I would like to begin by acknowledging the traditional owners of the land on which we meet − the Whadjuk people of the Noongar nation and to pay my respects to their elders both past, present and future.
I’d also like to acknowledge Minister Bill Johnston, Minister for Mines and Petroleum, Energy and Industrial Relations.
Liza Harvey, Shadow Minister for transport, planning, lands and deputy leader of the opposition.
Distinguished guests, ladies and gentlemen.
This morning, let me begin by asking you to think back to a time when you performed at your best, when you felt in-flow, things were seemingly easy.
Now think of a time where a situation brought out the worst of you, it could be in your job, on the sporting field or in the classroom.
Each of you will have different answers.
But I’m willing to suggest that, amongst all of us here, those situations that brought out our best had a lot of things in common.
I bet they were rewarding, despite the challenges.
I bet they were fun, despite the hard work.
I bet they gave you a sense of accomplishment, despite the setbacks.
Perhaps the worst jobs were ones where you felt you weren’t valued, you didn’t have a lot of choice or discretion and you felt stressed and overloaded.
So why is it that some environments bring out the best in us while others don’t?
This morning I’d like to explore an essential facet of being in business today:
How do you create an environment in your organisation that brings out everyone’s best?
Whether it be your employees, the customer experience or interactions with the communities or governments we engage with.
Put differently, how do you establish a healthy culture – I personally like using the words of Professor Sumantra Ghoshal he describes this as “The Smell of the Place”.
Do your employees feel like they are working in Calcutta in the summer time – you can imagine the oppressive heat and humidity – which he described as making him feel tired and lazy…
…Or does it feel like Fountainbleau forest in France in the springtime, with the cool refreshing air gently blowing across your face, which makes him feel energised?
Is your workplace like Calcutta or Fountainbleau?
As Professor Ghoshal puts it: “changing people’s behavior is often not about changing people, but changing the context which they are in: the smell of the place”.
So today I want to explore what I think are three critical aspects to setting culture:
Firstly, finding meaning and inspiration. Helping your organisation understand WHY what they do matters.
Secondly, setting goals and the tone from the top. Balancing the WHAT with the HOW.
And thirdly, developing trust. Bringing it all together.
I’d like to spend a little time on each, as I believe these factors build trust within and outside our organisations.
Let me start with finding meaning and inspiration.
For each of us, we have our own set of factors that motivate us to work.
For some it is about personal learning and career development.
For some it is about building a better product or delivering a superior service.
For some its about communities and nation building.
Whilst for others it is about making a difference in the world.
We all seek meaning in what we do, we want to feel connected to those around us and find purpose in the common cause.
Whatever the initial motivation that draws people to an organisation, leaders must be able to align those around them so everyone is pulling in the same direction around a common purpose.
Once upon a time, this deep purpose of an organisation used to be constrained to the board room and senior executives.
Now, I see one of my critical functions in leading Shell Australia is to share our strategic ambition in a way that resonates with the hearts and minds both inside and outside our organisation.
Our mission is to provide more and cleaner energy to the world.
We seek to answer the question … “ how do we alleviate the energy poverty of one billion people, provide them with access to the basic services we take for granted – like refrigeration for their food and internet access for their education – all in a carbon-constrained environment?”
What our customers care about is how we enable modern life – energy to help people drive their kids to school, heat their homes or power their businesses.
And what communities care about is the shared value we bring – jobs for young people, investments in education and infrastructure we share with the community.
This is what gets me out of bed in the morning!
As a further example let me bring this back closer to home, to our employees, for a moment.
Talking about creating the right culture – paramount in heavy industry is how we protect the safety and well being of our employees, communities and environment.
We use safety as another guiding light that orientates our organisation and reinforces how we want people to behave.
We do this for three reasons;
- Firstly, because the risks of not managing safety risks can be devastating and catastrophic.
- Secondly, it’s easy to rally our organisation behind why safety matters – it’s about protecting their own personal health, protecting their colleagues, protecting their family and friends.
- Thirdly, the behaviours to drive strong safety are identical to those required to deliver a successful business – whether it be ethics, performance, innovation, or people.
Put simply it comes down to care and wellbeing.
As a short sidebar, I should call out that caring is not only about displaying empathy, coaching and support but can also be holding people to account.
An important alternate dimension to caring which sometimes gets avoided can also be the act of intervening − to call something out, to identify what needs to change − not because it is easy but because not doing so would create an acceptance of the behaviour which could put people in danger.
Sometimes it can be the case that an individual was simply unaware of the risk.
But to the person who knowingly took shortcuts and “got away with it”, it moves their goal posts on what is acceptable.
The consequences of not intervening can be interpreted as silent endorsement, which ultimately contaminates the culture like a disease.
But when we get this right and we balance the right amount of care with compliance, support with accountability, trust with verification, we can create a culture that is sustainable.
It’s an environment where people are alert to risks, they speak up when things don’t seem right and they are empowered to take the initiative to act.
So, after finding meaning, the second critical aspect of setting the right culture is setting goals and the right tone from the top.
This is the combination of not just articulating WHAT, you want but providing equal clarity on HOW you expect this to be done – the behaviours.
As business people we are used to developing strategy.
