Empowerment through Innovative Strategic Management
By Nataša Kubíková
Midor&Tharwa tandem appears resolute in its intention to enhance human resources capacities of the two companies in order to withstand the current oil price environment. Both teams continue implementing a tailored Leadership Development Program (LDP) in cooperation with Team Misr intensively.
The aim of the program “within the strategic oil and gas sector in the country is to build up a second generation of leaders that will be better suited to take over responsibilities” when the time paves the way for new business possibilities, Deputy General Manager of the training company Team Misr, Amr HelmiSallam, said. He further added that the LDP, which “is lacking in most of Arab organizations,” is a necessary prerequisite for oil companies to be able to achieve sustainability.
The LDP structure, as it is outlined, promises significant improvements in terms of human resources (HR) development. It consists of several modules. Most recently, Midor&Tharwa have launched a set of courses within the first module – Strategic Management and Creative Thinking.
At the onset, they introduced participants to the concept of Strategic Management. Dr.HananAbd El Moneim, HR Executive General Manager at Midor, the key figure behind the massive HR development program, noted that the core of Strategic Management resides in three key elements – vision, mission, and objectives. Therefore, the training sessions focused on “the processes of formulating a vision, developing a mission, and elaborating achievable objectives for each and every department of the two companies for a year ahead,” added Dr.Abd El Moneim.
“Strategic Management thus enables industry companies’ leaders to meet the needs of greater empowerment within the organization,” as Deputy Manager of Technical Planning Department at Midor, Ayman Elmohandis, who took part in the training, pointed out. The courses thus may boost the position of a company in both the local and global markets.
The most significant components of the Strategic Management courses, however, teach trainees alternative business approaches. One of them is the skill “to develop suitable criteria for choosing right objectives for our future as a company and our partner Tharwa, which are based on integrated analysis of the current environment,” said Ayman Elmohandis.
Deputy GM of Team Misr, Amr Sallam, explained further the content of the courses within this module. They evolved around “the idea of planning for short and long terms, the concept of having SMART objectives, and the importance of forming a vision for the future.”
The goal of the sessions was to practice new skills in strategic planning, which require capabilities to generate “a set of various alternatives on a board [matrix] and an informed skill to be able to evaluate them applying a strategic lens,” said Amr Sallam. He further revealed that “Team Misr has brought to Midor&Tharwa new elements of the training with a focus on innovative techniques such as SWOT analysis and the Balance Score Card, the most advanced strategic management tool for a quantitative comparative analysis.” Moreover, “the participants have also learned to apply the Boston Consulting Group matrix, which is useful for evaluating a set of different products by placing them in a matrix and assessing their value individually as separate business units,” Amr Sallam concluded.
“The training provides something new as it is built upon up-to-date tutorials and relevant case studies from around the world. It thus aspires to modify the way of thinking among oil and gas industry leaders,” emphasized Dr.Abd El Moneim.
The course presented further processes implicated in Strategic Management and Creative Thinking, yet, the core objective of the course was “to develop awareness about a hierarchy of strategic goals that can help an organization achieve inevitable coherence in its strategic direction,” stated Ayman Elmohandis from Midor. In line with this, “the role of corporate governance that establishes a hierarchy between owner’s interest and employee’s interests is critical,” explained Midor’s Deputy Manager of Technical Planning Department.
This approach leads to considerably raising “awareness that can enhance a corporation’s innovation strategy,” Elmohandis added, which in return, can further boost company’s outputs in terms of economic variables.
Joint Training Projects
Participants are also expected to identify joint training projects, which they choose to pursue. After completing the course, they return to their workplace and try to implement their newly acquired skills in a period of one month through pre-defined development projects related to their departments; be it technical, organizational, operational, or managerial.
At the training, participants are “required to apply all the relevant tools to analyze a problem [in their companies], reach to the root cause of the problem they wish to address, and develop alternative solutions, said Deputy GM of Team Misr, Amr Sallam.
Participants have to justify why they chose to tackle a specific area for development and assess concrete benefits that their intended projects would bring to their companies. It is therefore important that “we teach them to apply formal research tools on the projects,” according to Amr Sallam. “In a final stage, they are thus able to evaluate different solutions in order to employ the best one,” he added.
