THE TIMES (UK): Shell chops job change policy: “The generalist-to-specialist move is intended to foster radical cultural change at the embattled oil group, which this year had to cut its proven oil reserves by about a third.” (ShellNews.net) 5 Dec 04
December 05, 2004
SHELL is to scrap its controversial “gifted amateur” management promotion system under which top executives switched jobs every three years. Instead they will stay five years or more in one role.
The generalist-to-specialist move is intended to foster radical cultural change at the embattled oil group, which this year had to cut its proven oil reserves by about a third.
“We want specialists, prepared to stay in places like Nigeria for several years, getting to know the local community and business practices. The chopping and changing has to stop,” said an insider.
Shell announced plans in October to unify its Dutch and English boards. But last month it had to delay its annual meeting, where shareholders are to vote on the proposals, leading to concerns among investors that it may have to announce further cuts in reserves.
Jeroen van der Veer, chief executive, raised the idea of lifting the three-year job rule in May and is pressing ahead with plans to abolish the time limit on job tenancy. Since the early 1990s, senior management overseas were regularly moved — particularly in the toughest areas of operations.
This caused problems in handing over projects from managers and delaying other assignments in the transition.
Until the three-year limit system evolved in the 1990s Shell was dominated by a group of executives known as the “peetvaders” — Dutch for godfathers. They groomed promising staff for top jobs by sending them to Shell’s more demanding locations, such as Nigeria, before calling them back to headquarters. This changed under the former chairman Cor Herkstroeter, who allowed staff to apply for positions of their choice within the company.
As a result, some of the most demanding of Shell’s operations were no longer able to rely on the quality of staff to lead them.
Herkstroeter also introduced a system of bonuses to bring pay in line with performance. Some analysts suggest that this encouraged short-term maneouvres to boost results.