Shell Boss Wael Sawan on Tough Calls, Regret and Leading Through Uncertainty

Hey everyone, I'm Dylan Dreyer, co-host of the third hour of today and mom to three wild boys. I've learned a lot in my years as a parent, mostly that I don't have it all figured out yet. And I'm not the only one. This is my new podcast, The Parent Chat. Each week I sit down with someone new, Veronica's conversation, and real world advice about parenting. I am over here just like winging it. Hey, I'm just trying not to screw my own kids up. I'm not giving you advice on how to not screw yourself. Search The Parent Chat on YouTube and wherever you get your podcasts. Bloomberg Audio Studios. Podcasts, radio, news. Somebody in the organization made a call. And I respect that. I mean, are we going to get these calls right every day? There's 100 calls we've made to exit stuff that actually didn't end up being successful. Do you regret it or do you deal with what you can control, which is, what do we have ahead of us? I am much more of a philosophy, focus on what you can control. Makes life much easier because then you can actually look forward rather than keep looking back. I'm Françie Lacquois and this is leaders, the podcast that really explores what drives the world's most influential people. This week's episode is Well So On, the chief executive of Shell, Europe's largest oil company. We spoke at the end of last year because when you have an opportunity to speak to the chief executive of Europe's largest oil company, you take it. So the conversation was before the US attack on Venezuela and its capture of President Maduro. And it was also before the US-Israel war with Iran. And while recent events have really upended the global energy industry, so once time at Shell has drawn praise, especially for his focus on controlling costs. Since taking over an early 2023, Shell has out-performed its big oil rivals. As a leader in a challenging and increasingly volatile landscape, I was keen to hear about the moment so one knew he was being considered for Shell's top job, also his controversial choice to pivot away from renewables and his advice on how to be decisive about investment. Well, thank you so much for joining us. Thank you very much, Francine, great to be here. What kind of leader are you? Look, I've learned, I think, through firstly my father to start with people. He, I remember when he retired, he worked for 3M. He sort of said, at the time, business results are important. But when you leave, the number of Christmas amperes you get after you have retired from people whose lives you've influenced will be what actually counts. And so I've always believed you have to start with people. You're an oil executive and I can figure out whether you're even maybe, you know, you get more heats than bankers. Does that bother you? No, it doesn't because I think the issues we're trying to sort of work around are really tough issues. And positions of leadership demand a burden of responsibility. I don't think that should be unexpected. What I need to be able to do is to make sure that my compass is clear. And so I spend quite a bit of time in introspection and reflection. And then it's how to mobilize our organization to deliver. What's that introspection look like? It starts with actually recognizing that the world around us is moving at an incredibly fast pace. Whether it's geopolitical changes that we see at the moment, technological changes with AI, climate. And therefore the world that we have come from in particular, a company like ours, very strong engineering culture in general. We need to move from an all-knowing culture to an all-learning culture because the world is just unpredictable. It's uncertain. It's not linear. As an engineer, does it mean you can take emotion out of it when you problem solve? I think you can, but I don't think that's healthy. I think at the heart of it, and it's one of my own developments, when I get too strategic about things, good counsel from colleagues around me has been great. You're in head mode. Make sure that you also touch into heart mode because I don't think you want to divorce head and heart even when you're making some of these tough decisions. Well, when did you first start being like that? Do you remember the first memory as a child that you already wanted to think was mind and heart? I was the captain of our high school soccer team. I remember the burden of responsibility at that time. We lost the tournament that we were competing for and the challenge of lifting up a group of around 15, 16 people at the time while figuring out how I lift my own self up. I think was one of my first experiences with leadership, but it was addictive. It was great and it was depressing and it was disappointing, but it was all these emotions at the same time. It was a great opportunity then as I grew in my life career. I had more and more opportunities to test that. I remember once being given my first leadership opportunity at a cell and this poor individual who was reporting into me. I tried to apply all of the potential leadership learnings on this one guy. That you learned during your MBA? I learned during my MBA that I'd read a lot about and this poor individual had to succumb to all of the leadership 101. What does that look like? How do I make sure that I am providing him his development plan? How do I intervene to support him on a daily basis? How do I coach? Did he say, "Well, I'm okay?" He was super gentle and he never