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Peter Voser’s message to Shell staff presages a gloomy future for all of Shell’s employees and stakeholders

Posted on May 28th, 2009

Shell’s CEO designate Peter Voser would have to have been terminally naïve to assume that his extraordinary internal Email to staff would not immediately be placed in the public domain – as indeed it was within minutes of its transmission. Assuming that Voser knew exactly what he is doing let’s analyse what this message means for Shell’s battered stakeholders.

The fact that Voser chose to send out the Email when there is a still a month to go before he takes over as CEO is remarkable – and crassly insensitive to the feelings of the current man in charge Jeroen van der Veer. Van der Veer will no doubt also be aggrieved that the tone of the Email is so fiercely critical of the Shell of today – a Shell that has been moulded over the past six years by his efforts. Outside stakeholders will also want to ask why, if things at Shell are quite so bad as Voser says, van der Veer has been remunerated to the extent of around 10million Euros a year, why he is to receive a pension of well over one million Euros a year and why his contract with Shell was extended well beyond the normal Shell retirement age of 60.

Voser’s criticisms of the Shell that he inherits (and the Shell, let us not forget, of which he has been a senior executive director for many years) are scathing. Shell is no longer “… a company of firsts”. Shell is “organisationally too complex”. Shell’s culture is “too consensus-oriented”.  Shell needs to “regain our leadership position”. Shell needs a “greater focus on how we interact with resource holders and how we run our projects”. Shell needs to “increase accountability”, “speed up getting upstream projects on-stream, and improve project execution”, “change our approach from internal to external, raise our game in stakeholder management and better address non-technical risks”, “reduce corporate weight”, … and so on (and on!).

The goal of the organisational and cultural changes that Voser’s “transformation” predicates is hard to elicit from the Email  – quite what “a company that accelerates its ongoing top quartile plans” means I’ll have to leave it to a Shell insider to explain. Indeed all the objectives in Voser’s Email are eerily reminiscent of previous “transformations” – weasel words that mean little in concrete terms – other than the inevitability of staff reductions. “Here we go again” Shell veterans and survivors will no doubt cry. Underlying Voser’s decision to wash what he seems to see as Shell’s very grimy linen in public is his clear determination further to centralise decision-making. He wants less not more consensus and simplicity not complexity – this is barely disguised code for pulling all key decision-making back to the centre. 

Voser’s Email is an internal document and it will no doubt be the first of many such communications that are designed to stamp his personal authority on a corporation which he clearly believes is grossly dysfunctional and under-performing. Many of us would agree about the dysfunctionality – but not for the reasons that Mr Voser describes. Over the past years – in the era of Watts and van der Veer – it is Shell’s impact upon its external stakeholders which has been most open to criticism not so much its internal machinations. The health, safety and environmental record of the corporation has been abysmal – but HSE doesn’t get a mention in Voser’s 924 word message.   Shell’s brand has been damaged perhaps almost beyond repair – but the brand doesn’t get a mention either. Shell’s reputation in the outside world has been undermined by its cataclysmic errors of judgement in such projects as Sakhalin and Corrib, and in Canada and in Nigeria but Voser’s references to the need to restore this reputation are passing at best. Shell’s external communications have been the most disingenuous of any of the greenwashing oil majors – but there is no apology for these lies and obfuscations of the recent past and no plan as to how the recognised need for “improved relationships” with key stakeholders will be achieved. Shell’s directors have recently been revealed to be the fattest of fat cats but Voser seems oblivious of the paradox that over years when he clearly believes that the corporation has been grossly mismanaged Shell’s directors have paid themselves more and more!

From shareholders to employees and from suppliers to pensioners – and in local communities from Ogoni-land to County Mayo Shell has almost contemptuously damaged its standing in recent times sometimes by neglect but more often by the errors of its decision-making. Many will feel that this damage has been done because of ever more centralised management and ever more cost control obsessiveness. The failure to stop flaring in Nigeria was not because it could not technically be done – it was because the money was not made available – just one example amongst many. But the causes of this damaged reputation  – centralisation and cost minimisation obsessions – are the very tools that Peter Voser now wants to use to “transform” the business under his hegemony.  The future looks very bleak for us all.

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