KNOWLEDGELIBRARY

July 2013www.shiftINpartners.com

– Case Study –

FUELING STRATEGIC TRANSFORMATION AT EMIRATES

NATIONAL OIL COMPANY

By Salah Al Galadari, Himanshu Verma, and Rafael Lemaitre

long-term), and hammer out a strategy. ENOC, they determined, would aim to be “a leading regional integrated oil and gas group that was highly profitable and socially responsible toward its employees, community, and environment.” Integral to that strategy was ENOC’s mission to fulfill Dubai’s growing energy needs.To implement the strategy, ENOCneeded the right mechanism. Beyond just an execution framework for implementing and monitoring the strategy, top leaders understood they would need a robust change management process, a capability-building effort, and a strategic governance mechanism.

A Big Bang Approach

ENOC adopted the Balanced Scorecard (BSC) in 2009. Khoory’s familiarity with the BSC, along with its successful use by regional peers, helped influence its choice as the company’s strategy management methodology. Leaders participated in training sessions to learn how to create strategy maps and the scorecard and how to develop and refine its components—the objectives, measures, and key performance indicators (KPIs). They identified strategic themes for each of the four perspectives in ENOC’s strategy map. At the top, beneath the company vision statement, are six overarching strategic goals, including “Align with UAE energy needs and contribute to economic development” and “Expand to new markets and enhance competitive positioning by leveraging supply chain strengths and brand image.”

Recognizing that cascading the strategy across an organization as siloed as ENOC could be tough, leaders decided to take a “big bang” approach—cascading the corporate strategy map and scorecard as quickly as possible to the business-segment and business-unit levels. So from the outset, with the help of an external adviser—and the hands-on participation of the CEO—ENOC

leaders created 24 strategy maps and scorecards. (Since then, strategy maps and scorecards have also been developed for the company’s support units—human resources, finance, and shared services.) To facilitate vertical alignment, ENOC created an “alignment matrix,” as well as a set of common KPIs for each scorecard perspective were also created to foster alignment across

business and support units. Among them are: ROCE and “adherence to budget” (for the Financial perspective); “number of new markets entered” and “energy business plan completion” (for the Customer perspective); the Environmental, Health, and Safety (EHS) index (for Internal Process); and “emiratization” and “employee engagement accountability index” (Learning and Growth).

Winning Hearts and Minds

Implementation was not without obstacles. Initially, some segment and business-unit heads resisted the change. Some were discouraged at the prospect of losing their autonomy and having to live under what they feared would be a new bureaucracy. Others bristled at the idea of having their performance evaluated on anything other than revenues. Still others simply questioned whether the BSC, and not some other methodology, was right for the company.

To overcome the resistance, Khoory and his deputies instituted intensive in-house training and workshops for managers. Perhaps the most important step in giving the new system traction was establishing Strategy Delivery Office (SDO). Formed in 2010, the Business Planning and Performance Management (BPPM) office serves as both change agent and internal strategy delivery function. Officially, it carries out four roles: architect, governor, coordinator, and leader of strategy planning and execution, which includes all elements of BSC design and execution. The office also has overall responsibility for budgeting and business planning and for ensuring linkage

between planning, operations and execution. Today, the 12-person office reports to ENOC’s Group Chief Financial Officer.

Among BPPM’s most pivotal activities was launching the strategic awareness and communications efforts and linking individual and team performance to strategic objectives. It has executed both in partnership with HR.

Fueling Strategic Awareness

Executing strategy requires the understanding and support of everyone in the organization, from the CEO to the manager of the retail service station. ENOC’s leaders knew in the early stages of implementation that they needed to inform all employees—not just those constructing and overseeing scorecards--about the company’s strategic priorities, objectives, KPIs, and targets. In a broader sense, they also realized that implementing the BSC system involved much more than implementing a new methodology; this was classic culture change. And culture change requires ongoing education and communication, as well as reinforcing mechanisms that link individual, departmental, and unit performance to organizational performance.

As part of ENOC’s four-year roadmap to embed the BSC within the company’s culture, leaders developed a variety of education and communication programs to promote awareness. ENOC sent 40 senior and middle-level managers

to BSC master classes. It also sent the BPPM (the internal SDO office) and its support team (BSC champions distributed throughout the company) to the Kaplan-Norton BSC certification program. And it conducted training programs for BSC coordinators who support the BSC system by providing performance data and analysis. In the past two years, approximately 200 staff members have received in-house training on these areas. Complementing the education programs is a broad array of communication materials and forums. ENOC distributes informational brochures and materials on the corporate strategy and BSC concepts to all employees. An intranet portal features such information along with definitions and performance updates (The Performance Management team has its own portal for knowledge management purposes, with company strategy maps and scorecards, as well as best practices for benchmarks, external and internal strategic analysis, competitive information, presentations, training materials and manuals, guides for target-setting, and more.). Every year, some 300 staff members convene at the annual Strategy Communication Event. Stories on the BSC program and strategy management appear in the company magazine Insight, which is also circulated to external stakeholders. And ENOC participates in regional seminars, workshops and events with other BSC users, including BSC Hall of Fame winners such as Dubai Electricity and Water Authority and Dubai Aluminum Company.

Instilling Accountability

Successful organizations recognize the value of using a variety of incentives and reinforcing mechanisms to promote buy-in and accountability. At the business-segment and business-unit levels, ENOC instituted performance contracts, which establish a contractual commitment between the segment or unit and corporate to execute strategy and achieve targets. (Executive directors and other senior executives, as owners of these contracts, are evaluated and incentivized based on larger goals beyond their specific BSC, such as expanding a business or pursuing additional cost savings). Similarly, the company established service-level agreements (SLAs) between support units (such as the Shared Services Center) and the businesses they support. SLAs are an integral part of the support-unit BSCs. In addition, the company instituted performance agreements—the contractual equivalent of its performance contracts—between individuals and their departments. This is the main tool to link individual performance to company strategy, and has been a powerful means of gaining buy-in from the managerial ranks. The agreement ties individual performance to scorecard objectives. Eight KPIs from each manager’s unit scorecard are incorporated into his or her individual performance plan. Each manager is also ranked overall on four behavioral values: teamwork, customer focus, performance orientation, and commitment to continuous improvement. The performance results are used to determine merit increases and bonuses. Every employee, regardless of level, is evaluated against targets, and undergoes an annual performance review.

The Payoff Thus Far

Managers’ initial apprehensions about a strategic transformation were put to rest, as the benefits, both hard and soft, quickly began to accumulate. Between 2008 and 2012, as the world economic remained lackluster, ENOCs revenues grew 17.5% and its profits 62%. Profit per employee increased 95 percent during that period—a powerful indicator of the new link between employee performance and corporate performance.

