By Nataša Kubíková
Cost reductions in the oil sector seem to hit hardest human resources (HR) departments. In Egypt, this practice is argued by many to be detrimental to the companies themselves. Others point out that this approach may undermine economic prospects of the entire country as the oil and gas sector is strategic for Egypt and forms a core pillar of its future development.
In response to the recent call for cost reduction in training schemes, announced by the Egyptian Ministry of Petroleum and Mineral Resources, two oil companies, Middle East Oil Refinery (Midor) and Tharwa Petroleum Company, decided to alter parameters of this arrangement. Midor and Tharwa jointly reached a conclusion that in spite of the current economic dynamics, which is greatly discouraging many oil companies from investments in people development, they will revisit the existing leadership development structures.
The two companies embarked upon a massive scale assessment and strategic planning to address the problem and find solutions. They chose to gather their existing resources and amend the training scheme in order to reduce their training budgets, while at the same time secure the continuation of people development program. These steps were taken under the leadership of Dr. Hanan Abd El Moniem, HR Executive General Manager at Midor, who is a certified trainer educated through multiple schemes abroad. Tharwa’s Training Manager, Rania Helmy, and two Training Section Heads, Sara El Gamal and Dalia Tawheed, also reviewed their internal training plans. Having assessed company’s extensive facilities, Tharwa offered to host joint education sessions for the entire period of the program duration, in addition to the available professional environment, Tharwa has provided logistical management and facilitation. These coordinated measures made it possible for the joint Midor-Tharwa team to apply all envisioned methods in people development program for the benefit of their employees and companies’ output.
As Dr. Abd El Moniem and Rania Helmy confirmed, this would not have been possible to realize on a full scale if it was not for the support, enthusiasm, experience, and encouragement that Midor’s Chairman and Managing Director, Dr. Mohamed Abdel Aziz, and Tharwa’s Chairman and Managing Director, Geol. Adel Mohamed, provided them with.
The two companies thus created an internal, complex Integrated Management Development Program (IMDP) as a high quality education platform that promises significant cost reductions. IMDP cuts across different professional levels, addresses top, middle, and low management employees, seeking to improve people’s performance, increasing company’s profit, and securing sustainability in volatile periods. It has undoubtedly generated extensive benefits for both companies, as the two HR leaders told Egypt Oil&Gas, adding that this pioneering project was enabled thanks to Dr. Abd El Moniem’s broad experience from Egypt and abroad, as well as her unique capability to “think out of the box.”
Loyalties Overruning Qualifications
Based on the assessments, Dr. Abd El Moniem identified the scope of deficiencies in HR in the petroleum sector in Egypt. She has observed that there has been no significant modification to the promotion schemes for several decades. Performance efficiency and result oriented evaluation of employees were not the key parameters for selecting suitable managers to run different segments of oil companies. Until now a selection of many oil companies’ management posts are based on loyalties as in the number of served years rather than on qualifications. Dr. Abd El Moniem concluded that there is an urgent need to address this issue.
Another problem appeared to be that oil companies’ budgets for training was relatively low to satisfy the needs of educating low, middle, and top level management employees in key decision-making tasks. This made it almost impossible for companies to develop relevant skills of their employees, and secure themselves with a pool of qualified representatives, as Sara El Gammal, Training Section Head at Tharwa Petroleum Company noted.
In the case of Midor and Tharwa specifically, appointed managers were fully competent, unlike the routine practices suggest, yet “a lack of skills, knowledge of new techniques, and modern tools was noticeable,” added El Gammal.
The outlined IMDP thus aspires to build upon current capabilities of companies’ managers and department leaders to expand their repertoire of managerial techniques for them to be able to take over responsibilities as future leaders.
Two Key Modules
The program as designed by Dr. Abd El Moniem has a broad strategic potential. All employees in the middle and top-level management posts are to undergo specifically tailored training scheme entitled ‘Leaders for Tomorrow.’ The key aim is not only to help expand capacities of current managers and their deputies, but in fact to build up a roster of promising candidates who will be well equipped to take over key positions in the oil companies in the near and far future. The scheme consists of ten modules with different sets of courses, and the most relevant are Strategic Planning, Change Management, and Crisis Management.
The program further develops another set of modules dedicated to young generation of employees. ‘Young today, Boss tomorrow’ is a platform that attracts new generation of graduates to join oil companies, while guaranteeing their prospects within the companies’ hierarchies. The scheme outlines a clear path for their professional development that will give them a valuable opportunity to progress.
The complexity of the IMDP is unprecedented in Egypt, according to Dr. Abd El Moniem. It is planned with a clear vision, and elaborated strategy, and implemented through modern methodology.
In addition, the program targets other employees through cross-disciplinary training courses such as knowledge of the legal framework in Egypt, work ethics, communication strategies, and others.
As Dr. Abd El Moniem confidently noted, “we are planning to conduct 121 courses in different modules in 2016 alone divided per month, while each course takes between three to five days.” Sara El Gammal added that as of April 2016, Midor and Tharwa conducted more than seven courses within and without the key modules including Effective Report Writing and Etiquette, Strategic Management and Creative Thinking, Leadership Skills, Self-Development Management, Pension Scheme, Creative and Critical Thinking, Change Management, and others.
