Entrepreneurship –Leading to Corporate Excellence€¦ · while still believing in their ideas. Entrepreneurship –Leading to Corporate Excellence 8. Characteristics of a Successful

Entrepreneurship – Leading to Corporate ExcellenceCorporate Excellence

“Third HR Conference – Expanding HR Horizons”p g

October 12 , 2011

M. Adil KhattakCEO, Attock Refinery Limited

Rawalpindi, Pakistanwww.arl.com.pk [email protected]

Entrepreneurship

Entrepreneurship—a way of thinkingEntrepreneurship a way of thinking, reasoning, and acting that is opportunity obsessed holistic inopportunity obsessed, holistic in approach, and leadership balanced

(This definition of entrepreneurship has evolved over the past two decades from research at Babson College and the Harvard Business School and has recently been enhanced by Stephen Spinelli, Jr., and John H. Muller, Jr., Term Ch i t B b C ll )Chair at Babson College.)

Entrepreneurship – Leading to Corporate Excellence 2

Entrepreneurship

– You can do new things

– You can do old things differently

– You can innovate, consolidate, expand BUT … , , p

– the only necessary and sufficient condition for business is customersfor business is customers

– For entrepreneurs, timing is all


Corporate Entrepreneurship

– Conventional management vs. hientrepreneurship

– How doing, feeling and thinking enter into innovation and growth in an organization


Conventional Management vs. Entrepreneurship

A conventional manager manages resources, an entrepreneurial manager

creates resourcescreates resources


Characteristics of a Successful Enterprise

Arthur Rock one of America’s leading ventureArthur Rock, one of America s leading venture capitalists, cites the following characteristics as the most important ones for the creation of a successfulmost important ones for the creation of a successful enterprise

Source : Harvard Business Review on Entrepreneurship.Harvard Business School Press. 1999.


Characteristics of a Successful Enterprise (contd)

1. “Strategy is easy, but tactics are hard.”gy y,

The key to turning a good idea into a good business comes from the day‐to‐daybusiness comes from the day to day management of the company. Having the right people can be more important than having thepeople can be more important than having the right business plan.



2. “There’s a thin line between refusing to

( )

gaccept criticism and sticking to your guns.”

Entrepreneurs must be brutally honest withEntrepreneurs must be brutally honest with themselves about bad news & disappointment while still believing in their ideaswhile still believing in their ideas.



3. “A great idea won’t make it without great

( )

g gmanagement.”

Entrepreneurial companies go through threeEntrepreneurial companies go through three stages of growth that require different managerial skills The best entrepreneursmanagerial skills. The best entrepreneurs understand how vital good management is to their company and if they can’t provide ittheir company, and if they can t provide it themselves, then they look outside and bring the right person inthe right person in.



4. “An entrepreneur without managerial savvy is

( )

p g yjust another promoter.”

It is important that entrepreneurs have a styleIt is important that entrepreneurs have a style that leads people. Best entrepreneurs are skilled managers who can be tough‐mindedskilled managers who can be tough minded with themselves and their team, who can say “no” and who ideally are well versed in theno , and who ideally are well versed in the technology on which the company is based.


Entrepreneurial framework for growth

1. Culture

2. People

3 Plan for growth3. Plan for growth

4. Top Team

5. Infrastructure

6 Leader6. Leader


Organization Culture ‐What is yours ?





Leading and building a growth company

CultureA growth oriented organization has an

empowering motivating culture that attractsempowering, motivating culture that attracts

superb people and retains them. It enables them

to thrive and perform at their best.


Culture

Culture to support innovation– Creative, fun and

h ll i k

Culture to support growth

– Customer focusedchallenging work– Autonomous and flexibleEncourage calculated risk‐

Customer focused

– Lots of communication and collaboration– Encourage calculated risk‐

taking– Tolerate mistakes

and collaboration

– Creative problem solving

– Anticipate not just– Learn from successes and failuresSupport innovation by

Anticipate, not just manage change

– Continuous learning– Support innovation by goals, rewards and behaviour

Continuous learning


Culture

Lack of Candor

The biggest dirty little secret in business (Jack Welch)

How candor leads to winning:How candor leads to winning:

• More ideas get surfaced, discussed, pulled apart and improvedimproved

• Generates speed – surface, debate, improve, decide

• Cuts cost – eliminates meaningless meetings reports• Cuts cost – eliminates meaningless meetings, reports….


