Grassroots Leadership - Royal Dutch/Shell

Our transformation program got started because headquarters and the operating companies couldn't agree on how we were going to adapt to a rapidly changing world. How would we respond to the Information Age? We needed something to give us an energy transfusion and to remind us that we could play at a more competitive level. Shell has always been a wholesaler. But every service station represents a commercial opportunity that any retailer would envy. Our task was to tap the potential of that real estate, and we needed our frontline troops to pull it off.

Can you describe the grassroots program you developed?

We brought six- to eight-person teams from a half-dozen operating companies worldwide into an intense "retailing boot camp." One example, from Malaysia: In an effort to improve service-station revenues along major highways, we brought in a cross-functional team that included a dealer, a union trucker, and four or five marketing executives. The first five-day workshop introduced the model and the leadership skills the team would need to enlist coworkers back home, and prepared the participants to apply the new tools to a local market opportunity. That could mean improved performance at filling stations on the major roadways in Malaysia, or selling liquified natural gas elsewhere in Asia.

Then those teams went home - while another group of teams rotated in. For the next 60 days, the first set of teams worked on developing business plans. Then they came back to boot camp for a peer-review challenge. At the end of the third workshop, each team sat with me and my team in a "fishbowl" to review its business plan, while the other teams watched. The peer pressure and the learning were intense. At the end of that session, the teams went back for another 60 days to put their ideas into action. Then they came back for a follow-up to analyze both breakdowns and breakthroughs.

How do you know it's working?

Because we're seeing results all around the world. For instance, our business in France was in terrible shape. We were in the red and losing market share. The advent of hypermarkets had changed the game, and we weren't responding effectively to this new competitive threat. Fifty percent of our retail fuel market disappeared in two years! We either had to find a way to become profitable and to grow, or we had to exit - because the way we were going, we couldn't stay in the game much longer.

Now, if you asked the leader back in headquarters, "What's the answer?" the honest response would be "I don't know." What we did instead was bring together a cross-functional team from France, provide the people on it with resources to analyze the problem, offer them a business model to help them understand retail competition better - and then challenge them to come up with ways not just to survive but also to grow.

In January, I got a note from the marketing manager of our retail business in France. The business had just closed its books for 1997. It recorded double-digit profitability, exceeded its growth target, and expects double-digit growth for 1998. More important, the manager told me that when he and his coworkers started to work on the problem, they were terrified. They didn't know how they could solve it. Now they believe in themselves. As a result of this effort, they've got a whole new company.

The truth is, it's scary as hell at the beginning. It's scary for me. It's scary for the team. But the track record has been incredible.

What makes grassroots leadership scary for you?

First, it's scary to put myself on the line with my peers. I was no longer playing the classic "managing director" role. I spent a lot of my time working with these grassroots teams - and that's a pretty big gamble. This thing had to come off. Otherwise, 18 to 24 months later, I could have egg all over my face. I could see my colleagues thinking, "Okay, you held workshops. Sure, the teams got a little excited - but how much really happened?" If you go through all that and France doesn't turn around, it's pretty scary.

Second, I feel strongly about the people I've trained and sent back to their businesses to make things happen. Those are my people, not just abstractions in an HR report. It's the same feeling you have as a teacher, a coach, or even a parent. You've done what you can to prepare them - but now they've got to go and do it. You want to do it for them, you want to make it all come out right - but you can't. What you can do is feel for them.

Finally, the scariest part is letting go. You don't have the kind of control that traditional leaders are used to. What you don't realize until you do it is that you may, in fact, have more control - but in a different form. You get more feedback than before. You learn more than before. You know more through your own people about what's going on in the marketplace and with customers than before. But you still have to let go of the old style of control.