Beyond its impressive financial results, ENOC has enjoyed significant improvements throughout its other performance dimensions. Employee engagement, for instance, jumped

Everyone knows that transforming an organization is a huge undertaking. Making the case for transformation can in itself be a major challenge, even when the need is clear and urgent. But when the status quo is sound—when revenues are robust and operations are running smoothly—instigating change can be an uphill battle. Why tinker with success? Such was the case at Emirates National Oil Company (ENOC) in 2008. Founded in 1993, the $15.6 billion (2012 revenues) downstream oil and gas company was enjoying healthy revenues. All across its five business segments—from its Supply, Trading and Processing business to its Retail arm, business was booming. Dubai and its sister states seemed immune to the volatility and uncertainty that struck Europe and the U.S. in the immediate aftermath of the global financial crisis. For ENOC, a company driven almost entirely by financial results, there was little reason for change.

The CEO’s Rallying Cry

But CEO Saeed Khoory saw the situation differently. A newcomer to ENOC, Khoory believed that ENOC could ill afford to be complacent about the future—not with a rapidly changing, increasingly uncertain global economy. In his view, volatile oil prices, dwindling margins, and speculation about the economic outlook for the UAE signaled the need to consider a shift in strategy. ENOC could continue its course of maximizing revenues, or it could expend time and resources fortifying its strengths for long-term success. It was difficult to gauge the impact of the financial crisis on the global oil market.

But this was a crucial issue, given that Dubai (which lacks petroleum) must buy oil on the world market—and that the company’s underlying mandate (as a company indirectly owned by the government of Dubai) is to provide for the energy needs of its rapidly growing country.

ENOC’s business segments—Supply, Trading and Processing, Terminals, Marketing, Retail, and Other Ventures and Investments—had long operated with near-total autonomy. CEO Khoory felt that it was time to align these chiefly autonomous, siloed segments and businesses under a unifying strategy to better capture synergies and sharpen ENOC’s operational excellence. If the company could align internally, it could also begin to consider aligning with many of the energy consumers that are its key customers. Such alignment would help both parties mitigate inherent market inefficiencies and boost their oil purchasing power.

At the time, however, the company had no formal strategic plans or strategy management tools. Oversight was limited, and there was virtually noalignment between or among units.

Operational excellence was ENOC’s competitive sweet spot. The company’s ability to pursue and hone it in a holistic way would be essential for securing competitive advantage well into the future. Khoory’s exposure earlier in his career to the discipline of strategy management and the benefits of performance management systems convinced him the time was right to implement a strategy management system at ENOC.

The first step was, of course, to forge the strategy. In late 2008, Khoory, the heads of the segments, and the business-unit heads convened in a series of workshops to assess the external environment, the company’sstrategic challenges (near- and

2 Fueling Strategic Transformation At Emirates National Oil Company – Case Study – SHIFTIN PARTNERS December 2011

considerably; in Gallup’s global ranking of companies, ENOC rose from the 27th percentile to the 52nd percentile. In emiratization—the push to increase the employment of nationals—ENOC has seen a 13% increase (from 20% to 33%) in the past two years. Companywide customer satisfaction has increased 3 percentage points, from 76% to 79%, also in the past two years. Since 2009, performance in environmental, health, and safety—a high priority for the organization—jumped 24%. The company’s IT center—which became a shared service as part of the strategic transformation process—saw a 2% rise in time-to-repair commitments, a major increase.

ENOC is enjoying greater cross-unit synergies, as businesses engage in collective deals, promote organization-wide cost savings, and generally exchange information and collaborate more. Project EVOLVE, an initiative within the Marketing segment (which commercializes and distributes gas, automotive and aviation fuels, and lubricants worldwide), achieved $20 million in savings in its first seven months.

“But when the status quo is sound

instigating change can be an uphill battle.

Why tinker with success?”

– Case Study – Fueling Strategic Transformation At Emirates National Oil Company

By Salah Al Galadari, Himanshu Verma, and Rafael Lemaitre

long-term), and hammer out a strategy. ENOC, they determined, would aim to be “a leading regional integrated oil and gas group that was highly profitable and socially responsible toward its employees, community, and environment.” Integral to that strategy was ENOC’s mission to fulfill Dubai’s growing energy needs.To implement the strategy, ENOCneeded the right mechanism. Beyond just an execution framework for implementing and monitoring the strategy, top leaders understood they would need a robust change management process, a capability-building effort, and a strategic governance mechanism.

A Big Bang Approach

ENOC adopted the Balanced Scorecard (BSC) in 2009. Khoory’s familiarity with the BSC, along with its successful use by regional peers, helped influence its choice as the company’s strategy management methodology. Leaders participated in training sessions to learn how to create strategy maps and the scorecard and how to develop and refine its components—the objectives, measures, and key performance indicators (KPIs). They identified strategic themes for each of the four perspectives in ENOC’s strategy map. At the top, beneath the company vision statement, are six overarching strategic goals, including “Align with UAE energy needs and contribute to economic development” and “Expand to new markets and enhance competitive positioning by leveraging supply chain strengths and brand image.”

Recognizing that cascading the strategy across an organization as siloed as ENOC could be tough, leaders decided to take a “big bang” approach—cascading the corporate strategy map and scorecard as quickly as possible to the business-segment and business-unit levels. So from the outset, with the help of an external adviser—and the hands-on participation of the CEO—ENOC

leaders created 24 strategy maps and scorecards. (Since then, strategy maps and scorecards have also been developed for the company’s support units—human resources, finance, and shared services.) To facilitate vertical alignment, ENOC created an “alignment matrix,” as well as a set of common KPIs for each scorecard perspective were also created to foster alignment across

business and support units. Among them are: ROCE and “adherence to budget” (for the Financial perspective); “number of new markets entered” and “energy business plan completion” (for the Customer perspective); the Environmental, Health, and Safety (EHS) index (for Internal Process); and “emiratization” and “employee engagement accountability index” (Learning and Growth).

Winning Hearts and Minds

Implementation was not without obstacles. Initially, some segment and business-unit heads resisted the change. Some were discouraged at the prospect of losing their autonomy and having to live under what they feared would be a new bureaucracy. Others bristled at the idea of having their performance evaluated on anything other than revenues. Still others simply questioned whether the BSC, and not some other methodology, was right for the company.

To overcome the resistance, Khoory and his deputies instituted intensive in-house training and workshops for managers. Perhaps the most important step in giving the new system traction was establishing Strategy Delivery Office (SDO). Formed in 2010, the Business Planning and Performance Management (BPPM) office serves as both change agent and internal strategy delivery function. Officially, it carries out four roles: architect, governor, coordinator, and leader of strategy planning and execution, which includes all elements of BSC design and execution. The office also has overall responsibility for budgeting and business planning and for ensuring linkage

between planning, operations and execution. Today, the 12-person office reports to ENOC’s Group Chief Financial Officer.

Among BPPM’s most pivotal activities was launching the strategic awareness and communications efforts and linking individual and team performance to strategic objectives. It has executed both in partnership with HR.

