Inaugural Address

Meeting HR Challenges through Organizational Transformation Processes In the Hydrocarbon Sector

: M.B. Lal , C&MD, HPCL

Presented at HR Round Table organized by ISPe & Presented at HR Round Table organized by ISPe & UPES, DehradunUPES, Dehradun

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Agenda

Hydrocarbon Sector – Characteristics/ Trends

Indian Hydrocarbon Sector – Key Challenges and Imperatives

Implications on HR

Conclusion

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Hydrocarbon Sector – Characteristics/ Trends

Sector lends itself to a globalized economy

Imminent entry of multinationals in Indian downstream little time to get ready to face the formidable competition

Indian oil companies now fully exposed to volatility in international markets Opening up of the Indian economy

Lowering of tariff barriers

Deregulation of the oil sector

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Hydrocarbon Sector – Characteristics/ Trends (contd.)

More stringent environmental compliance norms Implications on funds requirement and efficiency improvement

Sector is an early adopter of developments in ancillary industries Implications on diverse skills required

Most companies in the oil sector have been operating for decades in a protected environment, under Government control Implications on skills, procedures, etc.

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Agenda

Hydrocarbon Sector – Characteristics/ Trends

Indian Hydrocarbon Sector – Key Challenges and Imperatives

Implications on HR

Conclusion

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Indian Hydrocarbon Sector – Key Challenges and Imperatives

Paradigm shift – From an era of assured returns and guaranteed profits, to one of market determined pricing and returns

Key Imperatives Quality, in everything we do

Efficiency & Speed

Customer service, Customer satisfaction

Continuous improvement

Profitable operations

Ability to absorb and thrive in change, faster than competition

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Agenda

Hydrocarbon Sector – Characteristics/ Trends

Indian Hydrocarbon Sector – Key Challenges and Imperatives

Implications on HR

Conclusion

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Implications on HR – Summary

Build a “Competent & Learning Organisation”

Create systems to promote information/ knowledge sharing

Build a “Culture of High Performance”

Decentralise specific HR initiatives

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Implications on HR – Build a “Competent & Learning Organisation”

Given the pace of change, it is difficult to predict what skill sets might be required in the future

Need to educate/ update skills on a continuous basis

Need to eradicate the “fear” in the minds of our people (“We are too old to learn now” syndrome)

More important than the specific skill/ capability itself is the creation of the right environment that will provide our people the encouragement and confidence to adapt/ adopt/ learn

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Implications on HR – Create systems to promote knowledge sharing

Traditionally, Indian companies dependent on experts who “have it all in their heads”

Tremendous challenge to standardize all of this intellectual capital Tacit knowledge

Experience

Know-how which “goes home at night”

Need to transform the above into intellectual assets that remain and work for the company, at all times!

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Implications on HR – Build a “Culture of High Performance”

Need high performance from employees which is possible when employees have Sense of belonging towards the organisation

Desire to perform better

Motivation to take the initiative

Motivation to take decisions

Need to transform our employees toward being “fully self-expressed” individuals

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Implications on HR – Build a “Culture of High Performance” (Contd.)

Role of HR Reward employees who have performed well

Promote culture of opennes and integrity

Develop leadership qualities at every level of the management structure (coupled with empowerment)

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Implications on HR – Build a “Culture of High Performance” (contd.)

Need to change the organisation in the following ways: Reactive Proactive

Hierarchical Collegial

Internally Focused Externally focused

Q: Exactly how do we become a proactive, collegial, externally focused organisation?

A: Only by bringing about a fundamental shift in mindset and attitude of individuals that make up the organisation

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Implications on HR – Decentralise specifics of HR Implementation

Need global policies and global values but local implementation.

HR needs to tailor make it’s policies and rules to facilitate the business unit without jeopardizing the harmonious working of the organisation.

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Agenda

Hydrocarbon Sector – Characteristics/ Trends

Indian Hydrocarbon Sector – Key Challenges and Imperatives

Implications on HR

Conclusion

“The art of progress is to preserve order amid change and to preserve change amid

order”

THANK YOU!