Here.

We.

Read.

Your.

Very.

Recently designed.

Life.

Of Honor.

Thank you so much I'm really
excited to be here this afternoon

and.

Very excited to be here this afternoon and
thank you so much for

ask me to tell you if I participate today.

Leadership that's the topic leadership.

Every person in this room has experienced.

Some of you see yourselves as naturally.

Others of you don't see yourselves in that
light at all but I can assure you every

person in this room has played the role
of leader because there's only

one essential element to leadership
one fundamental thing that must be and

that is followership someone must
be willing to follow your lead.

And each of you at some point has
influence somebody to do something that he

she or they would not otherwise
have done but for your presence but

for your motivation but
for your leadership.

So the question is not are you leaders you
are the question today is our unit good.

That's fundamentally the question.

My purpose is to share with
you a few of my thoughts.

About leadership.

I don't profess to be an expert there are
plenty of experts I'm not one of them I

don't profess to be rather I want to share
with you some of my experiences that

I have found personally useful and my hope
is that you'll find them useful as well

principally because these essential
practices of leaders also

I find happen to be practices
of just really good people and

so with that let's begin.

The use of that is my glasses here
I can't see so well and more so.

Practice number one.

Great leaders practice clarity of purpose.

Now I use the term practice clarity of
purpose rather than great leaders have

clarity of purpose which many people
prefer to use perhaps I don't like that

terminology because it suggests
somehow that clarity of purpose is

innate inherent you've either got it or
you don't and I don't believe us

the case I believe great leaders
practice clarity of purpose and they do.

By asking themselves basically two
fundamental questions question number one

is what is it that I'm trying to
accomplish what I want to achieve and

question over to is why do
I want to achieve that.

That's fundamentally what
good leaders try to do and

I'd like to explore that a little bit by
starting with a hypothetical dialogue and

then we'll delve into clarity of purpose.

You know when we first meet someone
typically we engage in small talk.

And that small talk kind of goes like
this Hi My name is Glenn and you are.

So pleased to meet you know.

Where are you from.

And you might respond you know
I'm from that era of the country

we have a lot in common eventually you get
to the question So what is it you do for

a living now my response typically
is I work for Royal Dutch Shell.

Often they return with so
you're in the oil and gas industry.

And I say well I suppose you could
say that that's certainly true but

I prefer to think that I'm
in the energy business.

I'm in the energy business.

What I'm going to share with you over
the next few minutes is not my brainchild

I didn't come up with it I didn't
develop it Peter Voser a former C.E.O.

of Shell came up with this notion but
I embrace it I buy into it.

It offers me guidance and
I share it at every opportunity and

what he said was this.

That shell we work to help meet
the world's growing demand for

energy in a responsible way.

In a responsible merely means in a manner
that is socially acceptable economic Levi.

And environmentally sustainable again
socially acceptable economically viable

and environmentally sustainable now.

Why do I find that motivating I
find it motivating because energy.

Is this fundamental to our
existence as food is for

eating water is for drinking air is for
breathing it is fundamental to what we do

is fundamental to our way of life.

I don't mean to suggest by that
that we should be very conscious of

our consumption of energy I don't mean to
suggest that we should look for innovative

technologies and ways to use energy more
efficiently more effectively certainly

in the developed world we use a lot of
energy perhaps more than our fair share.

So to be sure one of our responsibilities
is to look for ways to generate and

consume energy more effectively what you
see here in the bottom right hand corner

of the screen is a depiction
of the shell eco marathon.

Now shell sponsors this event
in Europe in the America and

in Asia we do this every year and
the intent is that students from around

the world will enter a vehicle that
they've designed with the objective of

winning by having a vehicle that goes
farther than any other on a leader

a fuel I don't know the record but
I can tell you it is substantial and

this is a way that we promote the notion
of using technology to better

think about how we consume energy more
effectively you also see in the in the in

the slide here a picture of
a windmill I went target.

Because shell also looks
at wind energy hydro

energy solar energy we look at bio
fuels in the form of cellulosic algae.

Second and third generation we also of
course look at fossil fuels oil and

gas and we're fairly unique among
the majors in that if you look at

our reserves greater than fifty percent of
our reserves are natural gas the cleanest

burning of the fossil fuels with carbon
emissions that are fifty percent fewer or

lower than coal we're also
a world leader in L. and

G..

