Craig Walker, CIO for Shell downstream, advises IT professionals to shed the analytical person’s habit of “being impatient with people not seeing things the way you do”.
Walker is one of a group of global CIOs at Shell who set the oil and gas giant’s technology strategy. Downstream is about the refining of crude oil, processing natural gas, and distributing oil and gas products. Walker sees his primary role as that of demonstrating leadership to the IT function, developing his team to move to a commerce first vocation.
For CIOs who make the shift from a departmental to a corporate leadership role, there is often a transformative experience in their personal history. In Walker’s case, there are two – the first on the football pitches of Colombia, and the second doing high-level strategy with KPMG.
Walker recounts how he played for a Shell-sponsored football team when in his early thirties in Colombia. The coach was a former Brazilian professional and gave Walker a specific job to do, protecting the back four as defensive midfielder. Walker came in for a telling-off when he abandoned his position, despite scoring the winning goal in one game.
“You’re not a striker, you got lucky – that could have gone the other way. Do it again and you’re dropped,” he was told.
“Everyone on a team is good at something,” says Walker. “Do that well and trust your team mates” was the lesson he learned: the strengths of each are used for all.
“You are only as good as the team you have, so you have to invest time in your team”
Craig Walker, Shell
Within that, Walker says he most often uses a Nelson Mandela dictum, which featured in the film Invictus – based on the story of the victorious South African rugby union side in the 1995 World Cup: “Inspiring people to be better than they themselves believe they can be.”
“My role is to inspire, whether inside or outside Shell,” says Walker. “To do that, you need a basic like of people, and tolerance. You have to grow out of being impatient with people not seeing things the way you do. You need to understand, for instance, that different opinions about the same data stem from having had different experiences.
“You have to make time for people instead of just driving forward. There is a danger as you go up the ladder that you don’t take time with people. You are only as good as the team you have, so you have to invest time in your team.”
Walker, who joined Shell in 1981, spent almost seven years at KPMG, which he describes as “the best training course I’ve been on”, adding: “It taught me so much about the way companies run, and how to handle strategic change across sectors, from FMCG [fast moving consumer goods], through aerospace to government. The basic thing is when there is a problem, nine times out of 10 it is because you fail to take people on the change journey.”
Remaking of Shell and IT
Shell is the product of the union of Royal Dutch Petroleum and Shell Transport and Trading in 1907. One of the leading companies of the second industrial revolution – based on chemicals, electrification and the advent of telephony – Shell has its place in the fourth, as an overall energy company, not just in oil and gas, but also in renewables, says Walker, and in a basic shift from product to services.
He sums up the scope and scale of today’s Shell: “About 450km of our bitumen is laid on roads every day. We are the biggest maker and seller of lubricants in the world. Every 12 seconds, we refuel an aircraft at 900 airports. We have 45,000 retail sites vending 200 billion litres of fuel a year and selling 30 million customers 250 million cups of coffee.”
Walker dates the origins of this shift beyond traditional oil and gas to 2004, when Jereoen van der Veer was CEO. Walker, who joined the company as an IT analyst/programmer directly from the University of Surrey with a degree in chemical engineering, recalls: “We started to globalise in 2005. Before that, we were national and regional, and we recognised the world was globalising around us.”
Shell’s IT function at that time did not have the scale or the people necessary for globalisation, he says. And so the organisation had a series of outsourcing contracts with Accenture, Wipro, IBM and CGI. “Over time, this had a cost impact, and some of our people looked good because they were surrounded by smart consultants, and we stopped learning,” he says.
In 2014, Jay Crotts came in as group CIO under Ben van Beurden as CEO and, with the CIO team, changed that picture. They moved to having four IT hubs near the company’s chief assets in Houston, London, the Hague and Bangalore. The company now has five CIOs under the group CIO, for upstream, global functions, new energy, and projects and technology, as well as downstream, which is Walker’s area.
They conceived the new structure in early 2015, launching it in September 2015. The Bangalore hub has gone from zero employees to 2,500, with 900 reporting to Walker. “There is such talent there,” he says. “It is cost advantageous, yes, but the key thing is that it is young talent, excited by technology. Elsewhere, we had strategists, supplier managers and programme managers. The technology is moving so fast now that we needed a different cadre.”
Bangalore has helped Shell rebalance its skills, says Walker. Three years ago, the critical business IT skills would reside with consultants; now they are in-house.
Commerciality is another key element, he says. “You have to understand how your part of the business makes money. It’s not about mere business IT alignment; it’s about value.
“The CFO is not there because people [on the board] don’t know how to add up. He or she is there because of an understanding of the business, based on the numbers. My IT people have to be the same.”
Salesforce agile at Shell
Walker is the executive sponsor for Shell’s use of Salesforce’s software as a service. They had, he said, been “a bit amateurish in their prior use of Salesforce, so we now have a proper contract in place that is based on a two-way strategic conversation”.
Walker sees the virtue of the technology in the hands of business users, in its agility. “I can get people to do what I did as a programmer in the 1980s – mock things up rather than produce static PowerPoint or Word documents,” he says.
Salesforce is a strategic partner for Shell, he says. “You have to make some bets and go with companies that share a common vision.”
Walker says he likes Salesforce’s 1-1-1- model, whereby it gives 1% of its people’s time, its profits, and goods to good causes. And he likes the fact that it stays true to its sales automation core. “They know what they are good at,” he says.
Read more on CIOs and business transformation
Salesforce’s technology is used across the entire Shell business, from the lubricants sales people building plans and selling to customers with details to hand via Salesforce visualisations, through to the energy traders on the big trading floors in Houston, London and Singapore, as well as the smaller ones in Moscow, Tokyo, Dubai, Rotterdam, Barbados, and Calgary.
Some 80% of Salesforce use is in downstream, 15% in global functions, such as HR and legal, and the rest is in the upstream business, says Walker.
Shell likes to use Salesforce as a wrapper in front of its SAP ECC6 ERP core transactional system, says Walker. There is a plan to move to SAP’s S/4 Hana ERP, but he says: “The scale and speed I need to run my global SAP [estate] is such that S/4 not there. I have 70,000 full-time staff plus many contractors using our global SAP instance. It is colossal. We need 24/7 uptime. You don’t have that with S/4. We have a strategy to get there, but we could not go there tomorrow.”
But the company does use the Hana in-memory database for “fast analytics, behind the trading systems”, says Walker. “But even there, doing a fall back on two Hana boxes with terabytes of data is very expensive.”
Above all, the new IT requires the right people, he says. “You need good architects to be successful with these tools, and data specialists for the data, which is so important. And good change management [professionals] too. People have to be taken on a journey to what they need. The very speed of technology change is changing our jobs. If you don’t help people go through that, they will not use the technology to the full. Architects, data specialists and change professionals are, for me, the new elixir to make it all work.”