How NOC leaders can shake up the culture of their organisations and become much more competitive

This morning I’m reflecting on the issue of creating competitive organisations, and in particular how the leaders of NOCs can shake up their organisations to create much more competitive, leaner, profitable organisations to the benefit of their customer, their people and their shareholders.

It seems to me that this issue is important because NOCs own such a large share of the world’s hydrocarbon resources, and the people of their countries so desperately need and deserve the benefits that accrue from an efficiently-run organisation. At the same time is seems that this is perhaps the biggest single challenge facing the new leader of a NOC. Often National Oil Companies culture is closer to that of a state ministry than a small independent driller. Yet if this could be achieved, more energy would be produced at less cost, the local fiscus would benefit, local suppliers would benefit, the world’s energy consumers would benefit.

I note with great interest an interview that Ed Crooks of the FT conducted with (then new) Shell CEO Peter Voser. He felt that the size of the corporate head office in the Hague was too big and was slowing things down, he wanted to push a lot of the decision making and accountability down to the business lines. He reduced the number of exco meetings from two or three a month to one a month.

The challenge of course is to do this while taking into account the positive elements of your corporate culture and ‘DNA’.

Interesting then that just two days ago it was reported (also in the FT) that in his first interview, new ConocoPhillips CEO Ryan Lance said he wanted to shake up the culture and take on the dynamism of smaller exploration and production companies. The article cites Mr Lance as saying that “Getting the management and all our people focused on where we’re going and what we’re doing as a pure play E&P company, without all the other distractions that come with an integrated company, will create a step change in performance.”

Surely there’s a great opportunity here for NOC leaders to shake up their culture and create more efficient and competitive businesses. Naturally this is not easy, but it’s got to be important.

In fact my colleague Terence O’Dwyer is currently in discussions with Shell as we’re hoping that Peter Voser will tackle just this topic at the 2013 edition of the World National Oil Companies Congress as we feel that there’s much to be learned from his experience.