So.

You might ask.

Glenn you are in trading that was the
introduction how do you participate how do

you play in this clear purpose in
this vision one of the things I said

a moment ago is that we help to meet the
world's demand for energy in a responsible

way which includes being economically
viable that's where I fit.

You know you give us capital in
the form of either equity or debt and

you expect a return on that capital and
if we don't provide a sufficient return

consistent with the risk that you
take when you take your capital way.

So my role in the organization is
help is to fuel the returns engine

that's the way I participate I help
to fund our ability to pursue.

Meeting the world's demand for
energy in a responsible way.

So again you might ask Well Glenn.

Why is the vision really meaningful to you
why does it really make sense to you and

the reason that makes sense to me is this.

Every time your heart beats
the world's population increases by

approximately two individuals.

That's roughly one hundred
ten people per minute

roughly six thousand five
hundred people per hour.

Our About fifty seven million people
per year that's a lot of people.

Between now and twenty fifty we anticipate
that the world's population will

go from seven billion to about nine
billion people that's the equivalent

of adding another India and
China between now and

twenty fifty we also anticipate the by
the end of this decade the consumption of

energy will go from fifteen to twenty
percent and twenty percent essentially

represents the addition of another China
in terms of energy consumption from two

thousand to twenty fifty we expect that
the consumption of energy in total will

increase from about two million
barrels of oil equivalent per year.

PER DAY I'm sorry to about four hundred
million barrels of oil equivalent per day.

That's a phenomenal increase
in energy consumption and

again you might ask Well Glenn.

Why is that motivating to you well I
guess the fundamental issue is this.

In twenty fifty I may or may not be here.

But you will be here.

And the clarity of purpose you
guys the decisions that I make

that impact your future guys the decisions
that I make that impact their future

those are my daughters and I'm certain
that they or their kids will be here.

Clarity of purpose hopes
to inform our choices and

that's why it's motivating to me to know
that when we talk about making energy

available for our society in
a responsible way it's meaning.

Is a purpose there's a larger than me so

again when you ask me Glenn what
is it what is it that you do.

I'm very proud to say I mean the into.

Business that's what I do.

Practice number two.

Great leaders practice the behaviors
that they want to see in others.

I had the privilege of.

Ten years ago or so
to go to a leadership workshop at Wharton.

And there was a professor there
who his name I don't recall but

I recall is a lecturer very well.

He was an older gentleman.

I think it was a professor
emeritus actually.

And.

He had silver here is rather
short he knew very very slowly.

But.

When he began to lecture his talk was
swift He talked at one hundred miles per

hour is thinking was crisp he was
clear was a bill sharp as a tack and

whenever he'd ask a question of
the group it was a noticeable lag and

noticeable pause as our
minds struggled to keep pace

with his Eventually someone cautiously
raises hand or hand her hand and

respond to his question so
anyways this professor told a story

that his wife his wife had
asked a question of them and

the question that she asked was.

Honey she said to him.

Do you think our kids really love us I
mean I know they say they love us but

do you think they really love us or
are they just waiting for us to die so

they can collect our money.

He was apparently pretty well off.

His response was wife was.

You know.

All of the major holidays that we
celebrate Christmas Thanksgiving Easter.

We celebrate those holidays with
our kids and their families.

He said Every Sunday we have dinner
with one of the kids without fail.

My birthday your birthday our anniversary

they never ever ever forget that.

We want to see the grandkids
They're always around

we don't want to see the grandkids
they're never around.

He also said.

When something's not right in the house
something's not going right we need

something repaired and we can't handle it
ourselves one of our kids show shows up

one of them shows up they're
always there do our kids love us.

So I don't I don't really know.

But I'm getting all of
the behaviors that I want.

And I choose to interpret it as
love I'm getting all the behaviors

that I want.

Ralph Waldo Emerson said what
you do speaks so loudly.

That I cannot hear what you say.

Behaviors alternately are what
indicate to others our intent.

Ethics.

Our desires who we are.

And getting the behaviors that I want.

In shell.

Each year we.

Log about fifty thousand
hours in our helicopters

typically going offshore.

And to participate or to go offshore in
these helicopters training is required.

That training is essentially basic off
shore safety induction and emergent.