Fueling Strategic Awareness

Executing strategy requires the understanding and support of everyone in the organization, from the CEO to the manager of the retail service station. ENOC’s leaders knew in the early stages of implementation that they needed to inform all employees—not just those constructing and overseeing scorecards--about the company’s strategic priorities, objectives, KPIs, and targets. In a broader sense, they also realized that implementing the BSC system involved much more than implementing a new methodology; this was classic culture change. And culture change requires ongoing education and communication, as well as reinforcing mechanisms that link individual, departmental, and unit performance to organizational performance.

As part of ENOC’s four-year roadmap to embed the BSC within the company’s culture, leaders developed a variety of education and communication programs to promote awareness. ENOC sent 40 senior and middle-level managers

to BSC master classes. It also sent the BPPM (the internal SDO office) and its support team (BSC champions distributed throughout the company) to the Kaplan-Norton BSC certification program. And it conducted training programs for BSC coordinators who support the BSC system by providing performance data and analysis. In the past two years, approximately 200 staff members have received in-house training on these areas. Complementing the education programs is a broad array of communication materials and forums. ENOC distributes informational brochures and materials on the corporate strategy and BSC concepts to all employees. An intranet portal features such information along with definitions and performance updates (The Performance Management team has its own portal for knowledge management purposes, with company strategy maps and scorecards, as well as best practices for benchmarks, external and internal strategic analysis, competitive information, presentations, training materials and manuals, guides for target-setting, and more.). Every year, some 300 staff members convene at the annual Strategy Communication Event. Stories on the BSC program and strategy management appear in the company magazine Insight, which is also circulated to external stakeholders. And ENOC participates in regional seminars, workshops and events with other BSC users, including BSC Hall of Fame winners such as Dubai Electricity and Water Authority and Dubai Aluminum Company.

Instilling Accountability

Successful organizations recognize the value of using a variety of incentives and reinforcing mechanisms to promote buy-in and accountability. At the business-segment and business-unit levels, ENOC instituted performance contracts, which establish a contractual commitment between the segment or unit and corporate to execute strategy and achieve targets. (Executive directors and other senior executives, as owners of these contracts, are evaluated and incentivized based on larger goals beyond their specific BSC, such as expanding a business or pursuing additional cost savings). Similarly, the company established service-level agreements (SLAs) between support units (such as the Shared Services Center) and the businesses they support. SLAs are an integral part of the support-unit BSCs. In addition, the company instituted performance agreements—the contractual equivalent of its performance contracts—between individuals and their departments. This is the main tool to link individual performance to company strategy, and has been a powerful means of gaining buy-in from the managerial ranks. The agreement ties individual performance to scorecard objectives. Eight KPIs from each manager’s unit scorecard are incorporated into his or her individual performance plan. Each manager is also ranked overall on four behavioral values: teamwork, customer focus, performance orientation, and commitment to continuous improvement. The performance results are used to determine merit increases and bonuses. Every employee, regardless of level, is evaluated against targets, and undergoes an annual performance review.

The Payoff Thus Far

Managers’ initial apprehensions about a strategic transformation were put to rest, as the benefits, both hard and soft, quickly began to accumulate. Between 2008 and 2012, as the world economic remained lackluster, ENOCs revenues grew 17.5% and its profits 62%. Profit per employee increased 95 percent during that period—a powerful indicator of the new link between employee performance and corporate performance.

Beyond its impressive financial results, ENOC has enjoyed significant improvements throughout its other performance dimensions. Employee engagement, for instance, jumped

Everyone knows that transforming an organization is a huge undertaking. Making the case for transformation can in itself be a major challenge, even when the need is clear and urgent. But when the status quo is sound—when revenues are robust and operations are running smoothly—instigating change can be an uphill battle. Why tinker with success? Such was the case at Emirates National Oil Company (ENOC) in 2008. Founded in 1993, the $15.6 billion (2012 revenues) downstream oil and gas company was enjoying healthy revenues. All across its five business segments—from its Supply, Trading and Processing business to its Retail arm, business was booming. Dubai and its sister states seemed immune to the volatility and uncertainty that struck Europe and the U.S. in the immediate aftermath of the global financial crisis. For ENOC, a company driven almost entirely by financial results, there was little reason for change.

The CEO’s Rallying Cry

But CEO Saeed Khoory saw the situation differently. A newcomer to ENOC, Khoory believed that ENOC could ill afford to be complacent about the future—not with a rapidly changing, increasingly uncertain global economy. In his view, volatile oil prices, dwindling margins, and speculation about the economic outlook for the UAE signaled the need to consider a shift in strategy. ENOC could continue its course of maximizing revenues, or it could expend time and resources fortifying its strengths for long-term success. It was difficult to gauge the impact of the financial crisis on the global oil market.

But this was a crucial issue, given that Dubai (which lacks petroleum) must buy oil on the world market—and that the company’s underlying mandate (as a company indirectly owned by the government of Dubai) is to provide for the energy needs of its rapidly growing country.

ENOC’s business segments—Supply, Trading and Processing, Terminals, Marketing, Retail, and Other Ventures and Investments—had long operated with near-total autonomy. CEO Khoory felt that it was time to align these chiefly autonomous, siloed segments and businesses under a unifying strategy to better capture synergies and sharpen ENOC’s operational excellence. If the company could align internally, it could also begin to consider aligning with many of the energy consumers that are its key customers. Such alignment would help both parties mitigate inherent market inefficiencies and boost their oil purchasing power.

At the time, however, the company had no formal strategic plans or strategy management tools. Oversight was limited, and there was virtually noalignment between or among units.

Operational excellence was ENOC’s competitive sweet spot. The company’s ability to pursue and hone it in a holistic way would be essential for securing competitive advantage well into the future. Khoory’s exposure earlier in his career to the discipline of strategy management and the benefits of performance management systems convinced him the time was right to implement a strategy management system at ENOC.

The first step was, of course, to forge the strategy. In late 2008, Khoory, the heads of the segments, and the business-unit heads convened in a series of workshops to assess the external environment, the company’sstrategic challenges (near- and

SHIFTIN PARTNERS Knowledge Library 3

considerably; in Gallup’s global ranking of companies, ENOC rose from the 27th percentile to the 52nd percentile. In emiratization—the push to increase the employment of nationals—ENOC has seen a 13% increase (from 20% to 33%) in the past two years. Companywide customer satisfaction has increased 3 percentage points, from 76% to 79%, also in the past two years. Since 2009, performance in environmental, health, and safety—a high priority for the organization—jumped 24%. The company’s IT center—which became a shared service as part of the strategic transformation process—saw a 2% rise in time-to-repair commitments, a major increase.

ENOC is enjoying greater cross-unit synergies, as businesses engage in collective deals, promote organization-wide cost savings, and generally exchange information and collaborate more. Project EVOLVE, an initiative within the Marketing segment (which commercializes and distributes gas, automotive and aviation fuels, and lubricants worldwide), achieved $20 million in savings in its first seven months.