pushed back. But as I reflected, as I grew in my role, I'm like, "It's poor individual. Must have just been cursing the moment that he got me as a leader." What did you learn about yourself? I actually am that first leadership, raw? I think I learned that I have natural biases. I love to be out with people. I'm an extrovert by nature. But put me into a room on strategic issues and I can focus a lot more on that head than the heart. I also learned around just the way I drive performance in an organization. Finding the right balance of when do I reach in and push hard or when do I step back and create space? When am I more the advocate, the supporter and when am I more the individual who is actually catalyzing a change? Well, I mean, Shell is one of the biggest energy companies in the world. So when do you ever step back and give space? What I've seen in my last three years in the job is I've gone through phases. The early phase was all about really step in and stabilize the company, really get it into the performance discipline that I was hoping we can get to. A leaner, fitter, much more competitive company. We're very clear on the strategy we want to implement. I can now step back more and more and actually do have time to reflect. What are the moves we want to make? Go out, connect with people, be inspired by different ideas from the ones we have internally. I'm finding more and more of that space, but that's partly because we have done a lot of the heavy lifting to be able to get clear on where we want to go. And we've put some terrific people in place to be able to lead the respective businesses and functions. So is a secret to a good manager or being a good leader being able to adapt to the situation? So no one to push and no one to reflect? Absolutely. I saw that early in my career. I had just successfully concluded a leadership role in Qatar at the time. And I assumed that that leadership posture style was going to serve me in a different role when I was going to New Orleans and I was absolutely wrong. I needed to very quickly understand and diagnose what the challenges were, what the opportunities were, what the strength of this team was, and to be able to adapt my style to be able to help them unlock their full potential. After the break, we discussed how while someone prepared for the biggest job of his career. Hello, I'm Stephen Carroll. I'm in Brussels where many of Europe's biggest decisions get made. And I'm Caroline Hepkin in London with the hosts of the Blue Bag Daybake Europe podcast. We're up early every week day, keeping an eye on what's happening across Europe and around the world. We do it early so the news is fresh, not recycled, and so you know what actually matters as the day gets going. From Brussels, I'm following the politics, policy and the people, shaping the European Union right now. And from London, I'm looking at what all that means for markets, money and the wider economy. We've got reporters across Europe and around the globe feeding in as stories break. So whether it's geopolitics, energy, tech or markets, you're hearing it while it happens. It's smart, calm and to the point. And it fits into your morning. You can find new episodes of the Bloomberg Daybreak Europe podcast by 7am in Dublin or 8am in Brussels, Berlin and Paris. On Apple, Spotify, YouTube or wherever you get your podcasts. It's normal to have an inkling you are being considered for a new job, but it's always hard to be sure. It was in Qatar when he held significant leadership roles that someone realized he might be in the running for the top job at Shell. I really wanted to hear about this moment and how he transitioned from the candidate to Chief Executive. When you look at your career, how much of a, I guess, game changer was that big cat or job? It was a huge game changer. The huge game changer. Did you understand at the time that they were maybe testing you to then become Chief Executive? Of course, it was the sort of job that you figured you were on a good track in Shell. I'll be honest with you, it took me a while to recognize and to convince myself that I was in line one day to become the CEO. Because you know, you're trying to do the best that you can in the jobs that you have, but I can tell you almost every single job that I had been given in Shell. I thought there were others who were more qualified than I was. And so it was a great job. created that not a my stomach going into the job, I need to work harder, I need to do better. And so Qatar was one of those moments for me. It was a difficult rule because the two three weeks after I stepped into a rule, we had the safety incident where we lost two of our colleagues. I struggled as a leader because it was under my watch that we had lost those two people, two colleagues whose families I knew and it catalyzes into a different place. It catalyzes into a space where as a group we had to figure out how do we heal and then how do we reach to the stars. So when you have a new job, be it Qatar or then CEO, how do you problem solve? How do you first of all spend a bit of time understanding what you need to fix and then go about fixing it? I spend a lot of time once I know I'm in a new job just meeting with folks both internally and externally to be able to just listen to perspectives where are the value pools, how is Shell doing, what can we do better, what are the benchmarks telling us? I then like to move into a space of actually creating clarity of direction because I find