Training and as the name suggests the
intent of the training is to ensure that

you have certain foundational fundamental
knowledge on certain critical safety.

Such as sea survival
helicopter escape as required.

Emergency first aid etc Now naturally
the hope the desire is that you'll

never actually have to use those skills
but if it's necessary it's absolutely

fundamental that you have the training
now the time that's required invested

in this training is non-trivial is
about two and a half days three days.

So if you're going offshore just once or

twice that's a pretty significant
investment but then burden our C.E.O.

said if you're going to do this if
you're going to make this journey

you must you absolutely must take
the training no waivers no exceptions and

what you see here is been doing the
practical component of the course which is

the helicopter escape
he's demonstrating by his

actions his intent and the behaviors that
he wants to see in the organization so

we had an opportunity to share
the story with staff at Shell

we do it across the web and
then they respond accordingly.

And this is what some of them had to say.

They said you know this is so
great to see in the past.

I've seen support for deviations
from training due to time pressure

this shows the importance of just as the
training to keep our people safe that's

number one great leadership by example
walking the talk inspires everyone.

Now recognize that shell we are technology
firm we're an engineering firm

we have a lot of engineers scientists.

Tax attorneys accountants we
can be fairly linear and so.

We had wanted to get this sort of response
which is entirely appropriate as well

this is very sensible if you helicopter
goes down to see is not like gravity or

the laws of nature are going to
graduate just because your C.E.O..

Ben agrees he took the training and
he's demonstrating through his action that

this is incredibly important actions speak
louder than words as Mark Twain said but

not nearly as often our objectives
as leadership as leaders

is to minimize the gap between what
we say and what we do behaviors

matter.

Leadership practice number three.

Great leaders shape culture.

And what do I mean by that.

When I say culture what I mean is the way
we do things around here is where we get

things done it embodies
the behaviors that we value.

I like to make a distinction
between culture cultural values and

ethics ethics are those immutable.

Never changing sacrosanct
moral principles.

That we just don't touch there
are things like humility and honesty and

integrity and respect for
others the types of things that your

parents taught you when you were
quite young we don't touch those.

But leaders do shape culture and
they shape culture in a way

that meets the objectives of the firm or
the group or the team or

the family it's important
that leaders shape culture.

When for
instance culture is shaped poorly.

Then you can have really
quite catastrophic outcomes

I happen to experience and.

Lived through one of those
catastrophic corporate outcomes

then it said earlier I worked for Enron
now for many of you in two thousand and

one you were twelve thirteen years
old maybe younger for some of you.

And you probably don't recall all
of the scandal in details regarding

the demise of Enron which was at the time
the largest corporate bankruptcy in U.S.

history at sixty six billion dollars But.

I can assure you I remember
it extremely well.

I remember that on December second two
thousand and one that was a Sunday morning

in Amman filed for bankruptcy I remember
going to work on December third.

And.

There was a manager about nine o'clock ten
o'clock or so who climbed up on a trade

bench in the middle of the floor and
in his most sensitive voice yelled out.

Go home.

You don't have a job anymore.

I remember.

People taking small boxes and
collecting the contents of their desks

and streaming out into the street.

I was watching the monitors it was like
it was everywhere I was on C.N.N. And

it was on Fox News A.B.C. is everywhere
and I was still in the building and

I recall many of them just taking
a seat on the steps of Enron and

they took that seat because you know many
of them were from the suburbs they took

the bus in and
they returned buses weren't.

They weren't there weren't there weren't
traveling it so they were stranded.

It was a it was a rather.

Challenging experience
because it's awkward for

me at least I was one of the survivors

I was I was there after the bankruptcy and
you go through all of the stages of the.

Loss that you might imagine you go through
the denial you go through the bargaining

you go through the anger you
go through the depression and

finally you go through the except
as you go through all of them

having had the experience I would wish
upon my worst enemy I really would it but

I learned so much from it it's shaped
the way I think about my business

the what shapes the way I think
about how engage my staff.

It's very very very key to to
how I view the world today.

As you can imagine many
speeches have been given.

Many books have been written even movies
have been made at this point describing

the myriad of reasons why Enron failed.

But I'm going to distill
it down to just one.

Enron experienced a failure of
leadership to shape the right culture.