1. Sound methodological framework

2. Top leadership driving change

3. Comprehensive capability building

4. Robust governance in place

ENOC’S 4 CRITICAL SUCCESS FACTORS

long-term), and hammer out a strategy. ENOC, they determined, would aim to be “a leading regional integrated oil and gas group that was highly profitable and socially responsible toward its employees, community, and environment.” Integral to that strategy was ENOC’s mission to fulfill Dubai’s growing energy needs.To implement the strategy, ENOCneeded the right mechanism. Beyond just an execution framework for implementing and monitoring the strategy, top leaders understood they would need a robust change management process, a capability-building effort, and a strategic governance mechanism.

A Big Bang Approach

ENOC adopted the Balanced Scorecard (BSC) in 2009. Khoory’s familiarity with the BSC, along with its successful use by regional peers, helped influence its choice as the company’s strategy management methodology. Leaders participated in training sessions to learn how to create strategy maps and the scorecard and how to develop and refine its components—the objectives, measures, and key performance indicators (KPIs). They identified strategic themes for each of the four perspectives in ENOC’s strategy map. At the top, beneath the company vision statement, are six overarching strategic goals, including “Align with UAE energy needs and contribute to economic development” and “Expand to new markets and enhance competitive positioning by leveraging supply chain strengths and brand image.”

Recognizing that cascading the strategy across an organization as siloed as ENOC could be tough, leaders decided to take a “big bang” approach—cascading the corporate strategy map and scorecard as quickly as possible to the business-segment and business-unit levels. So from the outset, with the help of an external adviser—and the hands-on participation of the CEO—ENOC

leaders created 24 strategy maps and scorecards. (Since then, strategy maps and scorecards have also been developed for the company’s support units—human resources, finance, and shared services.) To facilitate vertical alignment, ENOC created an “alignment matrix,” as well as a set of common KPIs for each scorecard perspective were also created to foster alignment across

business and support units. Among them are: ROCE and “adherence to budget” (for the Financial perspective); “number of new markets entered” and “energy business plan completion” (for the Customer perspective); the Environmental, Health, and Safety (EHS) index (for Internal Process); and “emiratization” and “employee engagement accountability index” (Learning and Growth).

Winning Hearts and Minds

Implementation was not without obstacles. Initially, some segment and business-unit heads resisted the change. Some were discouraged at the prospect of losing their autonomy and having to live under what they feared would be a new bureaucracy. Others bristled at the idea of having their performance evaluated on anything other than revenues. Still others simply questioned whether the BSC, and not some other methodology, was right for the company.

To overcome the resistance, Khoory and his deputies instituted intensive in-house training and workshops for managers. Perhaps the most important step in giving the new system traction was establishing Strategy Delivery Office (SDO). Formed in 2010, the Business Planning and Performance Management (BPPM) office serves as both change agent and internal strategy delivery function. Officially, it carries out four roles: architect, governor, coordinator, and leader of strategy planning and execution, which includes all elements of BSC design and execution. The office also has overall responsibility for budgeting and business planning and for ensuring linkage

between planning, operations and execution. Today, the 12-person office reports to ENOC’s Group Chief Financial Officer.

Among BPPM’s most pivotal activities was launching the strategic awareness and communications efforts and linking individual and team performance to strategic objectives. It has executed both in partnership with HR.

Fueling Strategic Awareness

Executing strategy requires the understanding and support of everyone in the organization, from the CEO to the manager of the retail service station. ENOC’s leaders knew in the early stages of implementation that they needed to inform all employees—not just those constructing and overseeing scorecards--about the company’s strategic priorities, objectives, KPIs, and targets. In a broader sense, they also realized that implementing the BSC system involved much more than implementing a new methodology; this was classic culture change. And culture change requires ongoing education and communication, as well as reinforcing mechanisms that link individual, departmental, and unit performance to organizational performance.

As part of ENOC’s four-year roadmap to embed the BSC within the company’s culture, leaders developed a variety of education and communication programs to promote awareness. ENOC sent 40 senior and middle-level managers

to BSC master classes. It also sent the BPPM (the internal SDO office) and its support team (BSC champions distributed throughout the company) to the Kaplan-Norton BSC certification program. And it conducted training programs for BSC coordinators who support the BSC system by providing performance data and analysis. In the past two years, approximately 200 staff members have received in-house training on these areas. Complementing the education programs is a broad array of communication materials and forums. ENOC distributes informational brochures and materials on the corporate strategy and BSC concepts to all employees. An intranet portal features such information along with definitions and performance updates (The Performance Management team has its own portal for knowledge management purposes, with company strategy maps and scorecards, as well as best practices for benchmarks, external and internal strategic analysis, competitive information, presentations, training materials and manuals, guides for target-setting, and more.). Every year, some 300 staff members convene at the annual Strategy Communication Event. Stories on the BSC program and strategy management appear in the company magazine Insight, which is also circulated to external stakeholders. And ENOC participates in regional seminars, workshops and events with other BSC users, including BSC Hall of Fame winners such as Dubai Electricity and Water Authority and Dubai Aluminum Company.

Instilling Accountability

Successful organizations recognize the value of using a variety of incentives and reinforcing mechanisms to promote buy-in and accountability. At the business-segment and business-unit levels, ENOC instituted performance contracts, which establish a contractual commitment between the segment or unit and corporate to execute strategy and achieve targets. (Executive directors and other senior executives, as owners of these contracts, are evaluated and incentivized based on larger goals beyond their specific BSC, such as expanding a business or pursuing additional cost savings). Similarly, the company established service-level agreements (SLAs) between support units (such as the Shared Services Center) and the businesses they support. SLAs are an integral part of the support-unit BSCs. In addition, the company instituted performance agreements—the contractual equivalent of its performance contracts—between individuals and their departments. This is the main tool to link individual performance to company strategy, and has been a powerful means of gaining buy-in from the managerial ranks. The agreement ties individual performance to scorecard objectives. Eight KPIs from each manager’s unit scorecard are incorporated into his or her individual performance plan. Each manager is also ranked overall on four behavioral values: teamwork, customer focus, performance orientation, and commitment to continuous improvement. The performance results are used to determine merit increases and bonuses. Every employee, regardless of level, is evaluated against targets, and undergoes an annual performance review.

The Payoff Thus Far

Managers’ initial apprehensions about a strategic transformation were put to rest, as the benefits, both hard and soft, quickly began to accumulate. Between 2008 and 2012, as the world economic remained lackluster, ENOCs revenues grew 17.5% and its profits 62%. Profit per employee increased 95 percent during that period—a powerful indicator of the new link between employee performance and corporate performance.

Beyond its impressive financial results, ENOC has enjoyed significant improvements throughout its other performance dimensions. Employee engagement, for instance, jumped

Everyone knows that transforming an organization is a huge undertaking. Making the case for transformation can in itself be a major challenge, even when the need is clear and urgent. But when the status quo is sound—when revenues are robust and operations are running smoothly—instigating change can be an uphill battle. Why tinker with success? Such was the case at Emirates National Oil Company (ENOC) in 2008. Founded in 1993, the $15.6 billion (2012 revenues) downstream oil and gas company was enjoying healthy revenues. All across its five business segments—from its Supply, Trading and Processing business to its Retail arm, business was booming. Dubai and its sister states seemed immune to the volatility and uncertainty that struck Europe and the U.S. in the immediate aftermath of the global financial crisis. For ENOC, a company driven almost entirely by financial results, there was little reason for change.