DM of the Technical Planning Department at Midor, Ayman Elmohandis shared his thoughts about the process saying that “instead of letting participants deliver different projects, which may not be relevant to our operations, we had the idea that we gather some of the main issues that our companies face. Each trainee then chose an idea and turned it into a project to develop it further, based on what s/he learned in the entire module.”
“By the end of the course it was already established that there will be a project delivered by the participants either individually or in groups,” Ayman Elmohandis, specified. Midor&Tharwa teams thus end up having between four or five fundamental projects that will be designed to improve structures and processes in different areas of the two companies.
This complex approach allows Strategic Management training attendees to develop their own innovative plans. According to Ayman Elmohandis from Midor, “we have hopes that the commercial department will succeed in developing ways to find new resources of income within the scope of our operations. We are thinking of introducing trading of products and storage as a supplement activity to our refinery and production projects. We will elaborate on it through the tools we have learned in the course to be able to see if it is feasible already now.”
He further revealed that “representatives of the two companies’ administration departments at the training were thinking about enhancing the organizational structures and job descriptions. They will conduct a case study in one of the departments to make necessary assessments.”
The overall aspiration is “to use creative methods to develop the projects, and also to be able to support them in the future,” said Ayman Elmohandis. “The idea of implementation processes for each project will be clearer with time,” he noted.
Real Time Contributions
The projects identified by Midor in the training modules will be needed as the company is planning to undergo a major expansion in the near future.
“In Midor, we are in the process of preparing an expansion; we are increasing the capacity of our production by 60%, from 100,000b/d to 160,000b/d. It is a huge investment. We are talking about $1.4b so far,” revealed Ayman Elmohandis.
“The time is critical for doing this [expansion] as there is deficit in supply in Egypt and the need for all the petroleum products is high to cover the local demand satisfactorily,” said Elmohandis, however, other external factors and circumstances may likely affect the implementation of the training project.
Nonetheless, “the proposed investment plan is a necessity for us as a company,” added Elmohandis. “The matter of expansion is crucial, it is essential, it is big,” as he put it. The expansion objective is also important in line with most recent requirements that were introduced globally and oblige refineries to adopt the latest EURO V specifications for their products. “EURO V requires us to modify our products, and thus will lead our expansionist vision for us to be able to supply our products to the local and the Mediterranean markets as demand arises,” Elmohandis revealed.
In Egypt, “our company provides about 40% of the local demand of diesel, gasoline 92, gasoline 95, jet fuel and other products. We are a huge player in the Egyptian market, whose demand for petroleum products is skyrocketing. In the last five years, we almost halted our export operations because of that. Therefore, it was a major decision to take this step now towards a plan to increase our capacities,” explained Elmohandis from Midor.
“These decisions and steps that we are trying to take in order to implement our vision for expansion is the real application of the matter of strategic management and strategic change,” said Ayman Elmohandis. “We are developing the vision and the mission further in a dynamic flow, trying to adapt to the current circumstances that are changing regulations and with them the entire business environment in Egypt,” he concluded.
New Feasible Strategies
Participants from Tharwa had a positive response to the training that introduce them to “the processes of how to analyze and set a strategic plan for tackling problems in the company,” said SherineSallam, PR Assistant General Manager, one of the attendees from Tharwa.
Furthermore, as SherineSallam confidently stated, the program succeeded in showing different useful tools to apply strategic planning. “We know how to make our objectives realistic. This is the key as it is hard to materialize certain goals and targets. We trained techniques how to think out of the box, and how to apply the presented tools such as how to formulate an economically feasible strategy and find solutions to different problems. This will replace the practice in which writing up a set of targets was the key element, however, these were not realistically achievable,” SherineSallam shared her positive evaluation of the module.
In addition, Tharwa will also likely benefit from the Strategic Management module in a long run. In terms of training projects for Tharwa, they formulated one that can produce realistically applicable solutions for instance in the area of budgeting in PR department, as SherineSallam noted.
