Case SIBUR

SIBUR is Russia’s largest petrochemicals company. The holding company includes more than 30 enterprises in different parts of the country – Nizhnevartovsk, Krasnoyarsk, Tver, Nizhny Novgorod and another dozen cities. SIBUR’s business involves the processing of associated gas in a wide range of valued added products– liquefied gases, polymers, plastics, synthetic rubbers, tires, mineral fertilizers. SIBUR actively upgrades existing enterprises and is building new production capacities based on state-of-the-art technological solutions.

TASKS AND SOLUTIONS

We often encounter a situation where a company already has competencies, but nobody has used them in line with their intended purpose, in other words, no assessment has been performed on them, and management of the HR service has well-founded fears that these competencies may not be entirely correct. Our task in this case is to review the extent to which these competencies may be categorically assessed using standard methods: the assessment center or workplace observations, and the extent to which such an assessment turns out to be valid subsequently, in other words, it is reflected in the employee’s performance.

We performed exactly such a project at SIBUR where there were six common leadership competencies to be applied to assess the directors of plants and the heads of central offices. These competencies were approved by company management and are described as follows: the names and list of positive indicators for each competency.

Example of the old description of the competency.

PEOPLE DEVELOPMENT AND EFFECTIVE TEAMBUILDING
  • Invests significant time and effort in the long-term planning and career development of key employees.
  • Possesses people assessment and motivation skills. Monitors compliance with established staff assessment and training procedures.
  • Emphasizes the importance of staff development and encourages subordinates to invest time and effort in this process.
  • Has sufficient management and life experience to resolve serious, large-scale tasks
  • Benchmarks his or her abilities (strengths and limitations) against the scope of the responsibility and authority that he or she assumes.
  • Is not afraid of attracting and developing strong people, is not afraid of competition.
  • Builds long-term relations with partners, managers and colleagues.
  • Has gained long-standing authority with a broad range of administrative and business circles.
  • Develops and reinforces the Company’s image in the region.
  • Successfully holds negotiations at senior management level at the administration of the region and client organizations. Flexibly leverages administrative, information, personal and other influence in order to attain the enterprise’s goals.
  • Coordinates his or her work with the managers of related divisions. Takes account of the influence of his or her actions on the work of the related division. Knows how to find solutions to disputes that comply with the underlying interests of all parties.
  • Knows how to lead the process and also be a team member. Can lead and also accept the leadership of his/her colleagues.

 

These were the actual competencies:

In order to attain the set objectives of correcting the competencies, we could not restrict our work to a change in the wording, as we didn’t know which competencies were key competencies and whether they all actually reflected forms of behavior that are important for work. Unfortunately, in most instances we cannot trust the opinion of managers, as they are unable to name certain qualities, taking them for granted, while some of the qualities indicated by them may merely reflect their own personal preferences, and do not determine success at the workplace.

Consequently, in such instances work should be analyzed with the same quality as if there were no competencies. And this is the approach that we adopted on this occasion.

As the company had no clear-cut strategy, we started our work by studying all available information on SIBUR from the Internet, the press and SIBUR’s corporate magazine. We collected any information that might throw some light on the company’s strategic objectives: research notes on the industry, the texts of interviews given by President Dmitry Konov, the company’s history, project history, information on investments, etc. Based on the results of this analysis, we compiled a forward-looking interview plan with the President of the Company, which took in real time no more than one and a half hours. During the discussion with Dmitry Konov, we asked him to indicate the names of company managers who would be able to tell us in detail about aspects of the work that we touched upon briefly in our conversation. After our interview, we compiled a list of the managers with whom we had to meet for detailed analysis of the work.

In general the list of experts compiled based on the recommendations of Dmitry Konov, consisted of his immediate subordinates: vice-presidents and directors of business areas, in total eight people. In instances where directorates were still being performed or the director had been appointed comparatively recently, we conducted an interview regarding their current position based on the critical incident method. We conducted interviews with the vice-presidents and the directors who had worked at the company for a year or more using the repertory grid method, in the case of positions below the level of: general directors of plants, functional directors of plants and the heads of the directorates of the central office.