The CEO’s Rallying Cry

But CEO Saeed Khoory saw the situation differently. A newcomer to ENOC, Khoory believed that ENOC could ill afford to be complacent about the future—not with a rapidly changing, increasingly uncertain global economy. In his view, volatile oil prices, dwindling margins, and speculation about the economic outlook for the UAE signaled the need to consider a shift in strategy. ENOC could continue its course of maximizing revenues, or it could expend time and resources fortifying its strengths for long-term success. It was difficult to gauge the impact of the financial crisis on the global oil market.

But this was a crucial issue, given that Dubai (which lacks petroleum) must buy oil on the world market—and that the company’s underlying mandate (as a company indirectly owned by the government of Dubai) is to provide for the energy needs of its rapidly growing country.

ENOC’s business segments—Supply, Trading and Processing, Terminals, Marketing, Retail, and Other Ventures and Investments—had long operated with near-total autonomy. CEO Khoory felt that it was time to align these chiefly autonomous, siloed segments and businesses under a unifying strategy to better capture synergies and sharpen ENOC’s operational excellence. If the company could align internally, it could also begin to consider aligning with many of the energy consumers that are its key customers. Such alignment would help both parties mitigate inherent market inefficiencies and boost their oil purchasing power.

At the time, however, the company had no formal strategic plans or strategy management tools. Oversight was limited, and there was virtually noalignment between or among units.

Operational excellence was ENOC’s competitive sweet spot. The company’s ability to pursue and hone it in a holistic way would be essential for securing competitive advantage well into the future. Khoory’s exposure earlier in his career to the discipline of strategy management and the benefits of performance management systems convinced him the time was right to implement a strategy management system at ENOC.

The first step was, of course, to forge the strategy. In late 2008, Khoory, the heads of the segments, and the business-unit heads convened in a series of workshops to assess the external environment, the company’sstrategic challenges (near- and

4 Fueling Strategic Transformation At Emirates National Oil Company – Case Study –

considerably; in Gallup’s global ranking of companies, ENOC rose from the 27th percentile to the 52nd percentile. In emiratization—the push to increase the employment of nationals—ENOC has seen a 13% increase (from 20% to 33%) in the past two years. Companywide customer satisfaction has increased 3 percentage points, from 76% to 79%, also in the past two years. Since 2009, performance in environmental, health, and safety—a high priority for the organization—jumped 24%. The company’s IT center—which became a shared service as part of the strategic transformation process—saw a 2% rise in time-to-repair commitments, a major increase.

ENOC is enjoying greater cross-unit synergies, as businesses engage in collective deals, promote organization-wide cost savings, and generally exchange information and collaborate more. Project EVOLVE, an initiative within the Marketing segment (which commercializes and distributes gas, automotive and aviation fuels, and lubricants worldwide), achieved $20 million in savings in its first seven months.

long-term), and hammer out a strategy. ENOC, they determined, would aim to be “a leading regional integrated oil and gas group that was highly profitable and socially responsible toward its employees, community, and environment.” Integral to that strategy was ENOC’s mission to fulfill Dubai’s growing energy needs.To implement the strategy, ENOCneeded the right mechanism. Beyond just an execution framework for implementing and monitoring the strategy, top leaders understood they would need a robust change management process, a capability-building effort, and a strategic governance mechanism.

A Big Bang Approach

ENOC adopted the Balanced Scorecard (BSC) in 2009. Khoory’s familiarity with the BSC, along with its successful use by regional peers, helped influence its choice as the company’s strategy management methodology. Leaders participated in training sessions to learn how to create strategy maps and the scorecard and how to develop and refine its components—the objectives, measures, and key performance indicators (KPIs). They identified strategic themes for each of the four perspectives in ENOC’s strategy map. At the top, beneath the company vision statement, are six overarching strategic goals, including “Align with UAE energy needs and contribute to economic development” and “Expand to new markets and enhance competitive positioning by leveraging supply chain strengths and brand image.”

Recognizing that cascading the strategy across an organization as siloed as ENOC could be tough, leaders decided to take a “big bang” approach—cascading the corporate strategy map and scorecard as quickly as possible to the business-segment and business-unit levels. So from the outset, with the help of an external adviser—and the hands-on participation of the CEO—ENOC

leaders created 24 strategy maps and scorecards. (Since then, strategy maps and scorecards have also been developed for the company’s support units—human resources, finance, and shared services.) To facilitate vertical alignment, ENOC created an “alignment matrix,” as well as a set of common KPIs for each scorecard perspective were also created to foster alignment across

business and support units. Among them are: ROCE and “adherence to budget” (for the Financial perspective); “number of new markets entered” and “energy business plan completion” (for the Customer perspective); the Environmental, Health, and Safety (EHS) index (for Internal Process); and “emiratization” and “employee engagement accountability index” (Learning and Growth).

Winning Hearts and Minds

Implementation was not without obstacles. Initially, some segment and business-unit heads resisted the change. Some were discouraged at the prospect of losing their autonomy and having to live under what they feared would be a new bureaucracy. Others bristled at the idea of having their performance evaluated on anything other than revenues. Still others simply questioned whether the BSC, and not some other methodology, was right for the company.

To overcome the resistance, Khoory and his deputies instituted intensive in-house training and workshops for managers. Perhaps the most important step in giving the new system traction was establishing Strategy Delivery Office (SDO). Formed in 2010, the Business Planning and Performance Management (BPPM) office serves as both change agent and internal strategy delivery function. Officially, it carries out four roles: architect, governor, coordinator, and leader of strategy planning and execution, which includes all elements of BSC design and execution. The office also has overall responsibility for budgeting and business planning and for ensuring linkage

between planning, operations and execution. Today, the 12-person office reports to ENOC’s Group Chief Financial Officer.

Among BPPM’s most pivotal activities was launching the strategic awareness and communications efforts and linking individual and team performance to strategic objectives. It has executed both in partnership with HR.

Fueling Strategic Awareness

Executing strategy requires the understanding and support of everyone in the organization, from the CEO to the manager of the retail service station. ENOC’s leaders knew in the early stages of implementation that they needed to inform all employees—not just those constructing and overseeing scorecards--about the company’s strategic priorities, objectives, KPIs, and targets. In a broader sense, they also realized that implementing the BSC system involved much more than implementing a new methodology; this was classic culture change. And culture change requires ongoing education and communication, as well as reinforcing mechanisms that link individual, departmental, and unit performance to organizational performance.