As business people we are used to driving goals.
As business people we are good at delivering results.
We are often so good at articulating the WHAT, that our lack of focus on HOW gets misinterpreted as being less important. Leading some to the conclusion that cutting corners to deliver performance may be ok. Before we go there let’s talk about goals for a moment.
One of the things we do which speaks volumes on our tone is how we set goals.
As business people, we are used to setting ambitious goals for our companies, or as noted by American author Jim Collins who calls them: “big, hairy, audacious goals”. B-HAG’s.
And that’s understandable: as humans we perform better when we try and stretch ourselves − a bit of discomfort keeps us motivated, learning and improving.
I like to call it the Jane Fonda coaching moment where you “feel the burn” as you do your yoga stretches, allowing you to lean in and be more flexible.
But importantly you don’t want to stretch so far that you do yourself an injury.
Indeed, I think the same can happen in business.
If we are not careful, the stretch and ambition to drive healthy performance from the top of the company can be received by the frontline employee as onerous.
The stretch needs to be linked to a set of values that invites and inspires us to get the most out of ourselves.
The recent Hayne Royal Commission is a handbook about the importance of leaders setting the right corporate culture….and the perils of failing to do so.
Commissioner Hayne dedicates an entire chapter to exploring the impact of culture on business conduct. He describes it simply as “what people do when no‑one is watching”.
In Shell we use the same guidance – how do we act when we think no one is watching, because as we know, everyone is always watching.
Commissioner Hayne warns a culture that fosters poor leadership, poor decision-making or poor behaviour will ultimately undermine the business’s governance.
Commissioner Hayne goes on to say:
“…It is rightly said that the ‘tone’ of the entity is, and must be, set at the top. But that tone must also be echoed from the bottom and reinforced at every level of the entity’s management and supervision; it must always ‘sound from above’.”
This is an incredibly important point: set at the top, reinforced at every level and echoed from the bottom.
To get this right, in my view, you need as many formal systems to check on the behaviours throughout your organisation as you do to track costs or revenue metrics.
In Shell, we have many ways of checking our organisational health.
We conduct a formal, worldwide survey of staff to understand how our business is tracking from a staff engagement point of view and it is incredibly detailed.
It is a mammoth undertaking, but the results tell us whether as leaders we are running a company that…
…allows people to speak their mind …
…is free from harassment and bullying …
…goes the extra step to put safety first.
It is a delicate balance, the tussle between control and freedom: the primary role of management should be to help the employees succeed by giving support and guidance.
So if finding meaning and inspiration at work, and goal setting and the tone at the top are essentials, the third critical aspect of culture setting, I would suggest, is to develop trust.
Trust is finding the right balance in pulling all the threads together.
Motivation… Performance … behaviours and to do this in such a repeatable way that everyone knows what to expect from your company.
But there is one last but very important element to note.
Society’s expectations of business, government, education and broader institutions is rapidly evolving and escalating.
The greatest challenge comes not only in how we act today, but in acting today in a way that society will judge us in decades to come.
This is something we spend a lot of time thinking about at Shell, to ensure our performance is delivered in a way that protects the reputation and brand
of which we are the custodians.
Building a culture that moves with the evolving expectations of our stakeholders and the community.
In the resources industry, we carry expectations of investors, shareholders and customers.
We have board and staff expectations.
We have regulators, media and the populace watching our every move.
We have tensions between risk and return; innovation and regulation; development and conservation.
The challenge is to balance these competing forces in a way that takes people along with us: our investors, our shareholders, our customers, our board, our staff, the government, regulators and arguably the most critical of all, the public.
My view is that modern leaders today need to start from a position that the enterprises we lead are the guardians of national resources.
We have been granted licences by the public’s elected leaders and government regulators to develop these resources as best we can.
The privilege granted to our companies comes with heavy responsibilities.
I believe the resources industry has a fundamental obligation to provide value to the Australian people.
For me, in the resources sector we must be trusted stewards of natural resources and infrastructure, we must do the right thing and act in the broader interests of all parties.
In practice, this means demonstrating our commitment to the regions where we work, and to the nation more generally,
…whether it be in the form of highly skilled jobs and training,
…providing a bright future for people living in regional and remote communities,
…building bridges with traditional owner groups and providing support for the strengthening of indigenous culture.
Building public support and trust in what we do is critical. We need to talk beyond ourselves and extend the conversations into the lounge rooms, train stations and coffee queues across the country where the 60 square centimetres of screen is where the battleground of information is really targeted.
And finally, I think it is important to say, that while we focus on the tectonic plates of changing expectations that we remember to stay grounded and connected to the small things too, as they remain vitally important, whether they be:
…the social chats over making a cup of coffee in the office…
…remembering to thank people for something they’ve done…
…to have some fun and a laugh during the day.
These informal things cost nothing but are vital to ‘how valued’ people feel in a workplace and help you remain connected to what is really happening.
Now, if you think back to where I started this morning, asking you to recall your best and worst job, I think you can see that there is much to be gained in developing open, heathy and positive cultures in an organisation.
So I’ll leave you with a final thought.
As business leaders responsible for delivering our companies’ vision, let’s ensure we make creating a healthy culture central to our mission.