Shell’s outgoing chief HR officer on the war for talent, the future of the expat model, and the rare ‘art’ of HR

The world is changing and one industry at the forefront of this is oil and gas, something Shell’s outgoing chief HR officer Hugh Mitchell knows only too well. As he prepares to retire from his 36-year career at Shell, he spoke to People Management about how HR can transform their organisation to make the most of the opportunities change brings. 

What are your thoughts on recent turbulence in the oil and gas industry?
The industry by its very nature is always volatile, because supply and demand are influenced and buffeted by fundamental factors, but also by politics and various other things going on in the world. We are in one of those periods at this point in time. I would hesitate to say this has been the most turbulent period, but certainly it is turbulent. 

When was the most turbulent period for Shell? 
I think the main issue with these periods is whether your company goes into them from a position of strength or weakness. Typically a downturn will present opportunities and challenges - but the weighting between them depends on the state of your company. On this occasion, Shell went into it with a strong balance sheet, and therefore we are turning the period into an opportunity, in terms of refocusing our portfolio and progressing this merger with BG Group. There have been other times, such as in the late 1990s, when we’ve gone into these cycles in a less strong position. There were a lot of major mergers and acquisitions in the late 1990s, and Shell didn’t play in that because we weren’t in a strong position, internally. 

Are you optimistic about the outlook for the industry as a whole? 
I am optimistic, and the main reason is: the fundamentals of the energy industry really don’t change. They are driven from demographics, from rising populations in countries such as India, China, Indonesia and Brazil. As those countries go through their own development cycle, and seek to enjoy the things you and I take for granted every day, their demand for energy increases. One in six people still don’t have access to electricity: the demand for energy will continue to grow significantly over the century, and that is what drives our business. It comes with an environmental challenge - one that is very high profile because of COP21 [2015 United National Climate Change Conference]. That energy demand has to be met in a more sustainable way that it has been in the past. 

How can an organisation identify and recruit innovation talent, when it’s something you can’t really touch? 
In large companies it’s less about trying to spot the unique innovators, and more about trying to create an environment and culture where the innovation that exists within everyone is allowed to flourish. The idea that somehow through recruitment you can select a really incredible, innovative be honest, is that person likely to walk through your front door? I suspect not. They are more likely to have gone to a small startup. You have to create a system and culture of innovation, one where the leadership is committed to the importance of innovation, gives it the right space and funding, and promotes it as a value and attribute that you want to see, not just in the R&D side of your business, but as an everyday feature of the whole organisation. 

Is the expat talent model over? 
There is still a place for it. Because mostly when you’re taking work to people, it’s usually in large concentrations and to countries that have a large supply of high-quality talent, and/or lower talent costs. But if you decide to do a major project in a remote part of the world, then you’ll still have to support that with expatriation. And equally, if you want people to actually run a global business, they have to have experience beyond the immediate confines of the country in which they were born. We would always wish to move people as part of their development. But, for example, Nigeria is a net exporter of talent for us. I have a lot of expats there, but I have more Nigerians working elsewhere most of the time. If you look at many countries, including some in the Middle East, they do not actually have a large enough indigenous population, or sufficiently qualified population, to do all the jobs that actually exist inside their country. Or in many cases, the top talent of a particular country is almost off-limits to you as a foreign company because they are all working for local organisations. Here at Shell, we have around 8,000 expatriates, but that is out of almost 100,000 people in the company. 

What one thing should HR practitioners do to transform the way HR works in their organisation? 
For me, the core of it is being actually at the table. At Shell, our [HR department] could probably be a little leaner, but I insist that we have HR representation on every leadership table that matters. Because if you aren’t in the room, then you are in a reactive space. Somebody comes to you with an issue, problem or challenge, and then you respond to that. If you’re in the room, you can intervene at the beginning of a strategic conversation, not after it’s taken place. As a function, we are far better skilled and organised than we used to be, we’ve more professional - but when do you get to deploy this? The best time to play is at the absolute beginning of the conversation or the strategic consideration, or when the problem first emerges. That means you’ve got to be in the room. 

Prospective HR professionals looking to join Shell need to be able to apply “the science, craft and art of HR”, according to your website. Is this a rare quality? 
I think the art bit is quite rare still. If I look in good companies, I typically see a place where, around the CEO, the HR and finance leads are pivotal players in driving the agenda of the company. I say that because most companies are organised similarly. They’re organised in some divisional form - either geographically, or line of business divisions. What that actually means is, the only people other than the CEO who are carrying agendas horizontally across the company - the only other people in the room thinking about things from one end of the company to the other - are finance and the HRD. All the other members of the leadership team are dealing with a vertical piece of the company. So the opportunity is there for HR to use that lens to really add value. 

What one book would you recommend HR professionals read? 
I quite like reading books about leaders - I’m just about to start Alex Ferguson’s new autobiography. Basically, I think that at the core of everything we do in human resources, probably the biggest single lever we have is, is to make leadership more effective. So trying to understand leadership, what drives it, can you create it on a systemic basis, or do you get it right or wrong with an individual - I think that’s quite fascinating. At the core of HR is the fact that you have this inanimate capability in an organisation, which probably has more potential than any other thing that you can bring to the organisation. If you build a plant, it has a capacity of 100, and maybe on a good day you can tweak it and get it to 110. But a human being, when you bring them in as a young person, you can make them multiple times more impactful than the day you recruit them - if you get it right. That’s the motivating piece for HR for me. 

To read more of the Shell HR chief’s thoughts on how Dave Ulrich’s business partner model has affected HR, and why you should never underestimate your employees, read the magazine interview published in the January 2016 edition.