As part of ENOC’s four-year roadmap to embed the BSC within the company’s culture, leaders developed a variety of education and communication programs to promote awareness. ENOC sent 40 senior and middle-level managers

to BSC master classes. It also sent the BPPM (the internal SDO office) and its support team (BSC champions distributed throughout the company) to the Kaplan-Norton BSC certification program. And it conducted training programs for BSC coordinators who support the BSC system by providing performance data and analysis. In the past two years, approximately 200 staff members have received in-house training on these areas. Complementing the education programs is a broad array of communication materials and forums. ENOC distributes informational brochures and materials on the corporate strategy and BSC concepts to all employees. An intranet portal features such information along with definitions and performance updates (The Performance Management team has its own portal for knowledge management purposes, with company strategy maps and scorecards, as well as best practices for benchmarks, external and internal strategic analysis, competitive information, presentations, training materials and manuals, guides for target-setting, and more.). Every year, some 300 staff members convene at the annual Strategy Communication Event. Stories on the BSC program and strategy management appear in the company magazine Insight, which is also circulated to external stakeholders. And ENOC participates in regional seminars, workshops and events with other BSC users, including BSC Hall of Fame winners such as Dubai Electricity and Water Authority and Dubai Aluminum Company.

Instilling Accountability

Successful organizations recognize the value of using a variety of incentives and reinforcing mechanisms to promote buy-in and accountability. At the business-segment and business-unit levels, ENOC instituted performance contracts, which establish a contractual commitment between the segment or unit and corporate to execute strategy and achieve targets. (Executive directors and other senior executives, as owners of these contracts, are evaluated and incentivized based on larger goals beyond their specific BSC, such as expanding a business or pursuing additional cost savings). Similarly, the company established service-level agreements (SLAs) between support units (such as the Shared Services Center) and the businesses they support. SLAs are an integral part of the support-unit BSCs. In addition, the company instituted performance agreements—the contractual equivalent of its performance contracts—between individuals and their departments. This is the main tool to link individual performance to company strategy, and has been a powerful means of gaining buy-in from the managerial ranks. The agreement ties individual performance to scorecard objectives. Eight KPIs from each manager’s unit scorecard are incorporated into his or her individual performance plan. Each manager is also ranked overall on four behavioral values: teamwork, customer focus, performance orientation, and commitment to continuous improvement. The performance results are used to determine merit increases and bonuses. Every employee, regardless of level, is evaluated against targets, and undergoes an annual performance review.

The Payoff Thus Far

Managers’ initial apprehensions about a strategic transformation were put to rest, as the benefits, both hard and soft, quickly began to accumulate. Between 2008 and 2012, as the world economic remained lackluster, ENOCs revenues grew 17.5% and its profits 62%. Profit per employee increased 95 percent during that period—a powerful indicator of the new link between employee performance and corporate performance.

Beyond its impressive financial results, ENOC has enjoyed significant improvements throughout its other performance dimensions. Employee engagement, for instance, jumped

Everyone knows that transforming an organization is a huge undertaking. Making the case for transformation can in itself be a major challenge, even when the need is clear and urgent. But when the status quo is sound—when revenues are robust and operations are running smoothly—instigating change can be an uphill battle. Why tinker with success? Such was the case at Emirates National Oil Company (ENOC) in 2008. Founded in 1993, the $15.6 billion (2012 revenues) downstream oil and gas company was enjoying healthy revenues. All across its five business segments—from its Supply, Trading and Processing business to its Retail arm, business was booming. Dubai and its sister states seemed immune to the volatility and uncertainty that struck Europe and the U.S. in the immediate aftermath of the global financial crisis. For ENOC, a company driven almost entirely by financial results, there was little reason for change.

The CEO’s Rallying Cry

But CEO Saeed Khoory saw the situation differently. A newcomer to ENOC, Khoory believed that ENOC could ill afford to be complacent about the future—not with a rapidly changing, increasingly uncertain global economy. In his view, volatile oil prices, dwindling margins, and speculation about the economic outlook for the UAE signaled the need to consider a shift in strategy. ENOC could continue its course of maximizing revenues, or it could expend time and resources fortifying its strengths for long-term success. It was difficult to gauge the impact of the financial crisis on the global oil market.

But this was a crucial issue, given that Dubai (which lacks petroleum) must buy oil on the world market—and that the company’s underlying mandate (as a company indirectly owned by the government of Dubai) is to provide for the energy needs of its rapidly growing country.

ENOC’s business segments—Supply, Trading and Processing, Terminals, Marketing, Retail, and Other Ventures and Investments—had long operated with near-total autonomy. CEO Khoory felt that it was time to align these chiefly autonomous, siloed segments and businesses under a unifying strategy to better capture synergies and sharpen ENOC’s operational excellence. If the company could align internally, it could also begin to consider aligning with many of the energy consumers that are its key customers. Such alignment would help both parties mitigate inherent market inefficiencies and boost their oil purchasing power.

At the time, however, the company had no formal strategic plans or strategy management tools. Oversight was limited, and there was virtually noalignment between or among units.

Operational excellence was ENOC’s competitive sweet spot. The company’s ability to pursue and hone it in a holistic way would be essential for securing competitive advantage well into the future. Khoory’s exposure earlier in his career to the discipline of strategy management and the benefits of performance management systems convinced him the time was right to implement a strategy management system at ENOC.

The first step was, of course, to forge the strategy. In late 2008, Khoory, the heads of the segments, and the business-unit heads convened in a series of workshops to assess the external environment, the company’sstrategic challenges (near- and

SHIFTIN PARTNERS Knowledge Library 5

considerably; in Gallup’s global ranking of companies, ENOC rose from the 27th percentile to the 52nd percentile. In emiratization—the push to increase the employment of nationals—ENOC has seen a 13% increase (from 20% to 33%) in the past two years. Companywide customer satisfaction has increased 3 percentage points, from 76% to 79%, also in the past two years. Since 2009, performance in environmental, health, and safety—a high priority for the organization—jumped 24%. The company’s IT center—which became a shared service as part of the strategic transformation process—saw a 2% rise in time-to-repair commitments, a major increase.

ENOC is enjoying greater cross-unit synergies, as businesses engage in collective deals, promote organization-wide cost savings, and generally exchange information and collaborate more. Project EVOLVE, an initiative within the Marketing segment (which commercializes and distributes gas, automotive and aviation fuels, and lubricants worldwide), achieved $20 million in savings in its first seven months.

long-term), and hammer out a strategy. ENOC, they determined, would aim to be “a leading regional integrated oil and gas group that was highly profitable and socially responsible toward its employees, community, and environment.” Integral to that strategy was ENOC’s mission to fulfill Dubai’s growing energy needs.To implement the strategy, ENOCneeded the right mechanism. Beyond just an execution framework for implementing and monitoring the strategy, top leaders understood they would need a robust change management process, a capability-building effort, and a strategic governance mechanism.