“The plan is to alter the existing budgeting structures built on an old model,” while reflecting on the processes and techniques of Strategic Management, she said, adding that “previously there has been no clear strategy, and the company has expanded in terms of performing more activities, having more employees, seeking more benefits. Yet, these are currently not existing at Tharwa’s PR department,” revealed company’s PR Assistant GM Sallam.
It is therefore within her department that SherineSallam will seek “to build better benefit structures for employees, introduce strategic planning for what we need for the next five to ten years in order to develop a successful company. This will come with larger inputs that promise more safe employees with more benefit packages that will make people’s jobs more interesting.”
As she concluded, the training offered participants an opportunity to absorb how productive the process of creative thinking is as they had a chance to observe new business tactics and “develop ideas for different business activities [still feasible and even beneficial] despite the fact that the price per oil barrel dropped. In Tharwa, for instance new opportunities for some of our concessions emerged in the stock exchange, or by diversifying our outputs,” SherineSallam noted.
There is no doubt that Tharwa will thus also likely benefit from the Strategic Management module in a long run.
The evidence of this real-time implementation of Strategic Management and Creative Thinking skills is thus convincingly showing that benefits of similar training modules are beyond just useful. They are essential. As they become visible almost immediately, it can be expected that in a long run the potential of the entire Egyptian oil and gas sector will likely boost further.
Transfer of Knowledge
The courses, held in the premises of Tharwa, were organized as a series of debates among participants from the two companies. The Midor&Tharwa duet clearly demonstrated that there exists a large potential in creating friendly environment for open discussions.
The joint practical approach adopted by Midor&Tharwa comes as a pioneering attempt. “It is a new form of cooperation between petroleum companies Midor and Tharwa. It is considered as a forum that included different perspectives,” noted Ayman Elmohandis. Such a friendly platform is thus likely to generate an enormous space for “an exchange of ideas and thoughts about what can be done in the current industry environment,” as he added.
According to Dr.Abd El Moneim, “trainees are very cooperative and you can see, already in the course of sessions, a beneficial transfer of knowledge among participants” that are no longer divided into a Midor group and a Tharwa group, but rather work to merge the differences in a search for common solutions.
The key unifying element is to learn a new skill “to open your mind for exploring new possibilities,” said Midor’s Department’s DM, Elmohandis. “Usually in trainings in the petroleum sector there is no major opportunity to be sitting down in a joint discussion and interact between two different companies. This is one of the key benefits of the course,” noted Ayman Elmohandis. Openness among participants emerged step by step, as a process of snowballing, when people slowly started producing ideas, commenting on each others’ inputs in both sectors; as Midor is a refining company, and Tharwa is an exploration and production firm,” he clarified.
“Introducing an integration of discussions and theoretical training will help facilitate the matters of change in the future for both companies,” said Midor’s attendee, Ayman Elmohandis. He further stressed that “the strategic management is a continuous and dynamic process, because important issues related to it evolve around managing individual processes, while simultaneously trying to reach a desired vision for a company as a whole.”
Vision for the future
The program feeds into “a global trend to enhance employee’s skills through continuous education schemes, which is essential in order to prepare a company to face its competition,” as Ayman Elmohandis further explained.
The success of the Midor&Tharwa story rests on a variety of internal and external factors. The Heads of both Midor and Tharwa showed their support for the LDP, without which the implementation would see major obstacles. Team Misr’s leader, Amr Sallam, therefore, cannot hide his positive surprise that during the training sessions, “both CEOs came to the training rooms, talked to people, and stressed the importance of this education scheme.”
Immediate, positive effects of the training program, which the two companies adopted for the first time, were unmistakable, elaborated Dr.Abd El Moneim, when “Midor and Tharwa employees understood that we care about them and prepare them for the future by showing them a plethora of available opportunities.”
The training environment thus introduced different cultures of internal governance in the two companies, which was previously an unusual sight in the Egyptian oil sector, as participants engagingly disclosed. Therefore, having positive expectations for companies’ future success in the local and global markets are no longer reduced to mere hopes, rather, through the Leadership Development Program, they have transformed them to become tangible and achievable strategic visions.