It's that simple Enron experienced failure
of leadership to shape the right culture

I'm going to reference Willie Peterson's
account and I do this because I think you

did a really nice job of describing
the essence of the situation at Enron.

He said basically.

Ken Lay and Jeff Skilling his protege.

Their objective was to create
a new winning proposition and

that winning proposition was that
Enron will thrive it will succeed.

By creating new markets.

And if you look at the gas and

power market today there are a largely
shaped on the basis of Enron's work.

So they've had enormous had a substantial
lasting effect on our industry they also

thought that free markets should shape the
way the company was structured internally.

Nothing wrong with the.

Either of those options nothing
wrong with that at all.

Recall you may recall that Enron came
about as the amalgamation of two

old school pipeline companies so

the transformation of culture within
the organisation was significant in

fact what you found was that they
were going to became relatively flat.

There are only three or
four levels between the C.E.O.

and the common staff or.

Enron competed very effectively at the
business schools the best business schools

in the country warden Harvard Sloan
Chicago you name it and they were

successful in getting those young minds
who would otherwise have been destined for

Wall Street and
wrong was lauded as the most innovative

company in America for
three years in a row.

In Iran also instituted a fairly draconian
measurement system and reward system

it was called we thought of the ranking
exist they were basically five levels.

The top level the top five percent they
enjoyed just extraordinary rewards.

The bottom fifteen percent their days were
numbered at Enron if you were in that

bottom fifty percent you weren't
likely to be around for long.

The challenge with the structure was that
most of the reward was a function of

individual contribution and maybe a little
bit of your business you know performance

but it wasn't very focused
on how to Enron perform.

And to see what that's the problem I'm
just going to use a little analogy

I like soccer my girls played
soccer I coached soccer or

even ref soccer from time to time and
if I ask you

what is the purpose of the soccer
team what is the purpose.

It is to.

Is to win right the purpose
of the team is the way.

Right.

Now if I were to ask you there's
the defense and they all fence and

I ask you what is the purpose
of the defense it is to.

Protect the goal stop the score.

If I ask you what's the purpose of
the officer going to tell me as to score

simple enough now.

Because I'm a wise coach and

I want to motivate my office it's I sit
in my office of players I'm going to pay

every member of the office a thousand
dollars for every score that is scored for

every goal a thousand bucks to
every member of the author.

Which do you think they will prefer would
they prefer to lose the game seven to

eight or to win the game one to zero.

My suspicion is they're going to prefer
to lose seven to eight because that's

the motivation in the compensation
scheme that I've established for

them I've taken the primary objective
of the team which is to win and have

subordinated to the secondary objectives
which is to protect the goal and to score.

Enron did much the same thing.

To structure as the management of Enron

was seeking to you know continue to.

Make untenable growth targets or promised
untenable growth targets for the markets

the structure was such that staffers
in order to preserve their positions

to avoid their rank in order to contain
enjoy enormous bonuses were encouraged to

deliver more and more lucrative deals.

I'm not going to get into the accounting
at Enron but they use mark to market

accounting and it has certain implications
we can talk about another time but

the bottom line is this what eventually
happened is risk taking which is good.

Became recklessness as bad.

Entrepreneurial ism which is really
quite good became irresponsible.

Excellence became a bit of arrogance.

And individual accountability.

Became cutthroat competition and
in some instances criminality.

And I don't want to suggest that everyone
in Iran was was was was was a criminal or

a bad person ninety nine point
nine percent of people there

I count myself among
them were good people.

That said good people sometimes
in bad situations do bad things.

So we have to be careful.

About the structure.

And the behaviors that reward it's
clear that Enron got what it wanted I

can assure you that Jeff Skilling Ken Lay
did not set out to destroy the company and

they certainly did not set out to destroy
their reputations no question about that.

The problem is that in
the transformation of culture.

When things went wrong
they didn't check them.

They didn't apply the tension that
kept things in good balance and

as a consequence.

If you start recognizing that this
is the standard and you do a little

infraction and you get comfortable
with that infraction that becomes

the new standard and next thing you know
you make another little infraction and

that becomes the new standard and
another and another and another and

eventually you're far removed from the
standard that you originally established

you're far removed from the norm
that largely occurred in Enron.

So people tend to judge.

