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The Changing Role of HR Leaders in Energy Sector: Interview with Gerard Penning, EVP HR Downstream at Shell
5th HR Management for Energy Sector 2020
4-6 March 2020, Amsterdam, The Netherlands
Gerard Penning, Executive Vice President, HR Downstream at Shell speaks to our Conference Producer, Anastasiya Gayvoronskaya about the changing role of HR leaders in energy, helping organizations adapt to change and creating leadership and workforce that is more diverse.
AG: How do you think the role of an HR leader in the energy sector will change in the next 10 years?
GP: I think the role of an HR leader will change in the near future for all industries, not just for the energy sector. This is because the nature of work is changing across industries. As a result of advancements in technology and how organizations respond to it, how people work will continue to change drastically in the future.
It is important to note that 10 years from now, the half-life of what you know will rapidly reduce. When you go to the University to study, for instance, engineering, the time for which you can apply that knowledge or investment is getting shorter, because of the pace of change of how work is done. It will be an important part of the HR role to support people to adapt, adjust and to help them become lifelong learners, while ourselves learning constantly.
Another important element will be the collaboration between humans and bots (as we call them). People are using digital assistants already. I think it would be very normal in, say the next 5-10 years, for human beings to interact with AI in their day-to-day work. This would include self-learning tools that help us, support us, and make our work easier. If you wish to be a successful organization, you will need to learn to differentiate between what work is better done by humans, and the work and analysis that is better done by machines. I see it as a fantastic opportunity, as new technology enables people to accomplish more, efficiently and make their work more interesting; as long as we adapt and keep ourselves up to date.
Coming to the energy sector specifically, sustainability has become the most important part of what we do and how we do it. Organizations are looking at making the best of alternate sources of energy, and new ways of working with solar, wind, as well as biofuels. There are a lot of opportunities to step up in those fields. At Shell, we are working actively to transition from our history of oil and gas into a future where there is a balance between oil and gas and alternative sources of energy. For an HR leader in the energy business, there is constant change as a result of these transitions - you must evolve and help your people evolve. As an organization, we must make sure that there are enough profits generated to enable us to explore these sustainable sources of energy and ensure that these new energy sources and technologies are profitable as well. Keeping up with these challenges make it a fantastic time to be in the energy businesses, and in the HR role driving change in organizations.
AG: What are the challenges in front of the Human Resource function in energy on the road to a more sustainable future?
GP: Sustainability is about working in a way that ensures we have a healthy planet to live in and pass on to future generations as well. It is not just a challenge for the energy sector alone or the HR function inside it, it is a broader goal for everyone. Our populations are growing, the world has about 7.3 billion people now and it is expected to grow to about 9.7 billion by 2050; more so in the developing world. The resulting increased migration to larger cities would directly translate to an increased need for energy. To do that in a sustainable manner, we require creativity; skilled and creative people in technical, finance, marketing, and every other discipline within energy companies. The crucial role of the Human Resource function in the energy sector is to help organizations to better change and adapt to the changing environment. We don’t know for sure what the future will look like, but we do know that it will be different in many aspects. HR leaders should be equipped to guide organizations to adapt and reposition to change through modeling different ways of working, new ways of performance management, rewarding people, helping the people learn new skills and to engage better with other stakeholders. It requires all your organization’s resources to be adaptable as well as agile. Adapting to change is already critical today, it will be more so in the future.
AG: How do we achieve more diversity in the energy industry and more women in leadership positions?
GP: Diversity is a lot about what we can learn from each other. Generally, a more diverse team delivers better results. Also, when you have a minority in a team, less than 20 %, it's very hard for the minority to get heard or taken seriously as the majority tend to dominate the conversation. If we look at the leadership cadre in Shell, in the downstream, 26% of our leadership is female. Next year the target for us is 30%, and I can say that we are moving in the right direction. The marketing function has more female leaders than the technical disciplines do. In the Human Resource function, it is 52% of women in leadership positions, so there is already parity. A more balanced and diverse leadership team delivers better results.
Keeping in mind that we are selling our products to a world that’s 50% men and 50% women, I believe that’s the way it should be inside organizations too. Diversity in terms of gender and nationalities is an area we are putting a lot of work into. In multinational companies, it's best when the leadership of a specific country comes from that country and speaks the same language. At Shell, the senior country leaders are usually from the location they operate in, and it translates into better results.
Diversity is not just a male, female or nationality thing; different ways of working is another area of diversity we need to embrace. We have introverted people, extroverted people, creative people, analytical people, optimistic people as well as pessimistic people. A balance between these different people makes for a strong team. It is good that there is a lot of focus on gender diversity now as there is a lot of work to do there. And we shouldn’t though forget the other areas we need to be diverse in. Balance is the magic word here.
At the 5th HR Management for Energy Sector 2020 in Amsterdam (4-6 March 2020), Gerard Penning will deliver the keynote address on ‘Leadership in a volatile world - how to create and sustain true leadership differentiation.’ The two-day forum and pre-conference workshop will bring together HR leaders in the energy sector to share and brainstorm on common challenges, exchange ideas and network in an exclusive business-friendly environment.
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