Abu Dhabi National Oil Company:

The Boldness of Bottom-Up Culture Change

2019 Page Research Report

paths.page.org
Omar Zaafrani joined Abu Dhabi National Oil Company (ADNOC), the national energy company of the United Arab Emirates, as SVP, Group Communications in 2016. He was part of the new CEO’s Project Management Office aimed at transforming the 50-year-old firm.

 

Company background and the CCO’s objective


Omar Zaafrani joined Abu Dhabi National Oil Company (ADNOC), the national energy company of the United Arab Emirates, as SVP, Group Communications in 2016. He was part of the new CEO’s Project Management Office aimed at transforming the 50-year-old firm.

 

The trigger for change was a significant decline in oil prices in 2015-16, driven by the emergence of new market dynamics, trends and competitors. The company had to become more competitive, efficient and resilient in a more volatile market and better positioned to maximize profits from every barrel of oil produced. This included going beyond being an oil producer and seller – selling crude on the market – to expanding its refining and petrochemical portfolio, as well as revamping its marketing and trading capabilities, to gain greater market share in the growing global economy. Some examples include:

ADNOC, a conglomerate of 18 operating companies and joint ventures, consolidated its two offshore operating assets as well as three of its maritime and oil field services business. Today, the ADNOC Group consists of 14 businesses.

The company’s diversification into refined products and petrochemicals, where there is significant projected global growth, requires robust operational efficiency in a highly competitive market.

ADNOC needs to revamp its approach to product marketing and sales, building a trading capability to capture greater margins across its product suite. This has required an entirely new operating model, set of skills and appetite for risk.

To deliver on the operational and financial targets, the leadership had to manage the company with the same level of discipline as its Fortune 100 publicly traded competitors. There were four dimensions of the transformation effort: Performance, Profitability, Efficiency and People. The company did well against the first three, but People – i.e., culture – proved more challenging.

ADNOC’s culture was stagnant, top-down and siloed.

The performance management system needed to enhance accountability, while also placing a greater focus on technical and behavioral competencies. Prior to 2016, the majority of employees, roughly 95%, were rated as high performers, while today they are more evenly distributed across the performance curve, with roughly 80% ranked as solid performers.

The 14 operating companies each functioned separately, with its own policies, operating models and governance, limiting collaboration, information exchange, mobility and growth prospects for employees, as well as opportunities for operational efficiencies.

The new culture needed to be agile, made up of empowered teams and individuals acting as one ADNOC with a growth, performance, accountability and innovation mindset.

 

How did the CCO move to Stage 2/Pathfinder?

Because ADNOC was undertaking a fundamental transformation of the company and its culture, Omar’s first initiatives fell into Professional, which is about defining and unifying the desired culture, making the case for it and developing campaignery.

Definition: To break down silos, improve the sense of community and improve collaboration, Omar made the case to turn a “house of brands” into a “branded house” – unifying the brand across all 14 companies and establishing a single vision, mission and set of values. In defining the values, the communications team took a bottom-up approach and extended employees the opportunities to select the values they believe represented the aspirations of ADNOC and its people. The sense of responsibility and ownership of the exercise drove engagement and widespread acceptance of the brand unification.

Activation: To activate the culture, based on the new set of values, ADNOC launched “The ADNOC Way” — including addressing gaps that emerged from the company’s employee engagement survey. The program engaged the entire organization and offered tools such as values talks and boards for managers to conduct face-to-face team engagements for rapport building, innovative thinking, idea sharing and greater understanding of personal and team purpose.

Modeling behavior: For example, youth had become a powerful force, with 59% of the population under 38. This new generation is enthusiastic and eager to play a role in shaping the organization’s future, and they are an important lever to drive bottom-up engagement and to mobilize the base. The company established a Youth Council made up of young employees, and Omar drew on it when launching The ADNOC Way culture program. The Youth Council became the owners and the face the program, which helped ensure adoption and implementation.

