Do Not Turn the Rainbow Gray is the first in a series of insightful articles looking at the changing face of the Global Oil & Gas Industry. This first article by one of our training consultants Paul Keighley looks at the importance of culturally intelligent leadership within today's global workforce.
Do you remember at school when you had finished creating a masterpiece painting for your family you sometimes use the paint left over and mixed all the colours' together ending up with either a dull grey or dull brown....?
Since graduating in 1971 I've been involved in the Oil & Gas business. I have moved through my career to senior management positions in oil and gas companies and since 2006 become a management consultant helping with leadership, communication and negotiation programmes.
There have been so many changes since then be they related to technology, science, information technology, communication, global reach, cultural and many other areas. One of these major changes is the industries workforce and how we view the cultural diversity of our global colleagues.
In the 1970's if you visited British Petroleum (BP), you would find that the vast majority of personnel would be British. If you visited Shell they would be Dutch or British. Exxon American, Chevron American, Total and Elf French. Today each of these companies will have just about representatives from every nation in the World on their staff.
The reason for this is partly because the companies have a global presence, partly because it is more cost effective to employ local people in the countries in which you conduct business, the quality of education, and also the contractual requirement of governments in many countries to maximize the employment of local people.
Also the industry has seen mergers of companies for example BP and Amoco and Arco, (one British and two American companies), Exxon and Mobil (two American), Total, Fina and Elf (two French and one Belgian), Chevron Texaco etc. etc.. The driving forces behind these mergers are of course, attempting to reduce costs, improving performance and thereby shareholder return, putting it crudely instead of 1+1 =2, with a merger 1+1=3!
Apart from numbers and profits these mergers involve people, and people in different companies have become used to the culture of that company, and with a merger one of the merging company's culture will dominate. With ExxonMobil it has been Exxon's, with BP, Amoco and Arco it is BP's.
We have also seen the emergence of China as a global power and Russia joining the international oil and gas arena. Chinese major oil companies have acquired, and continue to acquire, companies for other nations, for example Chinese National Oil Company's acquisition of the Canadian company Nexen. In this case a Canadian management needs to adjust to a centrally controlled Beijing based company which will be difficult when typical Canadian oil and gas companies have to fast on their feet!
With all these mergers and acquisitions, oil reserves and profitability, linked to shareholder return are the drivers, I agree somewhat different in China where reserves acquisition is priority.
We have seen the same in the service contractors side, for example Schlumberger, (again in the 1970's staffed with mainly French, British and American) has made several acquisition in the past decade with recent acquisition being Smith Industries, who themselves had acquired several other companies over the years. Weatherford, Halliburton and Transworld are others, the list goes on and on, with thousands of staff most nations are represented.
Additionally we partner with companies from other nations, either to share risk, gain entry to a market which otherwise may be difficult to enter, China and Russia come to mind here.
I have during my career as a senior manager in the industry and latterly as a management training consultant, had the opportunity to visit or lived in over half the countries in the World either managing and leading staff, to hold meetings with oil companies and or governments, held negotiations and undertake training assignments.
It has therefore given me the opportunity to work closely with people of many differing nationalities and backgrounds and it has made me appreciate first-hand the complexity and challenges that one can face when dealing with people of a differing culture to one's own. It also makes you realise that you must develop a sensitivity and understanding of how to motivate and also how to work with multi-cultural teams.
In my last post as General Manager of an oil company in the Middle East we had staff from over 15 nationalities in the same office! When dealing with people of other nations, it is no longer the adage "speak to people as you would like to be spoken to yourself" BUT "speak to people how they would like to be spoken too" This is bringing the multicultural nature of international business and the key to success is motivation because you are trying to look at issues from their eyes on a cultural basis.
Let me give a simple, though important example. In many countries of the world, not so much in the Western world, the status of the most senior member of a family is sacrosanct. In other words you will always obey the head of the family come what may. I can imagine any reader from say the UK thinking, well if I disagree with my Grandfather (who, let's say is the most senior member of your family) I am not going to do what he tells me! In other countries they will obey even if it is hurting them and they do not agree, they will not argue. Now put this in a business sense, many nationalities look up to you as the company head as not just the leader but the Grandfather figure and will respect you for that and do what you say without argument or giving their point of view. Now from a western company perspective this is exactly what you do not want, you want all people's views on a subject in which they are involved, not just accepting your decision without discussion. This is why an international manager must find ways and develop an atmosphere where staff members will give their views. Sounds simple but believe me unless you really start to think about such matters you will end up with low performing staff, leading to demotivation and in the end falling profitability.
Let's look at this from a negotiation stand point;
In this industry we have many partnerships with other oil companies and/or government that last for many years, I know of one contract with a government that had a 40 year term. In such negotiations needless to say all parties must be satisfied with the outcome or the results will not achieve the objective of working together- obvious isn't it!