The modules and taught courses are developed in line with the schemes provided by the Oil&Gas Skills company (OGS), a training center under the Egyptian General Petroleum Corporation (EGPC), with a clear goal to further amend leadership development structures and expand opportunities for skills training in Egypt. Dr. Abd El Moniem explained that the Midor-Tharwa training program is to further “support the OGS, as a sister company, to provide additional courses.” Therefore, in cooperation with OGS, Midor and Tharwa started developing Certified Manager (CM) program already last year and to date consumed almost 50% of the overall budget earmarked for the purposes with positive achievements.
Investments in HR
The two companies later decided to involve Team Misr in the process, as an external professional training company with more than 40 years of experience in the region. It was selected to conduct relevant training in the Arabic language. Team Misr shares the approach promoted by Midor and Tharwa. They are jointly alarmed by the fact that training expenses of oil companies in the region is the first item to be reduced in companies’ budgets in times of crisis. Investments in HR training are perceived as futile.
Yet, “the oil sector in Egypt plays a vital role, one that pulls the economy behind it, [therefore] mistakes being done in oil companies means a lot of wasted resources,” emphasized Amr Helmi Sallam, Deputy General Manager and Business Development Manager at Team Misr. He added that “if the mistakes continue and costs of wrong decisions become catastrophic.”
“We believe that more efficiency would lead to lower costs, and more efficiency will happen through better training,” stated Deputy GM. The IMDP promises to focus on the management capacity development. It is designed to help fill empty gaps on a leadership ladder in oil companies. Limited number of trained succession alternatives may otherwise put oil companies’ future at risk. It is therefore imperative to create a focused succession strategy, Amr Sallam stressed. He further claimed that “if we are moving away from the idea of having a single leader in a company to an idea of having a group of leaders managing different divisions, there will be better performance and more effective and efficient decisions.”
Seeing through a comparative lens, Deputy GM at Team Misr argued that “during the international financial crisis that took place several years ago, some companies invested more in training as they discovered that many of their managers and leaders were not equipped to handle the crisis efficiently.”
Whereas this rise of awareness was witnessed in other countries, in Egypt, an aptitude for changing the ways in which oil companies approach the concept of people development programs remains to be challenging, according to Amr Sallam. However, “in Midor and Tharwa I found a different mentality, believing in the role of training, introducing new techniques in management, and in human resources development,” he added.
Focus on Complexity
Coming in with an optimistic vision that is achievable and realistic in a short-term and promises long-term impact, Dr. Abd El Moniem’s role is to contribute to the establishment of a viable and sustainable framework. It is therefore necessary to go beyond the training sessions, as she noted.
Firstly, from a short term perspective, “we insist to target the implementation of acquired skills in actual workplaces [while still in training], which is a guarantee of success,” explained Dr. Abd El Moniem. This is based on a preliminary assessment, which showed that participants’ performance in their respective workplaces improved as to their attitude, behavior, and focus, shortly after the training. This approach promises to boost the use of the existing potential of oil companies hidden in human resources that have been left unnoticed on previous occasions.
Secondly, in a long term projection, “looking for quality and efficiency” in management performance necessarily comes with efforts to prepare new people for leadership in the future, said Dr. Abd El Moniem in the interview with Egypt Oil&Gas. El Gammal further stressed that this complex program will reach beyond improving people’s skills. It will majorly enhance overall assets of the companies and their outputs. It is therefore important to amend promotion schemes in oil companies. The goal is to define clear rules for management promotions, and specify criteria for selection of managers based on the value of their deliverables, not loyalty.
In return, setting clear promotion criteria will help to feed in identifying specific needs of people development programs and thus develop a comprehensive HR strategy for the entire sector. The methodology that Midor and Tharwa applied will come with required “cost reduction” for training. As Dr. Abd El Moniem explained, in their case, cost reduction has been achieved thanks to “a purposefully developed synergy between two major oil companies and OGS that allowed a meaningful transfer of knowledge.”
Following the Synergy
In the sector, however, “the largest challenge still appears to reside with the top management of oil companies and their commitment to the development for the future. Therefore, the idea is to frame the effort, which produces measurable success, as an agreed set of procedures applicable on the national level,” said Dr. Abd El Moniem. Therefore, while highlighting further advantages of the designed Midor-Tharwa program, Dr. Abd El Moniem also added that it may serve as a viable model to be explored further by the Oil Ministry in favor of all industry actors.
Meanwhile, with a commitment to transfer Midor-Tharwa synergy into the entire Egyptian oil & gas sector, Dr. Abd El Moniem reached out to present the program to other companies such as ENPPI, and entities like EGPC as well as Cairo and Suez universities. Dr. Abd El Moniem was also approached by other companies such as SUMED to implement the training program in Alexandria as of July 2016, which she is eager to pursue. Similarly, Tharwa announced that it was open to new cooperation with other companies and to provide them with their training facilities, as the HR department is convinced of the success that the training introduced, according to El Gammal.
“The success of this program rests on a carefully detailed program, positive synergy between Midor and Tharwa, active participation of all trainees, and most importantly the companies’ CEOs’ commitment to contribute to the development,” Dr. Abd El Moniem told Egypt Oil&Gas.
Undoubtedly, the importance of HR investments by oil companies is beyond counting. As Amr Sallam concluded eloquently, “you can invest in equipment, in technology, you can invest in your facilities, but if you do not invest in people working with these equipments, then all your investments have become worthless.”
Midor and Tharwa are thus engaged in successfully building a role model that may inspire and instruct other Egyptian firms to follow suit.