Somebody in the organization made a call, and I respect that. I mean, are we going to get these calls right every day? There's 100 calls we've made to exit stuff that actually didn't end up being successful. Again, do you regret that or do you deal with what you can control, which is what do we have ahead of us? And I am much more of a philosophy. Focus on what you can control. Makes life much easier because then you can actually look forward rather than keep looking back. I'm Francine Lacqua and this is Leaders, the podcast that explores what drives the world's most influential people. This week's episode is Wael Sawan, the chief executive of Shell. That's Europe's largest oil company. We spoke at the end of last year before the US attack on Venezuela and its capture of President Maduro and the more recent US-Israel war with Iran. And while recent events have really upended the global energy industry, Sawan's time at Shell has drawn praise, especially for his focus on controlling costs. Now, since taking over in early 2023, Shell has outperformed its big oil rivals. And as a leader in challenging an increasingly volatile landscape, I was keen to hear about the moments Sawan knew he was being considered for Shell's top job, his controversial choice to pivot away from renewables, and his advice on how to be decisive about investment. Wael, thank you so much for joining us.
Thank you very much, Francine, it's great to be here.
What kind of leader are you?
Look, I've learned, I think, through firstly my father to start with people. I remember when he retired, he worked for 3M. He sort of said at the time, business results are important, but when you leave, the number of Christmas hampers you get after you have retired from people whose lives you've influenced will be what actually counts. And so I've always believed you have to start with people.
You're an oil executive, and I couldn't figure out whether you're even maybe, you know, you get more heat than bankers. Does that bother you?
No, it doesn't, because I think the issues we're trying to sort of work around are really tough issues and positions of leadership demands a burden of responsibility. I don't think that should be unexpected. What I need to be able to do is to make sure that my compass is clear. And so I spend quite a bit of time in introspection and reflection. And then it's how to mobilise our organisation to deliver.
What's that introspection look like?
It starts with actually recognising that the world around us is moving at an incredibly fast pace, whether it's geopolitical changes that we see at the moment, technological changes with AI, climate and therefore the world that we have come from, in particular a company like ours, very strong engineering culture in general. We need to move from an all knowing culture to an all learning culture because the world is just unpredictable, it's uncertain, it's not linear.
As an engineer, does it mean you can take emotion out of it when you problem solve?
I think you can, but I don't think that's healthy. I think at the heart of it and it's one of my own developments when I get too strategic about things, good counsel from colleagues around me has been great. You're in head mode. Make sure that you also touch into heart mode. Because I don't think you want to divorce head and heart even when you're making some of these tough decisions.
Well, when did you first start being like that? Do you remember the first memory as a child that you already wanted to think with mind and heart?
I was the captain of our high school soccer team, and I remember the burden of responsibility at that time. We lost the tournament that we were competing for and the challenge of lifting up a group of around 15 or 16 people at the time while figuring out how I lift my own self up. I think was one of my first experiences with leadership. But it was addictive. It was great and it was depressing and it was disappointing and but it was all these emotions at the same time. And it was a great opportunity. Then as I grew in my life career, I had more and more opportunities to test that. I remember once being given my first leadership opportunity at Shell, and this poor individual who was reporting into me, I tried to apply all of the potential leadership learnings on this one guy that you learned during your MBA. That I learned during my MBA that I'd read a lot about and this poor individual had to sort of succumb to all of the leadership 101. What does that look like? How do I make sure that I am providing him his development plan? How do I intervene to support him on a daily basis? How do I coach?
Did he say, Wael, I'm ok.
No, he was super gentle and he never pushed back. But as I reflected, as I sort of grew in my role, I'm like, poor individual must have just been cursing the moment that he got me as a leader.
What did you learn about yourself actually in that first leadership role?
I think I learned that I have natural biases, right? So I love to be out with people. I'm an extrovert by nature, but put me into a room on strategic issues and I can focus a lot more on that head than the heart. I also learned around just the way I drive performance in an organization, finding the right balance of when do I reach in and push hard, or when do I step back and create space? When am I more the advocate, the supporter, and when am I more the individual who is actually catalyzing a change?
But Wael, I mean Shell is one of the biggest energy companies in the world. So when do you ever step back and give space?
I'd say what I've seen in my last three years in the job is I've gone through phases. The early phase was all about really step in and stabilize the company, really get it into the performance discipline that I was hoping we can get to a leaner, fitter, much more competitive company. We're very clear on the strategy we want to implement. I can now step back more and more and I actually do have time to reflect what are the moves we want to make, go out, connect with people, be inspired by different ideas from the ones we have internally. I'm finding more and more of that space, but that's partly because we have done a lot of the heavy lifting to be able to get clear on where we want to go. And we've put some terrific people in place to be able to lead the respective businesses and functions.
So is a secret to a good manager or being a good leader, being able to adapt to the situation so know when to push and know when to reflect?