After conducting all the interviews, we started analyzing the collected information. During this process we formulated the main behavioral components to be included in the existing six competencies.

We prepared our proposals on how to distribute the competency-based behavioral constructs and met with the HR Director Svetlana Chekalova and the head of the assessment and development directorate Oleg Martynov for their approval. After a joint discussion, we finalized the competency model.

DIFFICULTIES

At the start of the work, we had significant concerns about the Corporate Attitude competency, as it had been worded extremely vaguely, and such competencies, as we have already noted, are the hardest to measure. During analysis of the work, corporate attitude or loyalty had not been mentioned once as critical qualities. According to the representatives of the HR Directorate, this competency is intended to demonstrate the requirement to adhere to uniform rules and work according to uniform standards. This requirement was extremely important, as SIBUR was at the time consolidating all the enterprises under one management company of the holding company, and the managers of the holding company were confronted by the serious problem of non-compliance by enterprises used to working on standalone basis with the instructions of the head office.

Based on the results of the analysis of our work it transpired that adherence to uniform rules originates from the strategic goals of the holding company, the individual’s awareness of the role played by his or her enterprise or division in the uniform business process chain of the united SIBUR. In other words, the manager needed strategic vision in order to demonstrate a corporate attitude.

If we had modeled the competencies from the outset, it is quite possible that we would have not proposed including corporate attitude in the competency model. However, this competency already existed and we could not reject it. Furthermore, after the approvals of Svetlana Chekalova and Oleg Martynov, we concluded that this competency should be retained as the actual word corporate attitude should be present in the model. Consequently, this competency played a role in forming the culture on the one hand and being declarative on the other hand. We agreed that it would be difficult to assess whether a manager was more or less corporate based on a five-point scale. However, the actual appeal to this formal requirement was far more important for this development period of the company and it was sufficient to identify people, whose level of this competency was inadequate, without compiling a rating.

After reading a description of this competency, you will see that it can only be assessed in full during a workplace observation. This was also the reason why it had been established.

RESULT

After the work, the six leadership competencies retained their names and substance, but the descriptive format changed. Each competency was now described on the basis of narrower behavioral components, with three for each competency. Each component contained three or five paired behavioral indicators, describing effective and ineffective behavior. The competencies had no standard definitions and were described briefly by the three criteria.

In addition, the components of the competencies included behavioral models, which had either been missing from the previous version or had not been disclosed, thereby complicating their assessment. Such components included for example, Organization, which had been implied as par for the course, but had not been presented anywhere in the form of a behavioral indicator for the assessment. In actual fact, the assessment of the top managers of SIBUR disclosed that virtually all of them possessed well-developed organizational skills. However, as the competency model should be used in future to select managers, this quality could not be disregarded, as nobody could vouch that it would be so well developed at a representative of another company, who is subsequently recruited at the company. Excluding this quality from the model would imply its elimination from the assessment. In the long term, this could result in the risk that in the event of a change in the management team at some point the absence of this quality would be too perceptible, which could result in organizational problems.

Making a small theoretical digression, we would like to point out that when modeling competencies, one should not focus on the current status of the organization and should in no cases eliminate qualities that are critically significant for work even if they are not recognized as such by company management.

WHAT HAPPENED NEXT

The developed competency model was used to select the candidate pool, and also for the development centers organized for the general directors of the plants and the heads of the directorates of the management company. The ratings compiled based on the results of the assessment of the general directors of the plants coincided in general with their performance ratings, which served as an excellent validation of the developed model.