In entering a negotiation not only do you need to know your required outcomes but also how the other party or parties are likely to negotiate from a cultural perspective.
As an example, you are negotiating with a Japanese oil company and more than likely their team will all be Japanese. You are North American and used to conducting negotiations at a pace which is far greater than the Japanese, so if you try to hurry matters and push your, hopefully long term partnership you will end up with a disaster. Japanese like to take their time and get to know you and build relationships of trust before finalizing a deal. North American culture on the other hand is let's get to the deal and then we can develop a relationship later. This leads to a cultural collision. In many parts of the world, including Japan, the loss of "face" is critical, such a loss will destroy a relationship and delay or terminate a negotiation
with disastrous consequences for both parties and you personally if leading the negotiation.
Japanese are quiet people and take time to absorb what you are saying and give you respect by trying to fully understand everything you say. This can be frustrating if you want to push ahead in a typical North American manner.
Another simple point here, you as a North American ask your Japanese counterpart "what do you think of my proposal?" There is then silence, you think they did not hear and repeat because you expect an immediate answer, that is the thoughts of the Japanese counterpart. They then look shocked and do not understand why you have repeated the statement and may be if you are not careful show you are irritated!
They, you do not realise, are thinking about how to respond. You asked them to think about it and thinking is conducted silently and they are showing you respect by thinking before answering! A simple example but can lead to all sorts of problems.
In many countries silence does not create a difficult atmosphere in others it does, imagine an Italian family sitting at a dinner table it total silence......
Indonesian, Finns to name but two nations enjoy silence and are comfortable with it. By the way silence can be a very powerful tool in a negotiation.
Turning to communication....
Again not rocket science, but my goodness how we get it wrong time and time again!
Firstly think about what you are going to say before you say it, not after.....
Remember that only 8% of the World's population has English as their first language and in the Oil and Gas industry, as in many others, English frequently is the language that is used. So if you are a native English speaker talking to people whose first language is not English then you must adjust you style and words accordingly. Time and again I see and hear people speaking who are not paying attention to the audience be it one person or many. Lose the audience and you might as well stop, and again you will not get the results you wish to achieve, be it getting someone to do something for you or giving information. The result demotivation.....If giving a presentation to people of another nationality you may need to think whether you are the best person to give the presentation, or is there someone as capable in your organization of the same culture as the audience who get could the points across in a more meaningful manner.
Keep it splendidly simple "KISS".....motivation is key to leadership and how to motivate and not demotivate people of different nationality to your own is critical.
Explain in a simple manner remember their command of English may not be as good as your, take time. In may instances you are delegation a task and you only want it undertaken once and in accordance with the outcomes needed, You do not want "oh I assumed you wanted it like this...."
Time management, here I am thinking of the concept of time depending on the culture of the person, ask a German to give you a piece of work finished by a particular time, they are more than likely to do so, assuming you have delegated the project correctly. If it is someone from the Middle East, bear in mind there concept of time can be different from yours! The art of delegation is a critical competence of any manager but how often do we fail. Now add in the multi-cultural element as it becomes increasingly difficult unless you recognize that different nationalities view things differently.
I had an example of the multi-cultural nature of delegating to a team of two recently. A senior Chinese Engineer was asked to work with a junior North American Engineer (Joe for arguments sake) on a project of great importance to the company concerned. After a few days the Chinese Senior Engineer came to his boss and said "I cannot work with Joe he does not show me any respect" Joe then came to the boss and said "I cannot work with him , he does not tell me anything and when I try to chat in a friendly manner he gets offended"
I have tried to give just a flavor of the complexity of managing and working in a multicultural environment, many studies have been carried out by learned organization to show that on many occasions international mergers fail due to cultural issues and many international managers state that dealing with multi-cultural issues is the most difficult part of their job.
Mergers, partnerships, acquisitions sound easy on paper in meeting corporate objectives, improved profitability, reduced administration costs, access to new markets, acquisitions of oil and gas reserves, however the integration of people into an organization with differing business/company culture or country culture is a very complex matter and from my observation in conducting training seminars it is apparent that not enough time is spent by organizations in dealing with this matter.
If staff are not motivated then demotivation results and profitability falls and the objects of the merger etc. fail.
Back to my original statement, we all view the world differently and all bring different colours and perspectives to anorganisation. As a senior manager it is essential that colour and differences in perspective is maintained to motivate people NOT turn them all into a GREY amorphous mess. In the end you will lose staff and the mergers, partnership, acquisition will fail. Let's keep the ‘Grey' out of the rainbow.....
By Paul Keighley B.Sc., C.Eng., F.I.M.M.M.