Sector News

Leadership Lessons From Chevron CEO John Watson

March 27, 2015
Chemical Value Chain
John Watson, 58, has been CEO of Chevron since 2010. He’s a lifer at the oil and gas giant, joining as a financial analyst in 1980 straight out of business school at the University of Chicago. A California native, he studied agricultural economics at University of California at Davis. As he pursued his career at Chevron, the company became aware of the need to diversify its ranks and adopted a credo called The Chevron Way that, among other things, laid out the company’s commitment to diversity and the promotion of women among its gargantuan workforce of 64,700, doing everything from recruiting women in their first year at the University of Texas at Austin to running a global women’s mentoring program. These efforts won Chevron a Catalyst award from the non-profit of that name, which promotes inclusive workplaces for women. Watson was in New York for the award and talked with me on the phone about his personal efforts to increase diversity and the leadership lessons he’s learned along the way. This is a condensed and edited transcript of our conversation.
 
Were you in leadership roles early in your life?
 
I honestly was not one of the people who would get up in front of the class and make speeches. I wasn’t in student government. I never sought a lot of attention. I was always engaged with people. I was social. But I wasn’t one who went for being on stage.
 
I played a lot of sports. In college I was captain of the golf team.
 
I was an active participant in class but I never sought the glass office.
 
Did your parents influence you to become a leader?
 
Actually no. My father was a lawyer, my mother was a teacher. They didn’t prescribe what I should do. They just encouraged me to pursue my interests.
 
When you joined Chevron, what were your goals?
 
I didn’t come into Chevron expecting to be CEO. I joined straight out of business school, right after the Iranian embargo in 1980. I thought the energy business was interesting from an economic and geo-political point of view.
 
What leadership lessons did you learn at Chevron early on?
 
A big test came when I was manager of investor relations with a staff of two and I was sent to run our credit card business, which was 400 people. I learned that the average Chevron employee comes to work trying to do a good job and if you ask the right questions they’ll identify the things we need to get better at. I learned that my job was to make sure people were performing well in their role and to pick the right people for the role.
 
If you’re naturally curious you ask questions in order to learn, you get new ideas and you encourage people to go in the direction that is best for them.
 
What’s an example of questions and answers leading you on a new path?
 
We needed to put more emphasis on process safety, keeping oil and gas in the tanks and pipelines. Public expectations were growing and it was consistent with our values to make our operations safer.
 
The other area is diversity. The business case for diversity is very well understood but the personal awareness may not always be there.
 
I learned a lesson from a very senior Thai official who was very quiet around us. I knew he was very successful but I hadn’t gotten to know him. I decided I was going to hear this guy out. We were on a long drive from the Bangkok airport and I asked him one question and let him talk it out fully. I just shut up. The normal thing for an American to do would be to keep talking, while in Thai culture there is a great respect for authority and you limit what you say. There was a big question related to our drilling operation. Once I listened I learned a great deal.
 
How do you hire?
 
We hire people who are interested in our business, in making a career in our business and who are drawn to the values we exhibit. One of the best vehicles into our company is summer internships.
 
What career advice would you give to college graduates today?
 
Pick an industry and follow your passion. Pick a company well and ask as many questions as you can about the company and about the people in the company. Get to know what it’s really like inside the company.
 
What should a new hire know about working for you?
 
I like people who speak their minds, who not only can identify problems but can identify solutions. One of the lessons I learned early on is there is no shortage of people who can identify problems. Leaders need people to solve them.
 
My job is to ask the right questions. Then if I’m in a meeting with employees and they say, “I think I can do better in this or that area,” I say, “What do I have to do?”
 
How is it to lead Chevron as oil prices are plummeting?
 
When a big chunk of your revenue disappears it provides tests. This is the fifth time I’ve seen oil prices drop 50% or more. We’ve kept our balance sheet very strong so we navigate as best we can. There’s a balance between urgency and patience in a long cycle business like this. We need to reduce spend and cost as we move through this period.
 
Last question: With the movement against fossil fuels toward alternative energy, what’s the future of your business?
 
Every single thing you have in your life is because of fossil fuels. Light, heat, mobility, modern agriculture, the things you eat, the clothes you wear, medicine, cosmetics. If you go back 100 years, life expectancy was half of what it is today. It’s not yet clear what the alternative to fossil fuels will be. Right now we have 50% of Americans who live paycheck to paycheck. There are a lot of things we can do to be more efficient around energy use. But the pathway to prosperity in developing nations is through affordable energy and for the foreseeable future that will be fossil fuels.
 
By Susan Adams
 
Source: Forbes

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