SIBUR Leadership Competencies

Competencies
Components
Leadership Goal-setting, Motivation, Persuasion
Disciplines of Execution Responsibility, Attainment of the Result, Organization
Strategic Vision Analysis, Decision-making, Commercial Awareness
People Development and Effective Teambuilding Communication, Cooperation, Development of Other People
Openness to Changes Initiative, Adaptation, Self-Development
Corporate Attitude Loyalty, Compliance, Corporate Understanding

Example of the description of competencies in the SIBUR model

COMPETENCY 1. LEADERSHIP:
Goal Setting, Motivation, Persuasion
Goal Setting
Indicators of effective behavior
Indicators of ineffective behavior
  • Sets specific, measurable and attainable goals.
  • Allocates within the team the objectives required to attain the goal.
  • Delegates authorities and responsibility, taking account of the specifics of individual employees.
  • Checks whether subordinates have correctly understood set goals and objectives.
  • Sets unstructured and vague goals.
  • Performs work that could have been delegated to other people.
  • Does not take account of the individual specifics of employees when allocating tasks.
  • Does not care whether subordinates understood set goals correctly.
Motivation
Indicators of effective behavior
Indicators of ineffective behavior
  • Inspires and motivates other people to achieve results.
  • Uses different motivational methods, depending on employee specifics.
  • Motivating other people to achieve results, integrates the interests of employees and enterprise.
  • Ignores employee motivation.
  • Applies the same motivational approach to everybody.
  • Disregards the interests of employees when setting goals and during work.
Persuasion
Indicators of effective behavior
Indicators of ineffective behavior
  • Expresses his/her thoughts clearly and in a structured way.
  • Persuades other people and elicits their support to promote ideas and projects.
  • Uses different influencing styles, depending on the situation and the person he/she is talking to.
  • Presents various arguments in defense of his/her opinion.
  • Defends his/her ideas and decisions in communications with managers at different levels.
  • Expresses his/her position in a confused way.
  • Agrees with the opinion of other people irrespective of the strength of their position. Does not secure the support of other people to promote ideas and projects.
  • Uses one strategy of persuasion, irrespective of the specifics of the situation and the individual that he/she is talking to.
  • Does not present arguments or uses only one.
  • Acts irresolutely or avoids promoting his/her ideas and decisions in communications with managers at different levels.
COMPETENCY 6. CORPORATE ATTITUDE:
Loyalty, Compliance, Corporate Understanding
Loyalty
Indicators of effective behavior
Indicators of ineffective behavior
  • Actively participates in projects conducted by the head office of SIBUR and provides comprehensive support and assistance for them on site.
  • Adopts decisions, prioritizing SIBUR’s interests, even if they contravene his/her personal interests and the interests of his/her division.
  • Understands and explains to other people how SIBUR’s goals are related to the goals of a specific enterprise, division.
  • Ignores the projects of the head office of SIBUR or obstructs them.
  • Only focuses on his/her personal interests.
  • Does not link SIBUR’s goals with the goals of a specific enterprise and does not clarify the links between them to other people.
Compliance
Indicators of effective behavior
Indicators of ineffective behavior
  • Enforces stringent compliance with the business rules adopted at SIBUR in the corporate culture of the enterprise.
  • Points out to colleagues and/or subordinates instances of deviation from corporate requirements and norms.
  • Does not enforce stringent compliance with the business rules adopted at SIBUR in the corporate culture of the enterprise.
  • Does not notice and does not point out to other people instances of the violation of corporate requirements and norms.
Corporate Understanding
Indicators of effective behavior
Indicators of ineffective behavior
  • Clearly demonstrates that he/she understands that his/her actions have a direct impact on the success of SIBUR’s business in general and the activities of other divisions.
  • РConsiders his/her own activities and the activities of his/her own division as part of the overall objective, understands his/her contribution to the financial performance of his/her enterprise and SIBUR as a whole.
  • When taking action, does not consider how such actions will have an impact on the success of SIBUR’s business in general and the activities of other divisions.
  • Considers his/her activities and the activities of his/her division separately from SIBUR in general.