At the same time, Omar recognized the need to accelerate to the desired future state, driving as much change as possible in the first 18 to 24 months. This required moving simultaneously to Pathfinder and even Pacesetter actions:

Creating new training programs so leaders model the behaviors: Omar and his team created a program to improve leadership engagement as a building block to the ADNOC Way program, including an executive leadership course developed in partnership with HR and the London School of Economics. The training was aimed at supporting leaders in authentically displaying the desired behaviors and upholding the company’s values.

Designing experiences: To ensure the new brand and renewed culture weren’t simply spoken, but experienced and “felt” by employees and visitors, ADNOC redesigned the floors of its new building, creating open plan office spaces to support its drive to break down siloes and improve collaboration, with a dedicated floor for employees to collaborate using innovative technology to enable better brainstorming and out-of-the-box thinking.

 

What elements of Stage 3/Pacesetter did the CCO achieve?

Transforming policies, processes and management practices: The company’s leadership discovered that they needed to catalyze a reinvention of HR itself, making it into a vital enabler of the organization’s future. HR’s focus had been primarily on process, rather than instilling a rigorous performance management system, shaping culture and developing talent. If the company were going to become a more strategic and meritocratic organization, it required harnessing new skills and competencies throughout the employee journey.

For instance, when the company determined it needed to align and develop a group-wide employee technical competency library, the HR team’s initial response was to take an off-the-shelf product with limited socialization and roll it out across the organization. Omar intervened. He understood that the company’s subject-matter experts (e.g., in geophysics, drillers, etc.) would not adopt competencies simply dictated by Corporate. Instead, Comms supported HR to put in place a process that went to the SMEs across the 180 disciplines within the organization and allowed them to shape the competencies, own them and socialize them. And HR made the new behavioral and technical competencies developed by the SMEs a core component of performance management and personal development plans.

These activities were supported by further initiatives to enhance HR policies around flexible working hours, women’s empowerment, child support and a more rigorous and transparent performance reward system.

Using social media and its internal channels, Omar’s team listened carefully and measured internal and external sentiment. During the early days of the transformation, the high level of negative commentary allowed the team to understand employee pain points. This information was folded into The ADNOC Way culture program and addressed head on. Today, negative commentary has declined tenfold and centers primarily around one issue: employment opportunities.

Employees were also encouraged and equipped to put forward ideas that would help drive ADNOC’s transformation through a digital ideation platform. Each idea needed to be crowdsourced and to receive 250 likes in order to be reviewed by management. More than 2,000 ideas were submitted, generating more than 26,000 likes and 15,000 comments. This initiative drove bottom-up engagement and ownership around the transformation.

 

What were the keys to success?

1. Don’t make assumptions. Question readiness. “Taking on this work requires being willing to speak up, voice concerns and challenge perceived facts,” says Omar. “Driving change requires a willingness to put oneself out there – and a willingness to take on more work and responsibility. You can’t say, ‘This is HR’s problem, not mine.’ You need to step up and be willing to fill gaps. You need to actually persuade others, not just overrule them.” He also discovered that you can wind up biting off more than you can chew. At present, because he has been given an ever-expanding mission, including the transformation of culture, Omar is still building his team to support the growing needs of the business.

2. Drive bottom-up engagement, creating initiatives and programs where people feel they own culture change. “You can’t indoctrinate people into values and behaving a certain way,” Omar says. Many large-scale change programs at ADNOC fell short on execution because there was no network to champion programs that could bring the change to life. Now the company has undertaken many change programs – not just internally but reaching beyond ADNOC into its contractors – which have been successful by leveraging and nurturing networks of champions in the organization. “If you bring them in early in the discussion,” Omar notes, “they have ownership of the effort and its socialization.”

