Q&A with Raiha Azni Abd Rahman of PETRONAS

Drilling for international success

Raiha Azni Abd Rahman, senior vice-president of group human resource management at Petroliam Nasional Berhad (PETRONAS), has seen the company grow from a domestic player to the Fortune 500 list.

In this exclusive interview, she talks about internal talent development as the foundation which has helped it sail through the crests and troughs of each business cycle.

Q. Having been with the company for nearly three decades, what has kept you going?

I was sponsored by PETRONAS to pursue my studies at Syracuse University in the US, and I joined the company after I returned in 1984. My degree was in marketing, but they didn’t have an open position at that time, so they put me in the personnel department.

I began to love the job because I have a genuine interest in seeing people develop and grow in their career.

Q. How has the company changed since?

When I came in, we had just 4000 to 5000 staff compared with the 30,000 today. We knew most people in the building, and we were just a domestic player back then.

The best part is having our forefathers, the leaders of yesterday, starting with one million ringgit and 18 people, bringing this company to a global level and part of the Fortune 500.

Q. Did you have any inkling of the kind of growth that was to come?

No, and we have gone through various stages, including the cycle of recession, where we lost a lot of business to the Middle East, to get to where we are today. Along the way, we crafted strategies to go with the times, built relationships, networked with service providers, and learnt from those better than us.

Q. You are now a benchmark for employers around the country. What has guided your HR philosophy?

The unique thing about PETRONAS is that we are willing to spend on capability development. It has always been the strategy of building your own timber.

The fact that I was probably one of the first few batches back then showed that PETRONAS had decided that sponsoring students with a better education was the only way to go, and that this responsibility cannot just come from the government.

Q. This must have helped build talent internally, especially with the way the company has grown.

Our business grew very suddenly when we decided to venture aboard in the 1990s. We may have been ready on the business side of things, but were we ready to have diversity in our human capital development? Perhaps not.

When we say we are ready to go out of Malaysia, it has to be in tandem with our ability to get non-Malaysians to understand what PETRONAS is. We faced language issues and had a low understanding of cultural differences.

As a result, we developed programmes for us to understand diversity, cultures and the dos and don’t’s of doing business abroad. Similarly, we developed material for the non-Malaysians to understand the country’s culture and the procedures of PETRONAS.

After that, PETRONAS became bigger which required a similar change in our capability development.

Q. What kind of changes are you talking about?

It was about ensuring all employees were on the same page no matter their nationality, skin colour or gender. This could only be done if everyone had the same level of capability. At the end of the day, being in the oil and gas industry, safety comes first.

Driven to operate safely, in 2007 we developed “accelerated capability development”, which meant that all employees in every country of operation had a checklist of things they needed to know – be it in engineering, finance or human resources.

This is very structured and talks about how each person can ensure their safety, know their role in the bigger picture, and have autonomy in making the right decisions.

Q. Does this help to build the base for them to progress within the company?

While we focus on the functional capabilities, this has to be coupled with soft skills such as leadership. We are fortunate that our forefathers have created the base for us in the form of facilities. We have our own corporate university, the PETRONAS Leadership Centre in Bangi, and also the Universiti Teknologi PETRONAS, which has been around for about 18 years.

The centre provides programmes on functional capability to ensure wholesome development of talent – at times when they are about to become a manager – by developing their soft skills, having a performance review conversation or any other gap. There’s a programme for every step of the career ladder.

We have also developed many MBA programmes with the University of Melbourne and Duke University, among others, for in-house senior management development.

Another thing we are proud of is that our top leaders come in to teach at the centre – we call this LDL or Leaders Develop Leaders. Who else can teach your own people best?

This was launched about one-and-a-half years ago, and it’s going very strong. Can you imagine, in the presence of top leaders, we have a group of our 30-year-olds about to become managers, learning from their experiences, what mistakes they made, and how their first day at the job was? It is a powerful tool and the feedback so far has been very promising and positive.

Q. That means they are able to apply the skills they learn on the job right away?

They need a lot of experience doing that before they can start teaching. We expect general managers and above to teach at the centre and to do that, they must acquire years of experience, tacit knowledge, functional knowledge and a rich experience in terms of failures and the subject matter itself.

Q. Does HR own this initiative or are you working closely with other functions?

We are partnering with the line managers as that has always been our strategy – to become a partner with and to the business. In whatever we do, we consult the line manager.

Q. What kind of results have you seen on these initiatives so far?

At the end of the day, for any business, delivering results is key. We do that by getting all of our staff to perform well. We have created a high-performance culture going back to what we learnt from the early 1990s.

It took us a long time to perfect it, and I am not saying we are perfect now, but in the last four years, HR does not do any more mitigating or policing, but rather helps to manage performance.

Q. What has helped you make that transition?

The foundation lies in creating a high-performance culture so that you can differentiate your best talent. That allows you to invest in succession planning, manage them differently, and understand if they are fit for the next-level job in an unbiased way.

For them to assume a higher position, we must make sure they are given enough exposure. Suffice to say, if any of our vice-presidents exit tomorrow, we have two to three successors identified.