A Big Bang Approach

ENOC adopted the Balanced Scorecard (BSC) in 2009. Khoory’s familiarity with the BSC, along with its successful use by regional peers, helped influence its choice as the company’s strategy management methodology. Leaders participated in training sessions to learn how to create strategy maps and the scorecard and how to develop and refine its components—the objectives, measures, and key performance indicators (KPIs). They identified strategic themes for each of the four perspectives in ENOC’s strategy map. At the top, beneath the company vision statement, are six overarching strategic goals, including “Align with UAE energy needs and contribute to economic development” and “Expand to new markets and enhance competitive positioning by leveraging supply chain strengths and brand image.”

Recognizing that cascading the strategy across an organization as siloed as ENOC could be tough, leaders decided to take a “big bang” approach—cascading the corporate strategy map and scorecard as quickly as possible to the business-segment and business-unit levels. So from the outset, with the help of an external adviser—and the hands-on participation of the CEO—ENOC

leaders created 24 strategy maps and scorecards. (Since then, strategy maps and scorecards have also been developed for the company’s support units—human resources, finance, and shared services.) To facilitate vertical alignment, ENOC created an “alignment matrix,” as well as a set of common KPIs for each scorecard perspective were also created to foster alignment across

business and support units. Among them are: ROCE and “adherence to budget” (for the Financial perspective); “number of new markets entered” and “energy business plan completion” (for the Customer perspective); the Environmental, Health, and Safety (EHS) index (for Internal Process); and “emiratization” and “employee engagement accountability index” (Learning and Growth).

Winning Hearts and Minds

Implementation was not without obstacles. Initially, some segment and business-unit heads resisted the change. Some were discouraged at the prospect of losing their autonomy and having to live under what they feared would be a new bureaucracy. Others bristled at the idea of having their performance evaluated on anything other than revenues. Still others simply questioned whether the BSC, and not some other methodology, was right for the company.

To overcome the resistance, Khoory and his deputies instituted intensive in-house training and workshops for managers. Perhaps the most important step in giving the new system traction was establishing Strategy Delivery Office (SDO). Formed in 2010, the Business Planning and Performance Management (BPPM) office serves as both change agent and internal strategy delivery function. Officially, it carries out four roles: architect, governor, coordinator, and leader of strategy planning and execution, which includes all elements of BSC design and execution. The office also has overall responsibility for budgeting and business planning and for ensuring linkage

between planning, operations and execution. Today, the 12-person office reports to ENOC’s Group Chief Financial Officer.

Among BPPM’s most pivotal activities was launching the strategic awareness and communications efforts and linking individual and team performance to strategic objectives. It has executed both in partnership with HR.

Fueling Strategic Awareness

Executing strategy requires the understanding and support of everyone in the organization, from the CEO to the manager of the retail service station. ENOC’s leaders knew in the early stages of implementation that they needed to inform all employees—not just those constructing and overseeing scorecards--about the company’s strategic priorities, objectives, KPIs, and targets. In a broader sense, they also realized that implementing the BSC system involved much more than implementing a new methodology; this was classic culture change. And culture change requires ongoing education and communication, as well as reinforcing mechanisms that link individual, departmental, and unit performance to organizational performance.

As part of ENOC’s four-year roadmap to embed the BSC within the company’s culture, leaders developed a variety of education and communication programs to promote awareness. ENOC sent 40 senior and middle-level managers

to BSC master classes. It also sent the BPPM (the internal SDO office) and its support team (BSC champions distributed throughout the company) to the Kaplan-Norton BSC certification program. And it conducted training programs for BSC coordinators who support the BSC system by providing performance data and analysis. In the past two years, approximately 200 staff members have received in-house training on these areas. Complementing the education programs is a broad array of communication materials and forums. ENOC distributes informational brochures and materials on the corporate strategy and BSC concepts to all employees. An intranet portal features such information along with definitions and performance updates (The Performance Management team has its own portal for knowledge management purposes, with company strategy maps and scorecards, as well as best practices for benchmarks, external and internal strategic analysis, competitive information, presentations, training materials and manuals, guides for target-setting, and more.). Every year, some 300 staff members convene at the annual Strategy Communication Event. Stories on the BSC program and strategy management appear in the company magazine Insight, which is also circulated to external stakeholders. And ENOC participates in regional seminars, workshops and events with other BSC users, including BSC Hall of Fame winners such as Dubai Electricity and Water Authority and Dubai Aluminum Company.

Instilling Accountability

Successful organizations recognize the value of using a variety of incentives and reinforcing mechanisms to promote buy-in and accountability. At the business-segment and business-unit levels, ENOC instituted performance contracts, which establish a contractual commitment between the segment or unit and corporate to execute strategy and achieve targets. (Executive directors and other senior executives, as owners of these contracts, are evaluated and incentivized based on larger goals beyond their specific BSC, such as expanding a business or pursuing additional cost savings). Similarly, the company established service-level agreements (SLAs) between support units (such as the Shared Services Center) and the businesses they support. SLAs are an integral part of the support-unit BSCs. In addition, the company instituted performance agreements—the contractual equivalent of its performance contracts—between individuals and their departments. This is the main tool to link individual performance to company strategy, and has been a powerful means of gaining buy-in from the managerial ranks. The agreement ties individual performance to scorecard objectives. Eight KPIs from each manager’s unit scorecard are incorporated into his or her individual performance plan. Each manager is also ranked overall on four behavioral values: teamwork, customer focus, performance orientation, and commitment to continuous improvement. The performance results are used to determine merit increases and bonuses. Every employee, regardless of level, is evaluated against targets, and undergoes an annual performance review.

The Payoff Thus Far

Managers’ initial apprehensions about a strategic transformation were put to rest, as the benefits, both hard and soft, quickly began to accumulate. Between 2008 and 2012, as the world economic remained lackluster, ENOCs revenues grew 17.5% and its profits 62%. Profit per employee increased 95 percent during that period—a powerful indicator of the new link between employee performance and corporate performance.

Beyond its impressive financial results, ENOC has enjoyed significant improvements throughout its other performance dimensions. Employee engagement, for instance, jumped

Everyone knows that transforming an organization is a huge undertaking. Making the case for transformation can in itself be a major challenge, even when the need is clear and urgent. But when the status quo is sound—when revenues are robust and operations are running smoothly—instigating change can be an uphill battle. Why tinker with success? Such was the case at Emirates National Oil Company (ENOC) in 2008. Founded in 1993, the $15.6 billion (2012 revenues) downstream oil and gas company was enjoying healthy revenues. All across its five business segments—from its Supply, Trading and Processing business to its Retail arm, business was booming. Dubai and its sister states seemed immune to the volatility and uncertainty that struck Europe and the U.S. in the immediate aftermath of the global financial crisis. For ENOC, a company driven almost entirely by financial results, there was little reason for change.

The CEO’s Rallying Cry

But CEO Saeed Khoory saw the situation differently. A newcomer to ENOC, Khoory believed that ENOC could ill afford to be complacent about the future—not with a rapidly changing, increasingly uncertain global economy. In his view, volatile oil prices, dwindling margins, and speculation about the economic outlook for the UAE signaled the need to consider a shift in strategy. ENOC could continue its course of maximizing revenues, or it could expend time and resources fortifying its strengths for long-term success. It was difficult to gauge the impact of the financial crisis on the global oil market.