Unethical behaviors at time
in light of the outcomes

they tend to be judged more harshly
when the outcomes are negative and

less harshly when the outcomes
are positive often performance systems

often focus on what did I deliver.

They don't focus too often
on how I delivered it.

And I'm fond of saying again I borrow
this liberally from others and

I agree as ation I'm fond of saying
how we make our money is as important

as the money we make it is
fundamentally it is fundamental.

The victims of this
failure were real people.

With real stories with real lives
I recall going out to dinner with

a friend of mine Tim several days
before the banquet so we didn't know

that it was going to be fall that we can
but we knew it was it was coming he and

I went out to dinner and
had a very gravelly voice.

And he said to me.

As I swelled with emotion he
said to me you know Glenn.

I am sixty three years old.

And in a week.

Maybe two.

I am going to have to start.

To work again as if I were twenty
five I've lost everything and

his story is not unique
He's just one of the.

Who experienced exactly the same
thing the choices we make

have impact that are significant.

And the impact real
people in real lives so

what do we take away from this number
one as you create a relevant culture

create a relevant culture that promotes
the strategic aims of the organization

that's number one number two
what gets measured gets done

what gets rewarded gets done repeatedly.

Measure and reward the desired behaviors.

Positive culture requires
persistent attention.

And lastly culture is a way of life.

Is not a document.

Practice number four.

Leaders set high standards.

Leaders set high standards.

Between two thousand and
two thousand and nine

thousands of lives were lost.

In the oil and gas industry.

And Shell.

The vast majority of our staff far and
away observe our safety culture

day in and day out but
where a serious injury occurs and

worth to tell it does occur
almost without fail is because of

noncompliance with safety
with the culture of safety.

Almost without fail.

At Shell we refuse to accept

the notion that serious injury and
death are an inevitable

consequence of working in our
industry I just don't accept that.

So Peter Voser.

In two thousand and
nine he introduced the life saving rules.

These rules are not new.

They're not unique.

But they are powerful in the following
sense the expectation is that

every individual who works for
show needs to know which

of these rules apply to him or to her.

And they must honor them for me as
an example if you look at the lower right

number one journey management plan when
I'm traveling and identity management plan

number two if I'm driving buckle
up number three don't speed and

don't use a cell phone
while driving number four.

No drugs or alcohol use that will
impair your work or your driving.

Smoke going designated areas I don't
smoke that doesn't apply to me.

Others that apply to folks in the plant
don't walk under a suspended load makes

sense a lot of injuries grow that way
don't welcome their suspended load.

If you're working at
height secure yourself.

Protect yourself against a fall.

Don't override systems if you're going
into a confined space get permission.

Don't override safety lockout systems.

Do gas tax tests and
were required to get permits.

They're not complicated not all of them
apply to me in my in my work space but

it's important that we recognize and
observe the standards and

one way that I demonstrate
the standard for my staff and

my expectation of my staff is for
instance when I travel and I take a taxi.

I ask a few questions before enter
the taxi number one I say the taxi

to the driver.

I work for Shell and we have a policy and
the policy is that we wear seatbelts when

we drive can you do that I can do that and
testing with another policy that you

don't talk on your phone while you're
driving are you willing to do that.

Great fantastic and when you do that and

there are three when you're driving
you're not going to speed I mean

that's just our policy will you agree
to do that yeah I get it fantastic and

I'll use your service and if the answer
is No I don't use that service.

Because.

It's one of our life saving
rules it applies to me and

applies others who are in the car with
me especially if they're driving me and

I want to show business.

Our goal is.

No harm to people.

No harm to the environment no
harm to assets that's our goal.

Since two thousand and
nine when these were implemented.

Last.
I'm injuries have come down by forty two

percent.

Fatal into.

Fatal incidents have reduced
by seventy five percent

that means that maybe as many as
thirty lives in our organization.

Have been saved.

The key here is standards matter.

And.

The guiding principle is set
the standard demonstrate the standard

demand the standard simple set
the standard demonstrate the standard

demand the standard is not complicated.

So I'm going to wrap this up and
just summarized by saying.

Great leaders.

First they practice clarity of purpose and
guides the decisions we make.

To.

Great leaders practice
the behaviors they want to see.

Fundamental.

Great leaders shape culture.

Cultures the way we do things.

And lastly great leaders practice

setting the standard demonstrating
the standard and demanding the standard

are you a great leader are you any good.