Who improves the culture?

S perb peopleSuperb peopleSuperb people have the talents, skills and p p p ,

expertise organization needs. They share the

’ l d bl h dlorganization’s values and are able to handle its

growth


Superb People

– Match your values– Are attracted more by vision, goals andAre attracted more by vision, goals and

challenges than money– Want to grow, learn, feel valued and helpWant to grow, learn, feel valued and help

plan the future– Anticipate needsAnticipate needs– Team Players– CreativeCreative– Problem solver


What retains superb people?

Plan for GrowthA written plan provides a long term and short

term framework for growth and innovation. It

guides decision making and enables every one g g y

to focus on projects, tasks, and activities that

l d h i i d llead to the vision and goal


Plan for growth

– Market and customer focused

Vision mission and values– Vision, mission and values

– Goals and objectives

– Strategies and plans

– Milestones


Who improves the plans?

Top TeampEach team member has his/ her own job to do and

must help lead the company. Top team members

must embrace the company’s vision and plan, p y p ,

know how they fit in and lead their own teams to

f ili hfacilitate growth.


Top Team

– Manage their functional areas

Help lead the company– Help lead the company– Plan for growth and innovation

C i t f li t– Communicate for alignment

– Protect and build the culture

A d i h b l– Attract and retain the superb people

– Manage teams pitfalls

– Learn and help each other succeed

– Be role models of company’s values and culture


How Top Team supports growth & innovation?

– Plan for future

Welcome creati e sol tions– Welcome creative solutions

– Listen, communicate and share information

– Reward risk‐taking and learning

Delegate empower and provide resources– Delegate, empower and provide resources

– Model team behaviors


What will enable top team to improve its performance?

InfrastructureOrganizational structure and process must be

clear and simple; support growth; embedclear and simple; support growth; embed the mission, vision and values into the company; and make it easier to get workcompany; and make it easier to get work done.


Infrastructure

– Clarify roles and responsibilities

Let people focus on what not who or how– Let people focus on what, not who or how

– Reduce the need to “reinvent the wheel”

– Shorten time from “concept” to “action”

– Systems for repetitive tasks free up time for creativity

– Key: Open, clear, simple and accessible.Key: Open, clear, simple and accessible.


What will improve the infrastructure?

The LeaderThe one who understands what a leader must

do, and the difference between leadershipdo, and the difference between leadership style and the leaders roles and responsibilities


Leadership makes the difference

‘Th t th i th t f t k‘The truth is that no one factor makes a

company admirable. But if you were

forced to pick the one that makes the

most difference, you’d pick leadership’.most difference, you d pick leadership .

Warren Bennis, 1998


What is Leadership? A Definition

‘Leadership is using our personal p g ppower to win the hearts and minds ofpeople to achieve a common purpose.’

The Leadership Trust FoundationThe Leadership Trust Foundation


A Chinese Proverb

‘As for the best leaders, the people do notnotice their existence.The next best, the people honour and praise.The next, the people fear.And the next, the people hate., p pBut when the best leaders’ work is done, thepeople say, “We did it ourselves”.’

Lao Tsu, c. 500 BC


The Leader

– Mission, vision, values and plans

Communicate; align; protect the culture– Communicate; align; protect the culture

– Build and lead top team

– Maximize corporate resources

– Fit structure and process with the culture and strategy

– Engage in continuous learningEngage in continuous learning

– Anticipate and lead growth transitions

W lk th t lk– Walk the talkEntrepreneurship – Leading to Corporate Excellence 32

The Leader (Continued)What winners are made of(Jack Welch)The Acid Tests:• Integrity• Intelligence• MaturityTh 4 E P F kThe 4 Es + P Frame work• Positive Energy: to thrive on action and relish change• Energize others: inspire their team to take on the impossible – and enjoy the

hell out of doing ithell out of doing it• Edge: the courage to make tough yes‐or‐no decisions• Execute: the ability to get the job done


The Leader (Continued)

What senior – level winners are made of (Jack Welch)

