Besides being a respected HR leader, I was credible as a business person and that gave Shell the confidence that I could shift from the HR role to the President role
Pay attention to business processes and how they operate and most of all learn how the business makes money
Multi-functional experience should be an essential part of your career development even if it slows down your promotions
Contrary to popular perception, HR and business are compatible with each other because business is about people. You can’t grow a business, form a joint venture or make an acquisition if you can’t handle the people issues. Because finding the right people, recruiting and motivating the right people and helping those people succeed in a new business environment is very much an HR effort. Start-up companies in India and China were successful in identifying the right people to run them.
Transition from HR to business
I studied liberal arts, with a focus on political science which for me was more about looking at the behaviour of people through a political lens than the study of government per se. After completing my education, I was recruited by GE for the management development programme and that gave me the benefit of getting a quick start in a major company that required cross functional assignments.
In addition to having a good early career start in human resources, I also had the opportunity to work in marketing, business development and manufacturing. In my 15 years at GE, I changed jobs and/or businesses 10 times giving me wide exposure to multiple businesses and shaping my overall experience. It was in manufacturing that I learnt how costs and margins make the difference in how businesses succeed. Learning how to manage cost and optimize margins in those businesses gave me a good grounding in how business operates.
From GE I moved on to the human resources department of Northern Telecom and then to Allied Signals which is now Honeywell. And in all my companies, even though I was in the human resources department, I paid close attention to how the business operates, how margin is made and costs are managed. Margin and costs have been a repeated focus throughout my career. Also I learnt over the years, the importance of human resource management, particularly the development of people to be able to manage and lead in these various industrial settings. Later in Allied Signals, I moved to Hong Kong to combination of business development in Asia and human resource management simultaneously.
During the course of my career in aerospace at Allied Signals and during my GE career as well and in my telecommunications business, I had focused on change management and organisational restructuring. In each of those career paths, I was involved in organisational change that would continuously transform businesses from the past to the future and so I developed a reputation in the industry for managing large-scale change efforts and it was that experience that got me the job of Head of Human Resources at Royal Dutch Shell in the late 1990s.
In my eight years as the Head of Human resources at Shell, I came in contact with every aspect of Shell’s business - Oil & gas exploration and production, downstream marketing, distribution and Shell’s renewable businesses, which were start-up activities. In all those eight years, I had global experience across all lines of Shell’s businesses.
And then came an opening for a President in the United States. Having been a credible contributor in the top human resource job, the CEO and the Executive Committee invited me to take the job as president of Shell Oil Company, which included all United States operations of Royal Dutch Shell.
In addition to being a respected human resource leader, I was credible as a business person and that gave Shell the confidence that I could make the shift from the HR role to the President role.
HR in business: Strengths
What I brought from HR side of the business equation was starting with integrity and sound judgements. When you are making judgements about people, you obviously cannot play favourites or be influenced by popularity; you have to have integrity in your judgements. You need to look at all sides of the person, their background, experience and make sound business judgements about people, what are they good at and not good at, what are they capable of, what are they capable and not capable of. These are basic business judgements because they as people are going to carry out the business needs. So I became quite credible of my analysis, assessments and judgement of people’s capability. That’s the root of what human resources does and that’s also the root of most business judgements with people.
So I brought that from the get go as a business leader. I knew people extremely well. I learnt the process of evaluating and assessing people over many years applying all of the best science that human resources had to offer to make that a skill that people could see. So when I interviewed a person I was credible in terms of assessing what that person is capable of or not.
I was always talking with business leadership across the businesses and the functions about the capability of the people that they had and in many cases I knew the people as well or sometimes better than they did. That took a lot of time. On my business travels, I would spend extraordinary amounts of time with the individuals I would meet. And not superficial time, not just hello, how are you. But Hello, how are you, how did you get to where you are tell me about your successes and your disappointments, tell me about yourself. So I would dive deeply into what enables people to succeed or not and would be able to make observations and judgements based on what I discovered.
You should know how to stand your ground. HR has an important role in the business: To be the conscience of the organisation. And because decisions by business people can go in so many different directions as the HR official you need to make a judgement about which direction can be the most successful and like any business manager, stand your ground and not waver in the wind.
I have seen too many HR people waver in the wind, trying to figure out what is the popular choice instead of what is the right choice. Sometimes you just have to go through the difficult pain and anguish of standing your ground even if it is unpopular with other business managers and learn how to take the heat.
Roadmap for becoming a CEO
Early in your career learn how business operates, learn how the business makes money through people, learn about cost structures, about alternative ways of getting work done. Pay attention to business processes and how they operate and most of all learn how the business makes money. Because that is what your business is all about. It is about making money so that the business can succeed and invest in the future through people.
Multi-functional experience should be part of your career development even if it slows down your promotions, requires a lateral or a downgrade. Your career base should involve learning many skills and learning how to make judgements from the perspective of different experiences.
Business is not about the past, it is about continuously adjusting changing transforming for the future, which is all based upon people’s ability to adapt to change. And being on the forefront for educating, developing people for those future changes while participating and learning about how the business makes money, to me is a good formula.
John Hofmeister, former President, Shell Oil Company and Founder & Chief Executive, Citizens for Affordable Energy
As told to People Matters. Excerpts from this interview were published in the June 2013 issue