per year in countries. If you were running a McDonald franchise, the difference between a national in Hong Kong and an American in Hong Kong would be significant. Also I am a great believer in technology, and also importantly my kids’ generation will be very different. They are independent about what they want and insubserviant. If they do not want to go to China, they will not go to China. I think these societal changes are positive.It is not like my agreement with Shell or anybody else, based on a patronising employee-employer relationship – it will be much more adult to adult.
Does Shell really mean Hell? Feel free to decide.