But this was a crucial issue, given that Dubai (which lacks petroleum) must buy oil on the world market—and that the company’s underlying mandate (as a company indirectly owned by the government of Dubai) is to provide for the energy needs of its rapidly growing country.

ENOC’s business segments—Supply, Trading and Processing, Terminals, Marketing, Retail, and Other Ventures and Investments—had long operated with near-total autonomy. CEO Khoory felt that it was time to align these chiefly autonomous, siloed segments and businesses under a unifying strategy to better capture synergies and sharpen ENOC’s operational excellence. If the company could align internally, it could also begin to consider aligning with many of the energy consumers that are its key customers. Such alignment would help both parties mitigate inherent market inefficiencies and boost their oil purchasing power.

At the time, however, the company had no formal strategic plans or strategy management tools. Oversight was limited, and there was virtually noalignment between or among units.

Operational excellence was ENOC’s competitive sweet spot. The company’s ability to pursue and hone it in a holistic way would be essential for securing competitive advantage well into the future. Khoory’s exposure earlier in his career to the discipline of strategy management and the benefits of performance management systems convinced him the time was right to implement a strategy management system at ENOC.

The first step was, of course, to forge the strategy. In late 2008, Khoory, the heads of the segments, and the business-unit heads convened in a series of workshops to assess the external environment, the company’sstrategic challenges (near- and

6 Fueling Strategic Transformation At Emirates National Oil Company – Case Study –

considerably; in Gallup’s global ranking of companies, ENOC rose from the 27th percentile to the 52nd percentile. In emiratization—the push to increase the employment of nationals—ENOC has seen a 13% increase (from 20% to 33%) in the past two years. Companywide customer satisfaction has increased 3 percentage points, from 76% to 79%, also in the past two years. Since 2009, performance in environmental, health, and safety—a high priority for the organization—jumped 24%. The company’s IT center—which became a shared service as part of the strategic transformation process—saw a 2% rise in time-to-repair commitments, a major increase.

ENOC is enjoying greater cross-unit synergies, as businesses engage in collective deals, promote organization-wide cost savings, and generally exchange information and collaborate more. Project EVOLVE, an initiative within the Marketing segment (which commercializes and distributes gas, automotive and aviation fuels, and lubricants worldwide), achieved $20 million in savings in its first seven months.

A Work in Progress

Strategy execution is an ever-evolving process, a recent survey conducted by Jeroen de Flander and ShiftIN Partners (Strategy Execution BarometerTM) helped to benchmark the company against 1500 companies worldwide.The results of the Barometer highlighted that ENOC ranks among best-in-class companies in terms of its framework definition, although the study pinpointed as well areas of improvement, which ENOC’s leaders are fully committed to tackle on the upcoming cycle. Currently, one important area of focus is integrating data systems and automating and refining the data gathering process within and across units. BPPM created task forces to address this issue. Leaders are also keen to bolster strategy communications; the barometer shows that communications need to be more frequent and less technical. ENOC plans to create learning maps, videos, and content that is more engaging and accessible for a broader audience. The company is also working to generate more excitement among managers about the strategic push to diversify and expand into new markets.In many ways, ENOC’s BSC-based strategy management implementation is a textbook case. The company has followed the key principles of a strategy-focused organization; demonstrated methodological rigor in developing and cascading strategy maps, scorecards, and KPIs; and focused relentlessly on education and communication. Its governance practices are ensuring alignment throughout the enterprise, as well as continuous adaptation to industry and economic change. With strategy as the driving force, the company has already shifted from its once singularly financial orientation to a performance-driven, future-directed stance. As CEO Khoory notes, “Based on [our results], we believe that we have effectively used the methodology to help the organization reach the next strategic level. While the course is not fully complete, and there are certain challenges yet to overcome, we believe that we have exerted tremendous efforts to reach this point and have built a strategically aligned and performance-driven organization.” Once the champion, always the champion: Khoory continues to be involved at every level, from defining the Group’s strategic goals to reviewing every scorecard and its KPIs. By every indication, he intends to remain hands-on as he leads ENOC forward in its strategic journey.

“The information contained in this case study is to be used only for informative purposes, it intends to diffuse best practices in strategy execution in the Middle East. The case study is not intended to serve as ENOC’s advertisement material nor represents ShiftIN Partners’ description of its scope of work. The role of the authors is limited to a descriptive role of the best-practice after several years of experience in the organization (S. Galadari, H. Verma) and an intensive assessment of the current situation (R. Lemaitre)”

About The AuthorsSalah Galadari is a seasoned oil and gas professional with more than 20 years of industry experience in sales, marketing, strategy, business development and opera-tions. At present Salah is the Director, Business Planning and Performance Management at ENOC. He leads the strategy, planning, business development, portfolio management, performance management and management reporting function of ENOC Group. Salah was the COO of the ENOC’s international sales business before taking up the responsibility of the Group’s Business Planning and Perfor-mance Management function. Prior to joining ENOC, Salah has worked with Shell Middle East in various managerial positions in the region.

Himanshu Verma has more than 12 years of strategy execution and corporate perfor-mance management experience. At present he is Manager-Performance Management, where he has been responsible for the successful implementation and roll-out of the BSC across the entire organization (7 segments and 40 business units). Before joining ENOC, Himanshu has worked with management consulting and IT consulting firms advising clients to build commensu-rate process & technology maturity in the areas of operational excellence, corporate performance management, strategy and business planning, business process management, and business intelligence.

Rafael Lemaitre is a partner at ShiftIN Partners. A seasoned strategy management consultant who has lead projects in a variety of industries and cultures in the Americas, Europe and the Middle East. His areas of expertise are Strategy Execution and Innovation, with special focus in the Government and Transport & Logistics sectors.

SHIFTIN PARTNERS Knowledge Library 7

The shift key in your keyboard enables regular characters to be capitalized or transformed into something completely new. Similarly, ShiftIN Partners is a management consulting firm focused on helping clients develop and execute strategy programs that enable them to achieve the necessary Shift, working from withIN. Our professionals, some of the most experienced consultants in the field of strategy execution, have successfully led consulting engagements throughout the world. We have partnered with customers in financial services, oil & gas, heavy industry, utilities, government, and other sectors.ShiftIn has the flexibility to collaborate with our clients in ways that best suit their needs while eliminating the burden of unnecessary fixed costs. ShiftIN's professionals are bound by a shared set of values and a culture of fellowship, entrepreneurship, trust, and respect—and an unwavering willingness to go above and beyond to ensure our clients’ success.

For more information visit: www.shiftinpartners.com

Abu Dhabi - Doha - Dubai - Kuwait - Riyadhwww.shiftINpartners.com

© ShiftIN Partners

July 2013, all rights reserved