A strong culture defines the inner workings of Shell enabling people to move to another country and work seamlessly
Irshad Lawati, managing director, Shell Oman Marketing Company, seems to have an abbreviation for every expression - EVP stands for Employee Value Proposition, CVP for Customer Value Proposition and DNI for Diversity in New Initiatives. Point this out and he chuckles, "This is what they do to you at Shell; it's called indoctrination into the company's mould." Having spent 14 years with Shell and Shell Oman Marketing Company (SOMC), Lawati is a dyed-in-the-wool Shell employee. And the experience has left an imprint on his outlook. "It adds a different flavour. It has probably made me a forward-thinking person."
Speaking about forward thinking, it is precisely this approach that underlines SOMC's success in Oman. The company recorded its highest-ever net profit of RO8.9mn in 2006, a 20 per cent rise over 2005. Its turnover was up by over 23 per cent to RO226.5mn. The retail business contributes 55 per cent of the company's turnover, but to measure the significance of this in numbers will be wrong. Oman is also the only country in the region where the company has retailing operations, the closest country where Shell has a retailing operation being Pakistan.
Retailing driven
Its 123 retail outlets in Oman do an annual average throughput of 9mn litres of bulk oil per annum. "This is probably double that of our nearest competitor," says Lawati. That's not all; its Al Sarooj outlet is among the top five Shell outlets in the world in terms of throughput of oil. The success of its outlets is the result of a meticulous planning process. It all begins with location. The effort is not merely to pick a new location but to zero in on a site which will have impact. A detailed mapping of various areas is carried out to arrive at preferred market areas (PMA). A number of geographic information-based tools are then used to estimate traffic counts, the reach of the nearest pump and a site potential. Once the site is decided, SOMC helps a franchisee design the outlet with the best service elements. The approach is uniquely Shell. Says Lawati, "We follow a CVP which helps to bring in all the elements that are important for a customer."
No half measures
The 360-degree approach holds true for everything that is done at Shell. There seems to be little scope for half measures in a company which attaches a premium on its brand image. There are certain values, including sustainable development, health, safety, security and environment (HSSE), ethics and compliance of rules and regulations, which are non- negotiable at Shell. In 2006, SOMC worked 952 days free of any lost time injuries, the best record achieved in the history of the business.
The culture and nature of the company fosters a decentralised managerial style within the organisation. The company works with the help of a number of teams with specialisations in oil and gas, petrochemical, retailing et al. Making various specialised teams work as a homogeneous unit calls for a certain kind of managerial acumen. "The challenge is to empower people lower down in the organisation with the right tools and perspective. The overall effort being to combine a quality orientation with skills and competency."
Lawati continues, "The stress on these values is important as Shell as an organisation has thousands of people and hundreds of companies." Shell as a global group of energy and petrochemical companies has operations in more than 130 countries and territories, and employs over 108,000 people worldwide.
These values have helped to foster a Shell culture which enables people working in one part of the company to move to another country and continue working seamlessly - the overall values within Shell remain the same.
As a result, whenever there is a vacancy within the organisation, the vacancy is advertised on the company's intranet, giving interested employees a chance to apply. For example, Lawati, who served in Malaysia from 2001-2003 looking after strategy and business development in new markets like Vietnam, Indonesia and parts of China, applied for the job of managing director, SOMC, when the job came up. Approaching the end of his tenure in Oman, Lawati was on the lookout for a new opportunity, when the job as deputy country chair, Shell Abu Dhabi, was advertised on the company's intranet. Lawati applied and was selected.
Unlike Oman, where SOMC is only concerned with downstream activities, in Abu Dhabi, Shell has an exploration and production business. It is also focused on gas. Excited about his new assignment, Lawati says, "I see this as a bigger challenge and hope to provide value. My friends and family are here, so I will always have an association with Oman."
Shell has had a presence in the sultanate since 1959. In 1997, the company became a publicly listed company and divested 51 per cent of its share to the public. This converted SOMC into a wholly owned Omani company - Shell's stake in the company went down to 49 per cent. Shell also has a 34 per cent stake in Petroleum Development Oman (PDO). Shell shares its expertise with PDO as and when needed. John Malcolm, managing director, PDO, is a Shell employee who has been loaned to PDO. Shell also has a stake in Oman LNG.
Over the years
Irshad Lawati
1979
Studied electrical engineering in Germany
1982
Joined the Ministry of Commerce and Industry
1988-1991
Worked with the Ministry of Defence
1991-1997
Worked with Shell
1997-1999
Joined an entrepreneur on generating new ideas for projects
1999
Returned to Shell Oman Marketing Company
2001
Looked after Shell's entry strategy into new markets in Malaysia
2003-2007
Managing director, SOMC
September 2007
Deputy country chair, Shell Abu Dhabi
By Mayank Singh
© businesstoday 2007
