Sources of Power in Leadership

The chairman of Shell Australia, Russell Caplan, has had many careers since graduating from Melbourne University in 1968—but all in one company. Most recently, Caplan led the restructuring of the company’s oil and chemical distribution and marketing into a global business from late 2004. Shell Australia’s profit before interest and tax increased almost 70 per cent, to $1. 23 billion, in 2005 after reforms at Victoria’s Geelong and Sydney’s Clyde refineries added to oil and gas production profits. But Caplan is facing a considerable test in helping Shell’s Gorgon gas joint-venture partners gain final approval from the West

Australian Government for the project, after concerns were raised by the WA Environmental Protection Agency. Here is what he says: ‘In all of my time with Shell, the one constant is change. I say to my people, “You had better get used to it because that’s the way we work. ” The contribution I can make is to express things as simply and clearly as I can. People react positively if they are shown a clear way forward—it doesn’t have to be a new or profoundly brilliant way; it just has to be clear. I find people have difficulty with priority setting, so giving them some guidance makes it legitimate to focus on ome things more than others. ‘When it comes to the challenges of depletion of natural resources and reducing emissions facing the oil industry, the first thing is to recognise sustainable development as a fundamental part of our philosophy. Triple-bottom-line reporting is real for us, not just talk. We would not be involved with the Gorgon project unless we could meet the social and environmental consequences too. I have personal targets associated with my remuneration. Triple-bottom-line reporting is embedded in our company, and that sometimes makes me a little sharp with some people who wish to take he view that we are big industry and therefore we couldn’t recognise those issues. ‘I have been continually surprised and pleased by the opportunities that I have had at Shell, and many were not of my choosing. If I said, when I joined in 1968, “I could have planned this,” that would be fatuous. I think that you should have two principles. The first is do the best you can. It annoys me when people focus on what they are going to do next rather than what they are doing now. I am very attracted to someone who delivers a little more than they say they are going to deliver, a little faster and is very etermined to succeed at what they are currently doing. That is the greatest indicator of what they can do. You also need a sense of good and bad. If you want to be in a legitimate business, Shell is a good place to be. There is a lot of good in Shell … it’s not perfect, but there’s a lot of good and it gives you opportunities. ‘In terms of my leadership style, I can think of a number of influences. I learned the importance of pushing yourself and doing the best you can do. I learnt from former Shell executive and Rio Tinto chairman Paul Skinner the benefit of clarity, consistency and moderation.

I have also learnt something remarkable from my wife; that is, the ability to stick to core values and express them simply. ‘Finally, I am conscious of the fact that I have come back to Australia after ten years away, and it is critically important to my effectiveness as a leader to reconnect with the Australian community, because my role as a leader is to bridge outside and inside. You get very remote if you are living away and following Australia by Internet, as opposed to smelling the dust—and seeing the pain of St Kilda losing. ’ Russell Caplan Position: Chairman Organisation: Shell Australia

Staff: 3200 Direct reports: Four Time in position: Four months Time in company: 39 years Activities for discussion, analysis and further discussion 1 Would you consider Russell Caplan to be an effective leader? Why? What characteristics of effective leadership do you identify in him from the case material above? 2 What characteristics does he appear to value in subordinates who he believes will be promotable? 3 Would you be prepared to work for this manager? Why? Source: Adapted from Tandukar, A. 2006, The good oil, Business Review Weekly, John Fairfax Holdings Limited, 22 June, p. 44.