3. Win trust and authority by being the voice of reason. If you’re new to the organization, you have to establish political capital and build trust, in order to challenge the status quo and offer solutions. When the ADNOC transformation effort began, many were doing this for the first time. Omar and the team he built, most of whom were new to the organization, couldn’t come in with guns blazing. They had to build credibility and partnership.

He did this not only through collaboration, but by showing his C-Suite peers the value of Communications as the “voice of reason,” able to identify and quantify the reputational risks – internal and external – of planned changes. Three years into the transformation, Comms’ recommendations are taken seriously; Omar and his team are at the table for every major decision. Indeed, at a recent leadership forum the company’s CEO called for transformation of HR, and Omar is playing a critical role in establishing the project management office to lead that transformation.

A few more tips:

Leverage the power of momentum. Do as much as you can within the first 18 months. After that, it’s harder to move the needle, as inertia and fatigue creep back into the organization.

Don’t create “noise.” That makes the organization insensitive to what’s important. Both internal communications and press relations require focus and discipline around key strategies.

Mistakes will happen. It’s OK. There is no “silver bullet” to a transformation. Every organization has its own set of challenges, cultural dynamic and context. You are forging a new path and are in uncharted territory. Capitalize on learnings and adjust course as required.

 

What challenges lie ahead?

The need to sustain momentum. ADNOC has come a long way, but given the scale of the transformation, maintaining the pace will be a key challenge. The company’s leadership team and Omar are working to reshape the culture and instill change itself into the organization’s DNA. By adopting the Japanese philosophy of “Kaizen,” which translates to continuous improvement, their aim is to make sure the organization is always progressing, bettering itself and staying ahead of the curve.

The need to transform the company’s broader context. Because of ADNOC’s iconic and catalytic status in the UAE, the company’s transformation and culture change program extends beyond the organization itself. As a national oil company, there are legacy community expectations, specifically in relation to employment, that they are trying to shift. Navigating and reframing these expectations is challenging, yet essential. ADNOC plays a central role in the country’s economic growth and prosperity, so it has the responsibility to attract and develop the best talent, while instilling and nurturing a performance-driven work ethic.

The need to attract and develop key talent. Millennials and Gen-Zers – the talent pool of the future – need to be convinced that an employer will help them learn, grow, develop and further their careers. Today, the success of a business depends on the skills and agility of its talent. There are many great people out there, but companies must do more to attract, retain and nurture them, while shaping a culture that will enable them and the organization to thrive.

Latest from Page

A crisis that accelerated change in business - who’d have thought? A conversation with CEO Alan Murray.

In this episode, we bring you a conversation between Alan Murray, CEO of Fortune, and Page President Roger Bolton. Having known each other for decades, the two discuss the economic outlook in a pandemic crisis, the progress of stakeholder capitalism, employee mental health and the future of journalism. The discussion took place during our 2020 Page Spring Seminar.

How CCOs can help America change: Page Chair Charlene Wheeless discusses systemic racism.

Page Chair Charlene Wheeless has been convening conversations among our members recently to share ideas about the concrete steps that they can take to address systemic racism within their organizations and across business and society, an issue on which she has been a fierce advocate throughout her career. In this podcast she speaks about what's happening, what needs to be done about it and how CCOs can lead the charge.

How a Fun-Luving Culture Confronts a Pandemic.- Whitney Eichinger, Southwest Airlines

Carrying on our series on COVID-19 and its implications, in this episode we speak with Whitney Eichinger, Managing Director Culture & Engagement at Southwest Airlines. We explore how an essential business with a strong culture of employee inclusion can leverage that to support the company through this crisis.

It is not when we go back to work, but how. - Bob Feldman, Vice Chair of ICF Next.

Continuing our series on the COVID-19 crisis and its implications, many companies are now looking to the future, including when and how employees will return to workplaces. Bob Feldman, Vice Chair of ICF Next, explores the question of how we get back to work, from implementing policies and guidelines that ensure workplace safety to the broader, potentially lasting impact on corporate culture.