an organization is not at its best without that clarity. And so after that for me is the next step which is really setting that direction. We've done that in my role as CEO, but more and more we linked it to the purpose of what we want to do to become that leading integrated energy company. Shell companies for a lot of moment were also kind of integral to the energy transition. A lot was put on oil companies to make sure that you did your part to become cleaner and greener. Is that fair? I think it's absolutely fair that we along with the multiple other stakeholders have a role to play in the energy transition. So customers have a big role to play, governments have a big role to play, energy producers like ourselves have a big role to play. And what we have found as a company is we have to play to our competitive strengths. So yes, we're very strong in oil, we're very strong in gas, we're very strong in trading, we're very strong in marketing. So how do we take that nexus of strengths that we have and actually contribute to an energy transition that we know is not going to be linear, that we know is going to be complex and how do we become a stabilizing factor for our customers as they try to navigate it? You were speaking very plainly three years ago when you became chief executive, when some of your rivals or competitors were trying to say like, look, we're going to be quite good, actually we're almost renewables company. Were you just more honest than some of your competitors? I think for quite some time what we had been trying to do is maybe speak to multiple stakeholders and unfortunately that can come across as almost being all things to all people. I felt it was really important to one build our own beliefs around the energy system, really get clear what our role was going to be and then just say it for what it was, recognizing that not everyone was going to agree with it, that we're always going to have also a small group of avid supporters and that what was important was for those 80% 70% in the middle. To hear our convictions and then most importantly to see us follow through on those convictions. And so what we wanted to do was to position ourselves as a player that is supporting the energy of today while looking forward and it wasn't about choosing sides. It was about finding the role that we can uniquely play to be able to address energy security, energy affordability and energy sustainability and people I think some would prefer it either this or that and we felt no we are building a company that we want to be the best performing best returning company not just today but for decades to come and therefore it's incumbent upon us to be able to look at not just the energy system of today but to help shape the energy system of the future as well. When we come back I speak to Wellsawon about making decisions and managing regrets. A new chapter in global growth is being written and much of it is happening in Africa. Africa needs to invest. There are deals to be done and business to be won. I'm Jennifer Zabasajep. Every week on the next Africa podcast we track capital flows and political shifts shaping the continent's future. The digitalization of Africa is going to power its growth. Reading the world of something like HIV is possible. Opulation growth is so enormous in Africa. Listen to next Africa on Apple Spotify or wherever you get your podcasts. Big decisions have shaped Sawan's time at Shell. Some before he became chief executive others on his watch. There's a sale of its Permian base and assets for 9.5 billion dollars during COVID which was seen as a coup for the buyer Conoco Phillips and the earlier exit from Guiana before he became one of the world's hottest frontier oil plays. Different moments, different leadership but both raised big questions about long-term value. In 2019 Shell decides to sell your Permian assets. Was that a mistake? No it wasn't a mistake. At the time what we were trying to do it was a very different context. We had a significant amount of debt. We needed to be able to actually pay down some of that debt to become a much healthier company. We had tried actually before the sale of the Permian to look at buying and growing our Permian position. We competed in a couple of different processes and were not successful. So we were getting to the point where our position was just not large enough, not material enough to be able to win. And so what we ended up doing is we sold indeed the Permian and we used some of those funds to be able to pay down debt and continue to strengthen the balance sheet. Today we enjoy one of the strongest balance sheets in the sector as a result of many of the choices that we have been making over the recent years. It could have been a great asset. So is your philosophy no regrets or do you do sometimes think about what could have been? We always look back. I mean every single year I take to my board what we call a post-investment review. It's all the good, the bad and the ugly of where we have invested the choices we have made because it's humbling to be able to sort of look back with the benefit of hindsight and say what went wrong, what went right. Sometimes it's execution. Sometimes it's our view of the strategic lens that we looked at the world through. But it's important to continue to look at that, not to regret it, but much more to learn from it as we look to then build the muscle for the future. Yeah, it talked me about Guiana. It could have been one of the