Source: By Kevin Crowley, Bloomberg
The 140-year-old oil company is making more money than ever. Yet the pandemic exposed deep cultural problems—and talent is fleeing.
Shortly after Exxon Mobil Corp. lost its battle with an activist investor last year, an executive named Bill Keillor decided to give his department a morale boost. It had been a difficult year and a half for Exxon employees. Covid-19 and plunging crude prices had led to halted salary increases, reduced benefits, and, for the first time in decades, thousands of layoffs. Anxiety was coursing through the organization.
So Keillor, whose title is global IT vice president, and his leadership team organized an awards ceremony to take place at Exxon’s Houston campus. They posted an invite on Yammer, an internal social network, with Keillor’s face cropped onto a tuxedo. With many employees still working remotely, most tuned in via Zoom.
Keillor started by thanking everyone for their hard work over the past year, presented awards to three top-performing teams, and then opened the floor to questions. It was at this point things started to unravel, according to four people present who spoke on condition of anonymity. The software developers, data analysts, and technicians who run Exxon’s vast computing network, which helps the company manage everything from drilling wells to pipeline flows, were in no mood to celebrate. Emboldened by the virtual format, they began firing off tough questions. They wanted to know if there would be more layoffs, whether remote working would continue after the pandemic, and whether Exxon was willing to raise pay to the level of major tech companies.
To an outside observer, the scene might have appeared like a slightly tense version of your average corporate town hall. But within Exxon, famous for its top-down, buttoned-up, authoritarian culture, where employees rarely challenge their superiors, and certainly not in an open forum, the moment had the strong whiff of rebellion. As Keillor bristled, other managers stepped in to take some questions, deflecting attention from the boss. But eventually, Keillor had had enough and snapped.
If you want to be a “hotshot” and triple your pay working for Amazon, then go right ahead, the people recall him saying. “Good luck to you.”
Rather than be humbled by the scolding, staffers began circulating memes mocking the event in private chat groups, which rapidly spread across the company. One depicted a long-term career at Exxon as a car hurtling off a highway. Another compared the awards ceremony to a piece of tape used to patch a leaking barrel of water. Others suggested it was about time employees take Keillor up on his advice and quit.
A year and a half later, even as its stock surges again and Exxon makes more money than it has in its 140-year history, the company has experienced the highest attrition since its merger with Mobil in 1999. Of the 12,000 departures globally in the past two years, less than half were from layoffs. “Like nearly every company, attrition increased in the last two years, but we don’t see that as a long-term trend,” Exxon said in a statement. “Importantly, we are seeing good results when hiring top talent for roles throughout the company, at entry-level and for senior executive positions.”
But a Bloomberg Businessweek investigation involving interviews with more than 40 current and former employees (many of whom requested anonymity because Exxon hasn’t authorized them to speak publicly), as well as reviews of dozens of internal documents, reveals one overriding reason talent is fleeing: a culture that’s increasingly out of step with the world around it. Those interviewed describe an organization trapped in amber, whose insular and fear-based culture—once a beacon of corporate America—has become a drag on innovation, risk taking, and career satisfaction. Although many expressed pride at working for an industry leader, they were also frustrated by how slow it was to invest in some of the energy industry’s biggest breakthroughs over the past decade, including shale oil and low-carbon technologies, making it a place where the best and brightest no longer want to spend their best years. “I was bored at my job,” says Avery Smith, who earned more than $100,000 a year as a data scientist right after graduating from college and quit last year, echoing what many other former employees told Businessweek. “I was pretty fed up with not innovating.”
Exxon’s performance ranking system, which pits employees against each other, dominates the day to day. Subordinates are told not to speak out against their bosses in meetings for fear of being placed at the bottom of the rank and pushed out. Employees are reluctant to raise problems or speak freely about environmental issues. Senior managers too often promote people who look and sound like themselves at the expense of technical experts willing to deliver hard messages, and some employees of color say they’ve been marginalized. “Agreeability to senior leadership has become more important than capability,” says one executive who left the company last year after two decades. “Unfortunately this accelerated during the pandemic.”
Exxon spokesperson Amy von Walter rejects those characterizations. “The idea that ExxonMobil’s culture is what these employees say it is doesn’t hold water for two reasons: how many people join this company each year and how long people stay,” she wrote in an email. “No culture is perfect and it’s far too easy to take a few data points and paint with a broad brush, but that doesn’t produce an accurate portrait.” (In response to the Keillor episode, von Walter says Exxon encourages candid workplace conversations, “although we may not get it right every time.”)
But CultureX, an organization out of MIT that evaluates corporate culture based on Glassdoor reviews, says these problems run so deep that Exxon now ranks below industry benchmarks for 143 of the 196 cultural issues it measures. According to CultureX co-founder Charlie Sull, innovation, collaboration, and psychological safety fell far below those of oil industry competitors, whereas pay and benefits ranked above average. Exxon, he says, appears to be using remuneration and perks “to compensate for a culture that faces significant challenges with toxicity.”
Exxon, which traces its roots to John D. Rockefeller’s Standard Oil, is used to being public enemy No. 1. It’s incurred the wrath of politicians and civil society for being too powerful, too profitable, and too polluting. But rarely has it suffered such discontent within its own ranks. “Upper management doesn’t like to hear bad news, so to stay at Exxon long term, you have to drink the Kool-Aid,” says Dar-Lon Chang, a mechanical engineer who left the company in 2019 after more than a decade. “This doesn’t sit well with younger people and especially those concerned about the climate crisis.”
Since losing the campaign to Engine No. 1, a tiny activist investor firm, Exxon has reformed its climate strategy. Under Chief Executive Officer Darren Woods, it’s pledged more ambitious emissions reduction targets, increased spending on clean energy, and elevated its low-carbon division to the top of the corporation. It’s even made a series of rare external hires including Chief Financial Officer Kathy Mikells from Diageo Plc and low-carbon head Dan Ammann, who previously ran General Motors Co.’s autonomous vehicle startup. It’s condensed 11 businesses into three and is on track to cut costs by $9 billion by 2023.
By financial standards, Woods’s plan is working. The stock is up 60% this year, ahead of its major peers, and closing in on a record high. But if Exxon has any shot at dominating the volatile energy transition over the next century, it will need to attract and hold on to the next generation of scientists, engineers, and technologists. “We can talk all day about low carbon,” says one recently departed Exxon executive. “But first we’ve got to decarbonize the culture.”
https://governorswindenergycoalition.org/exxons-exodus-employees-have-finally-had-enough-of-its-toxic-culture/