The Acid testsThe Acid testsThe 4 Es + P FrameworkAnd:• Authenticity: self confidence, conviction – at peace with one self•Ability to see around corners: to anticipate the radically unexpected•Penchant to surround themselves with people better and smarter than they are•Heavy duty resilience: learn from mistakes, regroup and then get going again with renewed speed, conviction and confidence


Entrepreneurship atAttock Refinery LimitedAttock Refinery Limited

Attock Oil Group of Companies (AOC) since 1913The only fully integrated group in Pakistan covering all segments of oil and gas sector from exploration, production and refining to marketing of a wide range of petroleum products – Pakistan Oil Fields (POL) ‐ Exploration & Production

– Attock Refinery Ltd (ARL) ‐ Refining– National Refinery Ltd (NRL)‐ RefiningNational Refinery Ltd (NRL) Refining

– Attock Petroleum Ltd (APL) ‐Marketing+Attock Cement Pakistan Ltd (ACPL) Cement– Attock Cement Pakistan Ltd (ACPL) ‐ Cement

– Attock Information Technology Services (Pvt.) Ltd (AITSL) ‐ IT– Attock Gen Limited (AGL) ‐ Power


Attock Refinery Limited – Growth Story1922 Commissioning with 2500 BPD Refining Capacity

1940 Two stage distillation with a capacity of 5,500 & Thermal Cracker

1980 Crude distillation units of 25 000 BPD capacity1980 Crude distillation units of 25,000 BPD capacity

1999 Heavy Crude Unit of 10,000 BPD & Catalytic Reformer of 5,000 BPD Refining Capacity

l2000 Captive 7.5 MW Power Plant

2001 ARL becomes first Refining organization to achieve ISO ‐ 9001:2000 certification

2002 First Refining organization to achieve ISO ‐ 14001:1996 certification

2005 Acquisition of NRL’s 51% shares by Attock Group

2006 First Refining organization to achieve ISO ‐ 18001:1999 certification2006 First Refining organization to achieve ISO 18001:1999 certification

2007 First Refinery/Petro‐chemical to get ISO 17025 Certification

2009 Commissioning of Attock Gen Ltd, 165 MW Power Plant

2010 Approval of Refinery Up gradation Project


Context for change– Consecutive years of rapid entrepreneurial growth

followed by few years of slowed growth

– Changes in market– Industry de‐regularized and increased competition

I t ti l Oil i i– International Oil pricing pressures

– Customers looking for low‐cost solutions to manage rising oil prices

– Top Management desire to build organizationTop Management desire to build organization capabilities and further grow the company

– Maintain competitive differentiation – strategy decisions

– Position the company for its next phase of growth – infrastructure development

– Align culture to capitalize on past accomplishments, and enable future growth and success


Getting started – 20 years growth

Since 2000– Vision, mission and values developed and embedded.Vision, mission and values developed and embedded.– Structure aligned; roles clarified; infrastructure

development initiated– Leadership strengthened and aligned– Feedback and development process implemented– Revised accountabilities implemented– Process developed for managing strategic and business

i t i iti tiprocess improvement initiatives– Renewed emphasis on operational and service

excellence as driver of culture realignmentexcellence as driver of culture realignment


Getting started (contd)

– Near and long‐term strategic plans developed and deployed

– New performance appraisal system introduced– Climate surveys– Benchmarking


Vision, mission & values development

– Consultants engaged from Lahore University of g g yManagement Sciences.

– Developed through consensus at all levels within the company.

– Visioning exercises

– Questionnaires

– Task team


Vision

To be a world class and leading organisation continuously providing high quality diversifiedcontinuously providing high quality diversified environment‐friendly energy resources and

petrochemicalspetrochemicals


Mission

We will utilize best blend of state‐of‐the‐artWe will utilize best blend of state of the art technologies, high performing people, excellent business processes and synergetic organizationalbusiness processes and synergetic organizational

culture thus exceeding expectations of all stakeholdersstakeholders


Core Values

Our success will not be a matter of chance, but of commitment to the following enduring beliefs and values that are gengrained in the way we think and take actions to pursue a climate of excellenceactions to pursue a climate of excellence


Core Values1. Integrity & Ethics:

Integrity, honesty, high ethical, legal and safety standards are cornerstones of our business practices

2 Quality:2. Quality:We pursue quality as a way of life. It is an attitude that affects everything we do for relentless pursuit of excellence

3. Social Responsibility:W b li i t f th it d i th i t f f tWe believe in respect for the community and preserving the environment for our future generations and keeping National interests paramount in all our actions.

