Hugh Mitchell was appointed HR director of Shell in 2005 and in 2007 joined the oil company’s Executive Committee. He joined the HR division at Shell Exploration & Production in Aberdeen a few months after graduating from Edinburgh University and held a variety of HR and business roles across the UK and Brunei, including HR VP for the Global Oil Products business, before his promotion to HR director. Hugh is a Foundation Board member of IMD business school in Switzerland and was appointed a Fellow of the National Academy of Human Resources in the USA in 2009.
Hugh will be appearing at the HR Directors Business Summit on February 3 – 4 in Birmingham, UK.
1) You’re on the Board for the Centre for Advanced Human Resources at Cornell University – what kind of topics are industry and academia collaborating on and grappling with at the moment?
Close cooperation between academia and practicing HR is critical for the development of the Function. Research and collaboration happens at a number of levels, from measuring the impact of specific HR interventions on issues such as performance management and diversity & inclusion, to more forward-looking projects considering the future shape of HR, business organisation design, and how to leverage social media. These forward-looking studies seek to assess the impact of wider societal and technology trends on business.
2) In the past you’ve said that getting things done is about seeing your position as one of influence rather than power. How does that manifest in day-to-day activities?
The start point for being effective in your HR role is to ensure that the key activities you are accountable for are executed to the highest levels of effectiveness and efficiency. Basically you have to run a “good shop”. Thereafter it is about being an integral part of the Company’s strategic thinking and proactively bringing your perspectives to the table, drawing on the professionalism you hold within your team. You participate on the same basis as any other member of the leadership team. I have never bought into the “service provider” model, we are all just one integrated team.
3) The size and scale of your projects require complex chains of human capital organised in the right way. What is Shell’s strategy with regard to workforce planning and how do you ensure you optimise over time?
Having the right skills and experience available at the right time is a key part of the business model in Shell. Relative to the financial size of the company, we are not a huge employer so ensuring we have a sustainable supply of talent is critical. The nature of our projects, capital spending, and long term relationship building requires us to operate long-term planning cycles.
Workforce planning is an integral part of that where we model out demand for skills over time. The cyclical and volatile nature of our business is such that modelling and planning only gets you so far. It has to be reinforced by strong belief systems around how you resource your business. In Shell we sustain our graduate recruitment throughout the business cycle, not allowing them to be adjusted by short-term pressures.
We also make conscious choices about what activities are core to ourselves, what can be offshored or outsourced, and how do we organise ourselves to best leverage scarce and highly experienced skills.
4) You’ve used the term ‘functional accountability’ in the past to describe the hard-wire chain of responsibilities at Shell – can you elaborate on this and why it drives performance?
All organisation models have pros and cons. What is key is that the model you are operating is explicit, consistently applied, and unintended consequences are identified and mitigated. In Shell we are effectively organised by capability. That means all the retailers are together, all the refiners, all the explorers, all the project engineers, all accountants, and indeed all HR staff in one organisation accountable to a clear leader.
That model of functional accountability allows us to drive professionalism, to deploy skills effectively, and get maximum efficiency. The challenge is ensuring these capabilities are effectively harnessed to deliver the bottom line today and drive future value.
5) Many companies are now talking about connecting HR and people performance with key business objectives but Shell seems to be way ahead of the curve here – why? Has this been a necessity?
HR has a wealth of data that it does not always harness effectively to inform business thinking. We all know that highly engaged employees have a better safety performance, are more resilient, and have higher productivity. We bring the data to prove that, such that the conversation on performance management moves from re-designing reward and recognition structures to how to raise engagement levels.
We are fortunate in Shell to have extensive people data and commonly applied systems globally. This enables powerful data analytics when integrated with business data. While we have made good progress, there is a lot more scope.
6) You’ve said in a previous interview that HR needs to ask if the business is in tune with society – why do you feel this should sit with the HR function rather than, for example, operations? Is there a danger of ethical questions being raised after the horse has bolted?
In our organisation we typically span at least three generations. We have employees from over 100 different countries with every element of diversity in our workforce from gender to race and religion. All these people represent the societies they are part of and with which our business interacts. To make our global organisation effective, we need to be tuned into the history, challenges, expectations, and aspirations of society. To do this we need to be externally focused, curious about world affairs, and obsessed with engaging internally and externally.
Only by doing that can we ensure our people management is relevant and enabling. This is not just the job of HR, it is a requirement for all parts of the Company.
7) If graduates are more attracted to Shell as an opportunity to ‘change the system from within,’ what procedures and initiatives are in place to allow more junior employees to influence strategic direction?
This is an area more impacted by values and culture than procedure and initiative. Certain interventions do help such as graduate development programmes with built in feedback loops, early leadership programmes, networks, skip-level engagements by senior leaders, blogs etc. However the most meaningful impact is if there is a culture of inviting input and comment, of enabling challenge and the ability to speak up, and of transparency and high engagement on company direction, strategic imperatives, and unit levels plans.
The majority of Shell leaders have been developed through the company from graduate entry. This brings a commitment to invest and engage with those who are travelling a path most of us have also travelled. The second area is creating a continuous improvement culture which recognises, and supports with structure and processes, that most improvement opportunities are identified at the most immediate level and commitment to change is greatest when the ideas have been generated by those most impacted.
Creating this type of engaged culture requires consistent and substantial leadership investment.
If you’d like to hear more from Hugh, he will be appearing at the HR Directors Business Summit on February 3 – 4 in Birmingham, UK.