A shift like this does not come easily; it means changing the way titles are assigned, careers are planned, recruiting is organized, and executives spend their time. But so far, it is yielding remarkable results. Here, in the words of four key participants, is the story.
Context for a New Approach
HAGER: When I joined Devon in an operating role in 2009, after a period when I’d served on the company’s board, we were facing some big challenges. We had just gone through the financial collapse of 2008. Oil and gas prices, which had been as high as US$120 a barrel, had fallen significantly. I think there had been an expectation in the energy industry that prices were going to stay high forever. Instead, reality was sinking in.
We were in the position of being relatively unhedged against an energy price decline, which was not a good thing, and of having more promising projects than we were able to fund.
Historically, we had tremendous capabilities on land, having been the first to commercialize horizontal drilling and hydraulic fracturing in the Barnett Shale. It struck us that the right thing to do was to divest our deepwater and international assets — which we ultimately did, netting $10 billion pre-tax — and to refocus our efforts in North American onshore.
In doing so, however, we were changing our strategy: ending our reliance on acquisitions and focusing on organic growth, where you really need people who are skilled, comfortable leaders. Going forward, our success would depend less on technical experts and more on broadly experienced business leaders who could foster high levels of engagement and productivity.
Yet, over the years, we had developed an organization that wasn’t sharing its best practices as well as it should. Our business leaders tended to know their area of expertise extremely well, but did not always know what others were doing — and didn’t have the perspective that comes from working in multiple domains. We tended to promote employees based only on technical competency, and we didn’t give people any leadership training. Once we realized this approach was no longer adequate, we began working to change our practices and reenergize the company.
RUDOLPH: Devon had been a company with a very strong culture and leadership ethic, but it was scattered; there were siloed practices and a real desire to raise the talent game in a consistent and coherent way. When I was recruited to come here in 2007, my view of HR fit naturally with what Devon’s leaders wanted to do.
My view of HR is not typical in the field. I started my career in operations, and maybe that’s why I take a skeptical view of conventional best practices. For instance, many HR experts believe that line managers should directly drive HR processes, like succession planning and career development plans. They think the role of HR is to create tools and processes for other people, “partnering” with the business unit leaders to get things done. That doesn’t sit right with me. Accountants don’t go to the rest of an organization and say, “We want to partner with you to do accounting.”
We decided to act on the belief that HR professionals should run all people-related processes — coaching, succession planning, recruiting, career planning, and talent management. They should define the goals, measure the outcomes, and be accountable for achieving the company’s core strategy of having a distinctively capable workforce. This required a higher investment level than HR typically gets, but we were also aiming for higher returns. Instead of trying to get costs down, we would approach HR as a highly refined, high-touch service function that would benefit our employees in a way that was critical for our company’s growth.