4. Learning & Innovation:We embrace lifelong learning and innovation as an essential catalyst for our future success. We believe in continuous improvement and to seize opportunities inherent in change to shape the future

5. TeamworkWe believe that competent and satisfied people are the company’s heart, muscle and p p p p y ,soul. We savour flashes of genius in organisation’s life by reinforcing attitude of teamwork and knowledge sharing based on mutual respect, trust and openness

6. EmpowermentWe flourish under an ecosystem of shared understanding founded on the concept ofWe flourish under an ecosystem of shared understanding founded on the concept of empowerment, accountability and open communication in all directions

45Entrepreneurship – Leading to Corporate Excellence

Embedding Values ‐ Approach

– Sharing of values at all levels– Facilitated articulation and understanding of values to everyFacilitated articulation and understanding of values to every

employee in sessions by CEO, top team and consultant.– Communicated values as critical part of organization change

initiative launch – the ”foundation” for change– Engaged extended leadership group to discuss values, and

identify aligned competencies and behaviorsidentify aligned competencies and behaviors

– Continually identified inconsistencies between current work processes and practices and determined opportunities forprocesses and practices and determined opportunities for strengthening alignment

– Value of the Month Celebration


Barriers & Challenges

– Culture does not support entrepreneurship way of thinkingof thinking.

– Overlapping roles and responsibilitiesT b d d i i i / i k– Top team bogged down in trivia/ routine tasks.

– Lack of support– No alignment of goals and values

– Limited opportunities for mentoring and pp gnetworking.


What's Changed?

– Technology – Throughput– Human Resource– Exports – Capacity enhancement / Upgradation

i ifi i– Diversification – Corporate Social Responsibility

P fit– Profit


Technology: Processing Capability– Can process lightest to heaviest crudes available (23‐65

API)– Only Refinery in the country which can process heavy

crudes– Installed a Heavy Crude Unit (HCU) in 1999 to cater for

increased heavy crude processingTh R f U it i t ll d i 1999 hi h– The Reformer Unit was installed in 1999 which ultimately ensured unleaded Gasoline production. Both Units equipped with State of the art Distributed– Both Units equipped with State‐of‐the‐art Distributed Control System (DCS)

– Other Units also upgraded to DCS– Other Units also upgraded to DCS


Technology: Value Addition– Polymer Modified Bitumen (PMB)– Auto Tank Gauging – Diesel maximization– Unleaded high RON Mogas

J t B t h Oil (JBO)– Jute Batch Oil (JBO)– Jet Fuel(JP‐8)

Cutback Asphalts– Cutback Asphalts– Optimization of chemicals– Indigenization of Lab equipmentIndigenization of Lab equipment– Vacuum operation revival‐ HSD yield– Quality management system.


Technology: IT

– HYSYS ‐ Process Simulation– Process Industry Modeling System (PIMS) ‐

Linear Programming model for Refinery Operations

– Primavera ‐ Planning and Scheduling Projects – Oracle Financials– Payroll & HR ERP softwarey– Maintenance Management System (MAXIMO)– Radio Frequency Identification system (RFID)Radio Frequency Identification system (RFID)


Throughput

OPERATIONALACHIEVEMENTS

Year Total BPD

1999 00

•HIGHEST DAILY CRUDE RECEIPT53 041 BARRELS NOVEMBER 25 2010

ACHIEVEMENTS1999-00 11,042,746 32,4792000-01 11,588,421 34,0842001-02 12,768,550 37,555

53,041 BARRELS, NOVEMBER 25, 2010

• HIGHEST DAILY THRU’PUT43 318 BARRELS OCTOBER 11 2010

2002-03 13,032,209 38,3302003-04 12,566,709 36,9612004-05 14,539,298 41,541 43,318 BARRELS,OCTOBER 11, 201014,539,298 41,5412005-06 14,567,216 41,6212006-07 14,074,624 40,2132007-08 14 900 742 42 5742007-08 14,900,742 42,5742008-09 13,126,425 36,9922009-10 13,492,564 37,5022010 11 14 289 463 40 7112010-11 14,289,463 40,711