Absolutely. I saw that early in my career. I had just successfully concluded a leadership role in Qatar at the time, and I assumed that that leadership posture style was going to serve me in a different role when I was going to New Orleans. And I was absolutely wrong. I needed to very quickly understand and diagnose what the challenges were, what the opportunities were, what the strength of this team was, and to be able to adapt my style, to be able to help them unlock their full potential.
It's normal to have an inkling you're being considered for a new job, but it's hard to be sure. It was in Qatar when he held significant leadership roles. That Sawan realized he might be in the running for the top job at Shell. I wanted to hear about this moment and how he transitioned from the candidate to chief executive. When you look at your career, how much of a, I guess, game changer was that big Qatar job?
It was a huge game changer, right? A huge game changer.
Did you understand at the time that they were maybe testing you to then become chief executive?
Of course, it was the sort of job that you figured you were on a good track. And Shell, I'll be honest with you, it took me a while to recognize and to convince myself that I was in line one day to become the CEO because, you know, you're trying to do the best that you can in the jobs that you have. But I can tell you, almost every single job that I had been given in Shell, I thought there were others who were more qualified than I was. And so it created that knot in my stomach going into the job. I need to work harder. I need to do better. And so Qatar was one of those moments. For me, it was a difficult role because the two, three weeks after I stepped into a role, we had the safety incident where we lost two of our colleagues, and I struggled as a leader because it was under my watch that we had lost those two people. Two colleagues whose families I knew. And it catalyzes into a different place. It catalyzes into a space where as a group, we had to figure out how do we heal and then how do we, you know, reach to the stars.
So when you have a new job, be it Qatar or then CEO, how do you problem solve? How do you, first of all, spend a bit of time understanding what you need to fix and then go about fixing it?
I spend a lot of time once I know I'm in a new job, just meeting with folks both internally and externally, to be able to just listen to perspectives. Where are the value pools? How is Shell doing? What can we do better? What are the benchmarks telling us? I then like to move into a space of actually creating clarity of direction because I find an organization is not at its best without that clarity. And so after that, for me is the next step, which is really setting that direction. We've done that in my role as CEO, but more and more, we linked to the purpose of what we want to do to become that leading integrated energy company.
I mean, oil companies for a lot of you know, moment was were also kind of integral to the energy transition. A lot was put on oil companies to make sure that you did your part to become cleaner and greener. Is that fair?
I think it's absolutely fair that we, along with the multiple other stakeholders, have a role to play in the energy transition. So customers have a big role to play. Governments have a big role to play. Energy producers like ourselves have a big role to play. And what we have found as a company is we have to play to our competitive strengths. So yes, we're very strong in oil, we're very strong in gas, we're very strong in trading, we're very strong in marketing. So how do we take that nexus of strengths that we have and actually contribute to an energy transition that we know is not going to be linear, that we know is going to be complex? And how do we become a stabilising factor for our customers as they try to navigate that.
You were speaking very plainly three years ago, right when you became chief executive, when some of your rivals or competitors were trying to say like, Look, we're going to be quite good actually, we're almost renewables company like, were you just more honest than some of your competitors?
I think for quite some time what we had been trying to do is maybe speak to multiple stakeholders and unfortunately that can come across as almost being all things to all people. I felt it was really important to, one, build our own beliefs around the energy system, really get clear what our role was going to be, and then just say it for what it was, recognizing that not everyone was going to agree with it, that we're always going to have also a small group of avid supporters, and that what was important was for those 80%, 70% in the middle to hear our convictions and then most importantly, to see us follow through on those convictions. And so what we wanted to do was to position ourselves as a player that is supporting the energy of today while looking forward. And it wasn't about choosing sides. It was about finding the role that we can uniquely play to be able to address energy security, energy affordability and energy sustainability. And people I think some would prefer it's either this or that. And we felt, no, we are building a company that we want to be the best performing, best returning company, not just today, but for decades to come. And therefore, it's incumbent upon us to be able to look at not just the energy system of today, but to help shape the energy system of the future as well.
Big decisions have shaped Sawan's time at Shell, some before he became chief executive, others on his watch. There's the sale of the Permian Basin assets for $9.5 billion during Covid, which was seen as a coup for the buyer, ConocoPhillips and the earlier exit from Guyana before it became one of the world's hottest frontier oil plays. Different moments, different leadership, but both raising big questions about long term value. In 2019, Shell decides to sell the your basically Permian assets. Was that a mistake?
No, it wasn't the mistake at the time what we were trying to do. It was a very different context. We had a significant amount of debt. We needed to be able to actually pay down some of that debt to become a much healthier company. We had tried actually before the sale of the Permian to look at buying and growing our Permian position. We competed in a couple of different processes and were not successful. So we were getting to the point where our position was just not large enough, not material enough to be able to win. And so what we ended up doing is we sold indeed the Permian and we used some of those funds to be able to pay down debt and continue to strengthen the balance sheet. Today, we enjoy one of the strongest balance sheets in the sector as a result of many of the choices that we have been making over the recent years.
It could have been a great asset. So is your philosophy no regrets or do sometimes think about what could have been?
