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Turning Shell around

(China Daily)
Updated: 2008-09-01 07:49

Shell China's Executive Chairman Lim Haw Kuang is unquestionably an effective reformer for Shell China. He localized Shell China's leadership team with Chinese employees going from zero to a majority in three years, and engineered the turnaround of Shell's business in China.

"Ninety eight percent of my colleagues are Chinese, 99 percent of my customers are Chinese, and 100 percent of government officials are Chinese, how long do you expect me to wait for the localization?" says Lim who has visited virtually all of China, save Guizhou province.

"Our lubricant business, which consists of 100 percent of Chinese employees in China, accounts for the second largest of Shell's globally."

But when Lim headed for China in 2005 to assume the helm for Shell China the company was bogged down in several large projects including a natural-gas pipeline it was working on with PetroChina and CNOOC.

In a recent interview, Lim Haw Kuang talked with China Business Weekly Zhang Qi about Shell's growth and success in China.

Q: Would you like to relate your personal experience to reflect the changes in China?

A: My first experience in China in 1996 was as a visiting overseas Chinese here on business for Shell. When the plane touched down, I couldn't wait to touch the soil. The first stop was Beijing. There were lots of bicycles, and very unfriendly service. Now you can see places that are mixed with eastern and western elements, you can find service that is absolutely first-class.

The way people dressed was pretty ordinary at that time. But now when you go to a shopping mall in Shanghai or Beijing or other major cities, you can imagine yourself as well in anyplace like New York or London. The business mindset has already changed. The mindset about receiving subsidies from the government has also changed.

But there is one thing that has not changed. I have visited more than 30 provinces in China, even these poor and remote areas. There is one thing they all have in common - the focus on education. It is fantastic.

Q: How did Shell influence and how was it influenced by its joint venture partner? Could you provide an example?

A: Our HSE (health, safety and environment) standards and practices in the Changbei gas project with PetroChina in Yulin, Shaanxi province have been showcased by our partner in their internal communications as an example of the best HSE practices. And we also learn from Chinese companies that have unique operational expertise and work jointly to deliver more synergies. For example, when we acquired Tongyi lubricants, we knew that it had a more efficient commercial model and operational process. We kept the management team, the business model and process from Tongyi after the acquisition.

Q: What do you think the challenge for Shell in China is now?

A: When you come to a country or a market, you need to understand their priorities and values. When I became the executive chairman of Shell China, I gave the same reply. (The) $40 billion (we have invested in China) is a drop in the ocean. we are one of the world's top energy companies and we should work hard but we are not doing enough.

The challenge is also about the future leaders for the future organization. You need become quite focused on people's efforts. This year, I will spend 50 percent of my time on managing people.

For me, the future of success is not about money, it is about people. I hope when one person mentions Shell, he will say that's a good company with good people.

Q: China is in pursuit of a more rational and efficient mode of growth. How can Shell China better get involved in such a drive?

A: Over the last 30 years China has experienced dramatic economic growth. Some people are asking when China will become the largest economic country in the world? Do you notice the question is not "if" but "when"?

By 2050, the world population growth will rise by 50 percent, but the energy demand will double. If you look into the future, traditional energy such as coal and oil will still be the dominating energy-consuming source. Therefore, traditional energy will not be enough to meet the additional huge demand.

It is a global thing. But China might have more serious burden because China has the largest population in the world, and primarily bases its energy consumption on coal.

We want to be the leading international oil company contributing to the economic prosperity of China and our customers in a sustainable manner. If you look at Shell's energy priorities, energy supply security, environmental protection and energy efficiency are three things we have done constantly.

Q: As we know, you engineered the turnaround of Shell's business in China, could you share the secret of the success with us?

A: Three years ago when I started to head Shell China, there were no Chinese in the country's coordinating team (core management team). But now there are 10 Chinese staffers out of the 16 members of the team. This is very aggressive process.

But when you want to localize your talents, you also have to internationalize them. I need Chinese talents who can also learn all the international expertise and who can compete internationally.

Q: What do you think your biggest achievement will have been when you leave China?

A: If everyone in Shell is very proud of Shell and himself or herself by the time I leave. If I can do these things, I will be the happiest man in the world.

(China Daily 09/01/2008 page6)