Throughput

BPD


Throughput ‐ Capacity Utilization

37,50035,000 40,000 42,000

100% 102%111% 104% 101%

106%

BPD,

BPD,

BPD,

BPD

93% 97% 100% 102% 99%104% 101%

88% 89%97%

1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11


Human Resource• Climate Survey

• Promoting open communicationPromoting open communication

• Embedding Core Values

• Formal Coaching and Counseling

• Forming Help Desks (HR, Finance, IT & etc)g p ( , , )

• Intra/ Inter departmental meetings to improve communication

• Career & Succession Planning of staff featuring cross

functional rotation


Human Resource (Continued)

• Performance Improvement Program (PIP)

• Revamping of Grievance Handling Procedure

I l ti l i lt• Inculcating learning culture

• Skill Development Programs

• Transformation & communication of HR policies

• Strengthening of Performance Management System


Human Resources (Continued)

• Organizational Restructuring & Manpower Planning

• Revision of Limits of Authority company wide

• Revamp of the entire recruitment process

• Revision of Employment terms and Conditions• Revision of Employment terms and Conditions

• Revamping Outsourcing process


Exports

AfghanistanG li i l i– Geo – Political issues

– Regional competition

– Logistics

– Quality and reliabilityQuality and reliability

– Local presence


Exports – Naphtha

Far East, South Asia & Middle East

Wh t ?– Why exports?

– Infrastructure/ Logistics

– Monopoly of Trading Houses

– Marketingg

– Synergy with NRL


Capacity Enhancement / UpgradationPre‐Flash Unit– Additional 20,000‐25,000 BPD crude from TAL Block (near Kohat)

projected within 3‐4 yearsprojected within 3 4 years– Pre‐flash with distillation unit least cost option. An increase of

10,400 BPD is being installed.Preparation of Front End Engineering Design Package (FEED)– Preparation of Front End Engineering Design Package (FEED) completed by original Designer of the Unit on which the Preflash will be added.

Isomerization Unit – Isomerization Unit (7,000 BPD) to upgrade PMG Quality through

increase of Octane of Light Straight Run Naphtha (LSRN) is beingincrease of Octane of Light Straight Run Naphtha (LSRN) is being installed.

– FEED for the project completed by M/s UOP USA also the Licensor of the Technologythe Technology


Capacity Enhancement / Upgradation

Diesel Hydro‐Desulfurization Unit (DHDS) – Diesel HDS (12,500 BPD) for reduction of sulfur to Euro‐IIDiesel HDS (12,500 BPD) for reduction of sulfur to Euro II

standard (500 wt ppm)– FEED for the project completed by M/s UOP USA also the

Licensor of the TechnologyLicensor of the Technology

FEED for Offsites/Auxiliary UnitsFEED for Offsites/Auxiliary Unit completed by ENAR Petrotech– FEED for Offsites/Auxiliary Unit completed by ENAR Petrotech Services (Private) Limited , Pakistan

ARL IS IN THE BIDDING PHASE OF ENGINEERING– ARL IS IN THE BIDDING PHASE OF ENGINEERING, PROCUREMENT, CONSTRUCTION & COMMISSIONING (EPCC) OF THE PROJECT


Diversification: Machike Morgah Taru Jabba Pipeline Project (MMTJPP)

– Most efficient & reliable transportation mode– Eliminates heavy traffic on congested roads– Reduced accidents– Reduced road infrastructure maintenance cost

R d d i l ll i– Reduced environmental pollution– Ensures product quality (no adulteration)– Eliminates dumping– Eliminates dumping1. Length 450Km2. Estimated cost US $ 270 Million$


PARCO PipelineMMTJP P j tMMTJP Project MMTJP (JP Line)


Diversification: Power Generation

– Two IPP projects with cumulative capacity of 500 MW based p j p yon FFO


CSR: HSEQ

Improvements / Measures taken during last five years

– Third Party Audit (Dupont)– Central HSEQ Committee formation– Fire Proofing of Plants & Crude Decanting Station Steel Structure– PH & TSS(total suspended solid) control of Effluent Water– Commissioning of gas detection and Fire alarm system– Segregation of Oily/Water drains– Occupational Health and Behavior Safety Surveys– Fire network study and up gradation of system– workplace hazard identifications and risk assessments program– First national HSE conference at ARL– Best Sustainability Report awards (ACCA‐WWF) for last three years


Environmental Compliance2005 vs. 2011

Parameter Test Method NEQS Limits(Max )

Average 2005

Average2010

Average 2011

(Max.)

