The Rising Demand for Leaders
Our research has confirmed that the key strategic capability for organizations across the globe is leadership, and companies in the oil and gas industry are no exception to this rule. But thousands of the oil and gas industry’s most experienced technical leaders must be replaced over the next three years as they reach retirement, and not enough new leaders are reaching the required levels fast enough. This exodus of skilled personnel and the increasing reliance on younger, inexperienced colleagues – known as the Big Crew Change – will leave a gaping hole in leadership capability across the industry.
Recruitment cutbacks during the recession of the 1970s and 1980s have created an industry devoid of a generation of geoscientists and petroleum engineers. Oil and gas majors are striving to fill this gap by hiring young talent, a task made especially challenging in places like GCC (Gulf Cooperation Council) countries by the limited supply of experienced locals and the drive towards nationalization.
Organizations are taking a long-term view to hiring and retaining local talent, but they must also start thinking strategically about leadership development. One central challenge is recruiting enough talent for future succession, but an even more complex challenge is preparing these new recruits for senior leadership roles in the next 5 to 10 years. Some companies will view the Big Crew Change as an HR headache, but more forward-thinking, resourceful companies will treat it as an opportunity to create a new generation of leaders—fast.
What Can Egypt Offer?
The good news is that Egypt is particularly well suited to develop local leaders in the oil and gas industry. The country’s population demographics and positive feelings towards the oil and gas industry serve as a good start on the path to leadership development.
Leaders across all sectors make comprise about 8% of most country’s workforce. In most countries, finding the right number of leaders to fill those posts is a relatively easy task. This is the case with Egypt, as it does not suffer from a small local population from which to nurture a new generation of leaders. Countries like Qatar and the UAE, on the other hand, possess relatively small number of nationals and large expatriate community, which makes local leadership development much more challenging.
Second, the oil and gas sector in Egypt, and specifically the engineering profession, does not have to overcome the same negative stereotypes that the industry faces in other countries. Our research with oil and gas companies in GCC countries illustrates that recruiters struggle to overcome the negative perception that engineering jobs are excessively “difficult” and “dirty”. Similar perceptions of the industry and the engineering profession do not appear to be as prevalent in Egypt.
Whatever the exact case may be, it is clear that more studies need to be done on the perceptions of the Egyptian oil and gas industry. Additional studies will allow companies to attract the right employees who will stay with the company long enough to assume leadership roles later in their careers.
Teach it, and They Will Come
The good news is many of the attributes of sound leadership can be taught, particularly at senior levels. While certain leadership traits come naturally to some, Oxford Strategic Consulting has found that fundamental traits such as positivity and empathy can be learnt. This means that Egyptian leaders in the oil and gas industry can be developed through a process.
The first step of the process is to define, develop, and encourage the specific traits needed by Egyptian leaders. The second step is to define and develop the experiences needed to produce these leaders. The third step is to encourage and reward leadership behavior. The final step is to monitor and assess the outcomes of leadership. Of course, if the oil and gas industry wants to be a main beneficiary of leadership development, then companies must take a more proactive role in the collective development of future leaders equipped with industry-specific skills.
This leadership development process can take many forms, but education is the key enabler for developing leadership capabilities. Programs aimed at teaching leadership skills can ensure that young Egyptian boys and girls benefit from an early age. Moreover, educational programs geared toward leadership will place young Egyptians in a better position to be fast-tracked into top roles once they leave school.
There are other shorter-term approaches to help develop potential. For example, the consultancy we work for is designing a smartphone app that helps leaders get the very best from their teams.
What Motivates Future Egyptian Leaders?
Every country has distinct advantages when it comes to developing leaders, and this is reason for optimism. For example, our research found that one of the most promising advantages for leadership development in the UAE is that young Emiratis express a great deal of national pride.
In a survey of Emirati high school students that we conducted as part of a major research project, we asked students what motivated them. “Helping the country” and “contributing to society” proved the two strongest motivating factors for these students. Therefore, we concluded that oil and gas companies could both attract and develop future leaders by realigning their employer messages and demonstrating how local leadership within the oil and gas industry can benefit the UAE.
Egypt certainly possesses distinct advantages in developing leaders, but there has not been enough research exploring these advantages. We believe that the Egyptian oil and gas industry would benefit from more research that explores the particular social and cultural factors that shape leadership development in Egypt. Similar research that our consultancy has performed for BP in the UAE and Oman has been extremely helpful for the company’s recruitment and development approaches.
Oil and gas companies can also invest in research that examines the Egyptian leadership style. Our company is currently conducting similar research in the UAE and Saudi Arabia and part of a larger research initiative on the Gulf Arab leadership style. Egypt will certainly have a different leadership style than the countries in the region. The consequent Egyptian leadership style would be consistent with national identity and culture and provide the basis for a huge number of young Egyptians to very quickly become effective leaders.
For this reason, oil and gas companies should be spearheading research on the Egyptian leadership style. Not all of the leaders in such a research initiative will come from within the industry, but the research will show the industry’s commitment to leadership development. Most importantly, pioneering the research will place oil and gas companies in a position where they can fully benefit from the investment in the next generation of leaders.
Work Towards “Green Leadership”
Egyptian oil and gas companies must work together to create local, renewable, and sustainable leadership in the industry.
First, we believe that local talent is often preferable to comparatively skilled expatriate talent, and this is especially true of those in leadership positions. Companies that fill leadership roles with local talent benefit from organizational leaders who truly know the language, culture, and history of their region. At the same time, local leaders serve as role models to a potentially much wider circle of family, friends, and colleagues within their respective societies.
Second, leadership must be more easily replenished in the industry. This is no easy task as leaders are a rare caliber of people; however, investing in local leadership development can result in a renewable cycle of leaders. Research demonstrates that people who spend more time around leaders, especially close friends and family, are more likely to become leaders themselves. In other words, leadership is contagious.
Finally, the future success of the oil and gas industry in Egypt depends on sustainable leadership. While expatriate leadership is sometimes necessary, we do not believe that importing leadership is ultimately sustainable, cost-effective, or efficient. Investing in local leadership development is the solution for the oil and gas industry’s oncoming leadership problem. The best ways of solving this problem will be the subject of our next research project.
By William Scott-Jackson and Robert Mogielnicki, Oxford Strategic ConsultingDownload