HR is vital to organisational success, says Shell’s outgoing chief HR officer, Hugh Mitchell – but it shouldn’t matter who knows about it
Hugh Mitchell, Shell’s chief HR and corporate officer, is in a reflective mood when he speaks to People Management from his office in The Hague. He’s just a few weeks away from leaving his employer of 36 years and entering a long-planned-for retirement. But first, he’s got some wisdom to impart. Mitchell joined Shell in 1979, working his way up to become responsible for the firm’s 94,000 staff, who are based in more than 70 countries. He tells us about taking the long view, what his friend Dave Ulrich’s famed business partner model has done for HR’s profile, and why you should never underestimate your employees.
How has HR at Shell had to adapt to cope with the recent fluctuations in oil prices?
In my industry, you’re always playing with an HR agenda across multiple horizons. We’re a long-term business, so the investments you’re making today might not pay off for seven to 10 years. That means you can’t play talent on a short-term basis – you have to constantly look through the economic cycle and ask: what is our long-term demand?
When you’re in a downturn, you need to ‘defend the hill’ – the things that are long-term critical to your organisation. For me, those are graduate recruitment, technical development and learning, and leadership development. But you’ve also got short-term pressures to cope with – you have to reduce costs and improve efficiency.
Many technical specialists are being drawn to young start-ups instead of traditional employers. Has this ‘war for talent’ affected you?
I don’t relate to the idea of a war for talent. The market does change, but globally there is no shortage of highly qualified, competent technical talent. Certain markets are constrained, but in others, such as India, there’s a huge supply. You have to make sure that your hiring strategies are broad enough so you can capture the talent wherever it is.
You’ve been at Shell for your whole working life. Is the concept of a single organisation for life still valid?
It’s less common, but I don’t think it has disappeared completely. What has disappeared is the notion of selling it. The idea that you show up at a university anywhere in the world and say ‘join us and stay with us for 40 years’ – that would probably have students running from the building. The reality is, when you recruit people and you develop them, you might find that a lot of them do stay for their whole career. That continues to be our experience. Once people have been here five to seven years, the vast majority of them will stay – assuming their career’s working.
Should HR be demonstrating its business value through metrics?
I think it has much to do with belief systems. If you start with a belief system that says ‘leadership doesn’t make any difference’, then I think you’re in the wrong movie. But if you believe that getting leadership right makes a difference, the question then is: how much do I spend on that? And how much do I try to focus my investments in leadership for the maximum possible return?
There are many efficiency measures you can use for people but, for me, it starts with identifying what differentiates your organisation from others. Then you make sure you invest consistently [in line] with that. I spend a lot more money investing in the development of a petroleum engineer than I do in that of an HR person. That’s because if I am short of engineers, I have to buy them from other companies, usually at a high cost. HR is an important skill, but if I don’t have the right mix of people I can go and buy HR talent from any sector. That means it has a differentiated value to me as an employer, so I tailor the investment.
What’s your assessment of the evolution of the HR profession?
Over the past 10-15 years, the function has been dominated by a drive for efficiency – through IT, offshoring or outsourcing work and focusing on process excellence. We’ve also seen a deepening professionalism of the function, and we’re now moving on to ‘added value’ type conversations.
To me, a lot of that [work] is overly focused on the individual, and not sufficiently focused on the collective. We are constantly trying to get the maximum out of a single individual unit. We are much weaker when it comes to questions of: how do you organise people? How do you engage and motivate them collectively, so that you release the discretionary effort that exists in all of us?
What irritates you about how HR presents itself?
I think it is far too apologetic. In some ways, Dave Ulrich – a friend who I’ve known for many years – hasn’t helped by introducing the whole ‘business partner’ language. I don’t find the engineering manager or the marketing manager calling themselves a partner. A bit of me says: we just work here. We come in every day – we’re a cog in the wheel that drives the success of the organisation. We do too much navel gazing, too much trying to define our relationship to the company. We should just get on with it a bit more.
What’s the biggest mistake you’ve ever made at work?
There are many, but the ones that stick with me are when I’ve underestimated or categorised people. When I was working in industrial relations, we had a strike in a refinery in the 1980s. One of my jobs was to drive an old fire engine around the site in the evenings, to check it was working. I went to talk to the people who were picketing and a man grabbed me as if he was going to attack me. But he was the usual driver of the fire engine, and he was upset because I was crunching its gears. The lesson for me was: this guy is on strike, but he cares more about this piece of equipment than what they were on strike about. You should never assume that people don’t care about the organisation they work for as much as you do.
Read more from our interview with Hugh Mitchell – from the future for expat talent to how you can transform HR – at peoplemanagement.co.uk
Hugh Mitchell will be giving a keynote address at the 2016 CIPD Annual Scotland Conference on 3-4 March. Find out more at bit.ly/CIPDScotland16