Heidrick & Struggles has released a white paper which details the leadership traits that Energy sector CEOs need to led effectively during the unique pressures of the industry that are currently being experienced. Les Csorba, Partner In Charge and author of the white paper, ‘Crude Collapse: Crisis AND Opportunity’ said, “given the wildly cyclical nature to the sector, energy CEOs must push for immediate innovation and performance, while addressing longer term issues and opportunities in the industry. Companies that rigorously invest in the development of their leaders will not only be creating opportunity from the latest energy crisis but also gain a competitive market advantage.”
Csorba also highlights five leadership skills that are particularly relevant to energy CEOs, applying learnings from the global research study, ‘The CEO Report’, which was also released by Heidrick & Struggles, along with Said Business School at Oxford University.
Speed, scope, significance
The report has pointed out that even before the collapse in crude oil prices, a new generation of leaders was redoubling the focus on operations and underlying fundamentals to be in a position to address the full implications of the changes that lay ahead. The CEOs of Apache Corporation, Chesapeake Energy and BP US Onshore are offered as examples as all three represent a distinct departure from the stereotypical swashbuckling oil and gas executive whose free spending and large bets on assets risked placing the business in a precarious position as the next downturn approached. Doug Lawler became CEO of Chesapeake in June 2013 and instilled a returns centric culture focused on capital efficiency and balance sheet flexibility.
The paper quotes one CEO as saying “if you haven’t got your antennae out…you’re going to struggle to see opportunities and threats which may blindside you.” This skill is particularly relevant for oil and gas leaders, who will need to develop the ability to discern and connect events, anticipate distant threats, and detect promising opportunities.
The power of doubt
The paper highlights that an oil and gas CEO with one of the healthiest balance sheets among all large independents has carefully cultivated the power of doubt by inviting a range of voices to the table. By routinely listening to a broader range of viewpoints, the company has created a more disciplined planning process to consider more timely and accretive opportunities down the road.
Oil and gas leaders are under a great deal of pressure to adapt, but they must do so in an authentic way, modelling integrity, showing respect for others, and building trust. Therefore, executives must move with speed to achieve operational efficiencies while resisting the tendency to cut corners and sacrifice essential values such as health, safety, or environmental performance.
Continuous learning mindset
The white paper points out that the mindset of continuous learning must be not only developed by the CEO but also instilled and championed throughout the organisation. Leaders should believe that change is the oxygen of growth and creativity to nurture a talent pipeline. Continual investment in training can build a sustainable business, create a high performance culture, and increase retention. Take for example, Noble Energy, a global independent oil and gas company, which started investing in executive assessment and coaching plans years ahead of the recent downturn. Led by Noble’s former chairman and CEO Chuck Davidson, a 40 plus year industry veteran who has seen his share of downturns, the company created sustained development, coaching, and succession plans for every major business function. These efforts helped equip the company with the leadership and bench strength to manage in a world of complexity and uncertainty.
Edited from press release by Claira Lloyd