most important assets, right? For Shell regrets there. Look again, I mean we empower people in the organisation to be able to meet budgetary requirements. We just had a couple of wells that hadn't succeeded. Somebody in the organisation made a call. And I respect that. I mean are we going to get these calls right every day? Again, do you regret it or the deal with what you can control which is what do we have ahead of us? And I am much more of a philosophy focus on what you can control makes life much easier because then you can actually look forward rather than keep looking back. Okay, so what can you control now? What you can control is becoming that leaner, fitter, most competitive company. Make sure that you continue to build resilience. Get that balance sheet in a very strong position, get your businesses delivering cash and making sure that you are ready because the world around us is uncertain. We need to be able to actually have the strength to go through the cycles and to generate value and grow through those cycles. That's what we can control. Well, it's bigger, better. I know again that you know rumors of a combination between Shell and BP keep on swirling round and they've been doing so for years. Conceptually with something as big as that makes sense. I don't start from a position that bigger is better. Undoubtedly, they are parts of our business where scale matters, right? Because scale allows you to be able to be competitive. You can spread your resources in some of the areas where you can unlock a bit more value. But scale for the sake of scale is mistaken. Some of the largest MNADs are the least successful MNADs because they are massively complex. So I start more from a place of focus on what your strengths are. If you're ever going to do MNA, firstly set a very high bar, make sure that you can create value from it. And then if you transact, put all of your efforts into making sure that it delivers value. But do it for the right reasons. Don't do it because of FOMO, don't do it because you want to be bigger. Do it because it creates value for your shareholders longer term. We've seen loads of MNA and banking actually fail because the DNA of the culture was different because the teams didn't work together, be it risk-take or something like that. Is it the same for oil companies? Absolutely. I think DNA does matter, culture does matter. And again, it depends on the scale of the aggregation of the companies. But if it's two big companies coming together, I would say culture is one of the biggest things you need to be able to look at. What do you say the culture of Shell is like? So I think our strength has always been the nature of the company is high values. That's one of the reasons I joined Shell. It's a company that focuses on respect, on integrity, but we're trying to evolve the culture further. We want to have more edge in our performance focus. We want to look at leveraging more of the different parts of Shell to unlock value. We call it one Shell, how we are able to truly come together as an organization. So there are elements that play into that. I'd say at the heart of the culture we're trying to make is the point I made earlier on going from an all-knower to an all-learner. Because of our engineering culture, we like to solve for discrete outcomes. And that's what we built. And it's been successful for us for decades, over a century. And as we go into the energy transition, as we go into the world that we're going into, also with the advent of AI and how you leverage AI and what we do with some of the challenges we see on the geopolitical level, we have an opportunity to be able to have the humility that you step back and reflect how do we change? How do we challenge the paradigms we have had in the past? And how do we come up with new ways of being able to steward the company? But if you look at the numbers of how much energy we need also to just face the data centers and AI usage, I mean the numbers are so big it's almost difficult to get your head around it. Do you have to foresee the future or do you need to just react in a way that's in your control? I think you have to have a clear view of the energy system and I would agree with you, Francine. At the end of the day, we see that primary energy demand is going to continue to grow for quite some time. By a lot. By a lot. And it's been happening. I mean, people talk about energy transition. Of course, what we have been seeing is energy addition. We are at peak oil demand, peak coal demand, peak cast demand, peak renewables demand, peak bio demand. The world is trying to get its hands on all forms of energy for many of the reasons that you talked about. So while we cannot predict the future, what we can do is sort of really make some very clear deterministic bets on the future. One is gas for us, for example. You know, we see gas as being a stabilizing force in energy systems that continue to transform. That allows us to be able to, okay, we are one of the biggest, we are the largest international player in LNG and make sure that you continue to play that with lower and lower methane emissions. But really be there to give our customers that versatile, reliable fuel that they seek. Well, what's your north star? So if you look at your day, how much is it meetings, you know, or things that you need to deal with that you could have, or that you want to preempt? And how much of it is actually firefighting? The ratio I would say has swung more and more