Along the way, we also opened our doors to external talent. Our remuneration package has to be marked to the market. We’ve created an employee value proposition, which is a promise for employees that once they come in, they will gain trust, growth and reward.

We trust them to perform well, and as they grow, they can decide which path they want to take, and we promise to give them the training and capabilities they need.

The reward for them is not necessarily in terms of dollars and cents. It is coupled with the values we have in the company.

If you are looking for dollars and cents, this is not the company to be in. This company gives opportunities to work on the most challenging assignments, in remote areas, and that is part of the reward.

Q. When do you look at external hiring?

There have been times that has happened, such as when we grew beyond the domestic environment. Along the way, we made some mistakes, such as not investing in the continuity of recruitment, especially during times of recession.

When we decided to open our gates to external candidates, it was a message to staff about meritocracy. Seniority does not count, instead we look at performance and potential. It took us a long time before they accepted that. At this juncture, almost 20% of our employee population is non-Malaysian.

We have come to accept that we are no longer just a “Malaysian” company, we are a Fortune 500 company. However, we remain a performance-based company, so only the best will move up the ladder.

Q. What are one or two big things you are focusing on this year?

It is not a pretty sight in the oil and gas industry currently. Oil prices have plunged and we are no longer living in the glory of the past. But we in PETRONAS have been trained to be robust enough to change because we have gone through this cycle a few times. We are more prepared for what is likely to be the new normal.

We need our best talent to be with us because this is the survival of the fittest. Whether it is about managing costs or implementing the latest technology, how we manage human capital development, if the oil prices are going to be like this for the next five years, is what keeps us busy.

Q. Does that mean HR is involved in business-scenario planning?

Very much, especially compared to the personnel department of yesteryears. HR and the business have come a long way and we are all in this together to come up with a solution. We do what is required from a strategic point of view, be it tweaking our global talent strategies or the redeployment of people.

Q. Where do you think the main challenges lie for PETRONAS currently?

At the moment, it is about growth. How do we perform well with the current oil prices, how do we manage our revenue and profits, and how do we manage our assets and liabilities.

Q. Being a state-owned entity, how closely do you work with the government?

We are a national oil company, but on a day-to-day basis, we operate like any other private entity. We monitor our performance, growth, revenue, and we understand that we are contributing to the nation.

We have never failed to work closely with the government, especially with the ministries of education and human resources, and the state governments. Because we sponsor so many students, not just at the university level, but even at the primary and secondary school level, it has become part of our CSR.

We work with the corporate strategic communications team, in terms of sponsoring education, and helping young engineers contribute back to the community by giving free tuition classes.

We are currently working with the state government and the Ministry of Education to make this more reachable. We continue to sponsor equipment in some of the training colleges and polytechnics. Almost every weekend, we get a group of young people going to schools to promote a career in oil and gas.

We also participate a lot in career fairs and continue to provide scholarships for students in Malaysia, at our university, or abroad. Lately, we have been topping the best employer category in the oil and gas industry in Malaysia.

But in the next phase, we would like to be more impactful in terms of providing an opportunity to the lesser privileged. It is not necessary that they come and work at PETRONAS, but they could help the state government as well.

Q. What would you say is the secret to the company’s success?

The main thing that has brought the people together in PETRONAS is our shared values. Because it is not just about delivering results or about an employee value proposition, but in whatever we do, we are guided by the shared values that have brought us together.

These values are loyalty, cohesiveness, professionalism and integrity. Being loyal to the company means to protect PETRONAS’ interests wherever employees are, be it in Malaysia or Turkmenistan. Cohesiveness is the ability to work as a team and to have a win-win situation for the company. Professionalism is reflected in our conduct, being respectful and consistent.

Finally, we are very serious about integrity. It is not just about having a no-gift policy, but if employees do anything to dishonour that, PETRONAS will denounce them, because they are not part and parcel of this family if they don’t subscribe to these values.

Q. How do you impart these values every time you acquire a new company or spread to a new country?

It is a challenge, but we have our onboarding programme that applies to every level and country. It talks about the shared values, the employee value proposition, the business, the vision and mission of this company.

The shared values have to be instituted and embraced. Employees have to see their leaders be exemplary, and it has to reflect in their performance. The high performance culture is not just about the delivery, but how leaders deliver it, and how they behave.

Q. Diversity has many aspects, but one angle most companies are struggling with is to have more women take up leadership roles. Are you working on this?

We have never differentiated between male and female employees as it has always been a meritocracy. But in an industry like ours, we do have difficulties getting women to work in offshore drilling rigs, although we provide facilities for them, such as separate living quarters, even though it costs more.

We promise our women employees that when they come in they will feel comfortable. We have recently announced a third month of maternity leave at half pay. We also provide them half-day leave where they can settle their household errands.

We have flexible working hours where employees can make arrangements with their bosses if required. We give more compassionate leave if their child or spouse is in the hospital.

We also have a returning mothers programme where new mothers are welcomed back even after two to three years, subject to business assessment.

I remember in 1984, no more than 2% of our workforce was female. Today, a quarter of our workforce, soon going to be one-third, are women. Ten years ago, we did not have even one woman in a vice-president or above position, but today we have four out of 25.