I suppose the answer that question is just
a matter of practice Thank you so much for

your.

Question.

How do you know.

Well.

I think one of our key accountability
as leaders in the show is that we take

responsibility for individually training
leaders that is one of my accountability

as I seek opportunities to share.

What I've learned what I know
to develop others as part of my.

Part of my remit.

Is fundamental to what we do for
instance what I do is

I have a number of mentoring circles that
I have where we will choose a book or two.

And we will get together in the course of
nine months and we'll go through the book

and we'll do it chapter by chapter and
then we'll use that as a basis for

conversation to talk about leadership
in application to their current work

environment or to their personal lives I
find that to be a very useful way to do it

leadership by example you demonstrate
by leading by developing others

personally.

Absolutely.

Lehman Brothers followed and
I said in Iran was a sixty six billion

dollar bankruptcy Lehman was a six
hundred fifty billion dollars bankruptcy

huge implications I'm sorry interrupt

you.

Yeah so so I'm a big believer in bonuses.

But.

I do.

But that said I think it's a function
of how you structure it so

what what happens often especially
in trading environments.

Is this and in my opinion a huge
mistake that people can get

really extraordinary bonuses in a single
year and what I mean by that is that

people will therefore take risks in
order to achieve that bonus level and

may be in appropriate risks and if they're
right they get a fantastic reward and

there's no long term consequence they walk
away if they're wrong they may get fired

they'll lay low for about six months and
then go work someplace else and

try again I think is a very very bad
recipe we do something entirely different

from a long term perspective yes our
traders do well but they do well over time

we don't give them a million paper we
want them to have an investment and

how our business does for
the next three four five ten years and

that's a fundamental distinction over
time our traders do as well as any but

they don't do it that the cash
flow pattern looks very

different.

Yes You know we tend to talk
about leadership as if you

have to be in a managerial position and

that's really not my intent leadership is
about motivating people to do something so

whether you're an individual contributor
or whether you're leading a large

organization your ability to influence
people to do good things is leadership and

so I see it daily play
out on the trade floor

in meetings with individual contributors
or with leaders alike because it's about

influencing behaviors to get good
outcomes is not about holding a position.

It's about influencing so
it applies to everybody.

Or give you the same and.

You know I don't.

This.

Are.

So.

I think the way I respond to that is this.

When I talk about personal achievement and
I think in terms of

an organization like Shell or any other
company I really think it's important.

That as an individual you find a space.

That is motivating to you and is
consistent with your personal principles

with your personal objectives and
that is aligned.

You know I said a moment ago that.

When I went to work in Iran.

I went to work for
the image of what I thought in Iran was.

I learned that Iran was
something different.

And I remember saying to a friend of mine
at one point I said you know I don't this

is before the bankruptcy I said I don't
want to I don't think I'm going to be here

very long not because I didn't work some
really really short really capable people

there were some really sharp very
capable very smart individuals and

that's this was quite fun but
it wasn't entirely aligned with my

own personal values I was I was starting
to discover so I look for ways to avoid

conflict between my personal objectives
and the objectives of the firm when I talk

about being proud to work in the energy
business I really am I do believe that

energy is fundamental It excites me to
know that I'm a part of providing that for

our society I don't see a conflict
there and I encourage you to try.

Define opportunities that
don't provide conflict so

it makes sense.

You are.

Very.

Different.

I don't know if my observation is peculiar
to the fact that it's European versus

American but there are clearly very real
differences in cultures and different in

different organisations if you look at our
organization shell it tends to be more of

a consensus oriented business when I talk
about behavioral norms and cultural values

one is I don't make decisions around
here do we do it by consensus or

do we do it by individual accountability
that is not a moral choice.

Both are perfectly acceptable but I can
assure you have very different outcomes in

the firm and to be more consensus
oriented in a place like X.

I'm more mobile content people
less from census oriented and

I'm not saying is bad saying is different
and I don't know if that distinction

is your opinion as American or not I just
know that there are differences of that

nature.

If not let me present the land with
a movement so he doesn't get this

visit this is a scroll that says scribed
presented in honor of the Philip

sixty six C. J. P. Silas program in ethics
and leadership school of chemical and

biological engineering Georges
to technology to Glen Wright.

Thank you so much.