to actually controlling my own agenda. When you start, you're still learning, you're sort of responding to different stimuli. And now I've had the opportunity to actually shape that. My coach has sort of told me the most important thing you should be doing is to be purposeful. By the way, some of that day is spent having dinner with the kids and my wife, be purposeful and be present in that moment. Another part of the day are about self-exercise gym or of course at work really be purposeful in this meeting. Are we trying to open up people's minds to what's possible in that meeting? Are we trying to address a particular challenge that needs a decisiveness in the moment? Really just being choiceful and purposeful in the way that one conducts himself? I think if I could get to that level of sophistication, then I will feel that the day that I'm spending is worth every minute that I'm spending. Does that have to be in everything you do? So as well the dads and while the CEO. I think in positions like this, it is even more important to be conscious of that purposefulness because it is so easy. You can come back home and your mind is still distracted and thinking about work and trying to be there having dinner but really sort of your mind's not there. You have to be able to actually create the space and the time to be there, to be present. And it's one of the things I continue to work on as a leader. Do your kids talk about climate change? Do they do? They do. Actually it's more from a position of curiosity. They hear different perspectives and they say, "I think I trust you. I'm going to get your perspective on it." So we end up talking about it. We talk about politics. We talk about life. We talk about leadership and they've gotten to an age now where they have a lot more curiosity where they're studying about some of these things and sometimes the studies sort of end up giving a singular perspective. They're keen to be able to understand the broader perspectives. Do you think Shell will be radically different in five years or significantly different? I think the pace at which the energy system is changing means that we will need to continue to evolve. I don't think one should expect a wholesale change of what we do today. I think hydrocarbons will continue to be a big part of what our business is. How we prosecute our business, I think, will change significantly. In Particker we see AI just starting to influence every part of how we work. We have evolved as a company over 135 years and so it's not unexpected to see us evolve in the next five years and in the next 20 years and hopefully we'll be here for at least another 100 plus. What do you want your legacy to be? When I was recruited into this position in the final interview with the board, I said one of the biggest things I hope to be able to leave behind whenever I move on is an organization that is better than what I inherited. And the biggest thing for me has been the people. I do think being able to develop the next cadre of leaders in Shell is one of the things that both excites me the most and I feel most urgently I need to be able to achieve. And the reason I say that what I love about this company is it is an institution. We are all replaceable that the institution and its values outlive you. How difficult is it to groom your possible replacement? I'm spoiled in a company like Shell given the talent pace we have. We have brilliant people. So for us we have very very deep succession planning, we have very deep talent programs. So it allows us to know some of our emerging talent in year five of their 10 year, even if they're in their early 30s to be able to allow us to see who might one day get to the top table and what are the experiences we need to give them to be able to get there and what are the leadership opportunities we need to expose them to. The biggest thing you can do for an institution like this is make sure that you make it stronger when you leave it. If I can do that in my tenure, I'll be very happy man. Well how do you recharge? Exercise. Do gym when I get back from work and I try to make it consistent. Is it difficult to switch off? Not difficult to switch off. I find myself in the right headspace when I need to switch off and I force myself to do so. Good sleep is key. If you had to write a book today, what would it be on? A leadership. I think it would be on just learnings, failings, challenges and what I took away from it. Well thank you so much for your time today. Pleasure. Thank you very much for having me, Francie. Thanks for listening to this episode of Leaders with Me, Francie and Lacqua. If you like our show, please rate, review and subscribe. Thanks so much to those who've left comments. Keep them coming and keep sharing with friends. And if you want to watch the show, please find us on YouTube. This episode was hosted by me, Francie Lacqua. It was produced by Atalanti Dixon, Somersade and Moses and Am. Amy Keen is the executive producer of Talk Podcasts. Sound designed by Black maples and Aaron Casper. Special thanks to Well Soone and the team at Shell. Gain insight on the innovators, disruptors and tech-driven trends shaping today's complex economy. I'm Carol Maser. And I'm Tim Steneveck. Wrap up your workday with the Bloomberg Business Week Daily Podcasts. We bring you deeper dives into the story shaping your world from the evolution of AI to the shifting priorities of global business. 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