Temperature, °C Standard 40 29 25 24

pH USEPA 150 1 6 to 9 8 9 8 4 7 6pH USEPA 150.1 6 to 9 8.9 8.4 7.6

Chemical Oxygen Demand, ppm USEPA 410 150 261 141 127

Biological OxygenBiological Oxygen Demand, ppm USEPA 405.1 80 41 38 65

Total Suspended Solids, ppm USEPA 160.2 200 246 33 42Solids, ppm

Oil & Grease, ppm USEPA 413.1 10 25 7 8

Phenol ppm USEPA 420 1 0 1 0 03 0 01 0 04


Phenol, ppm USEPA 420.1 0.1 0.03 0.01 0.04





CSR: Morgah Biodiversity Project (MBP)

Objectives– Public‐private partnerships in

bi di it ti fbiodiversity conservation for the benefit of all stakeholders, especially the poor.

– Ex situ conservation of endangered and important flora and fauna of Potohar region.

– Creation of awareness and dissemination of information

Project PartnersARLUNESCAPon biodiversity conservation.

– Awareness of interrelationship between biodiversity

UNESCAPEconomic Affairs Division Pakistan Museum Of Natural y

conservation and poverty alleviation.

History


CSR: National Cleaner Production Center (NCPC)

Objectives– Waste minimization at source rather than end of pipe

– Establishment for sustainable ll i ipollution prevention

– Policy support and production of Clean Fuels / Clean Productsof Clean Fuels / Clean Products

– Promote Cleaner Production technologies for waste gMinimization

– Capacity Building at local level


CSR: Attock Sahara Foundation (ASF)

Objectives

Women development– Women development

– Vocational & Technical

d tieducation

– Health & hygiene

P ll i i– Poverty alleviation


CSR: Attock Hospital Limited (AHL)

Objectives– To facilitate quality health services to employees & community

– Provision of health care inProvision of health care in an equitable, affordable accessible and cost effective manner

– Creating healthcare awareness by seminars,awareness by seminars, lectures & workshops

– Free medical services in d ideserving cases


Other CSR Activities

– Renewable Energy/ Re‐cycling– State‐of‐the‐art smokelessState of the art smokeless Flare

– Effluent Treatment.Solid Waste Management– Solid Waste Management

– Water Supply– Donations– Sports– Human Resource Development


GROSS REVENUES

Rs. Million

98 944103,669

113,740 144,949

69,159 74,089

98,944

24,827 27,446 30,343

47,632

2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11


Profit: Non‐Refinery Income

Rs. Million

PKR ‐Millions


Profit: Product Slate (value addition)

30%

35%

20%

25%

30%

5%

10%

15%

0%Motor Gasoline

Export Naphtha

Diesel Kerosene/ Jet Fuels

FFO Asphalt Others

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2010‐11


Key lessons learned

– Keep everyone focused on the plan– Goals and values alignment is the key– Top Team has to “walk the talk” in order to provide

consistent message to workforce regarding the l C ’ b i i ivalues. Can’t be one time event or communication –

have to be modeled and lived every dayPeople are critically important– People are critically important

– Reward risk‐takers, innovators and learners– Hire well (4E+P) be flexible and trust your peopleHire well (4E+P), be flexible and trust your people– Build a top team that fosters innovation and focuses

on growthg


Key lessons learned (contd)

– Budgeting (Breaking the ritual)– Power of differentiation– Empowerment – Identifying change agents– Extend our networks so we are able to share and

consolidate our resources.P id t h ti l l d l– Provide mentors who are exceptional role models.


Thank YouThank You


يا أيها الذين آمنوا أوفوا بالعقود




Documents

Entrepreneurship –Leading to Corporate Excellence€¦ · while still believing in their ideas. Entrepreneurship –Leading to Corporate Excellence 8. Characteristics of a Successful