When Values Die, Corporations Die!
Why did NNPC import adulterated fuel into Nigeria?
About 30 months ago when I was still in Nigeria, I facilitated a 5-day workshop on Corporate Values and Governance for Senior Executives of the Nigerian National Petroleum Corporation (NNPC).
A few days back, news broke about adulterated PMS (Premium Motor Spirit) being circulated in Nigeria and there were reports of people’s cars getting knocked down and damaged by the fuel. This would later be followed by scarcity of fuel, subjecting folks and businesses across the country to hardships.
I am aware that investigation is ongoing to unravel exactly how a corporation as big as NNPC imported adulterated fuel into the country. While everyone awaits the report of the investigation, the question many have been asking is: how the hell did this happen?
Well, in my workshop with the execs of the corporation, we discussed that such a breach of standards could happen if lip service was paid to corporate values, and we worked together to design measures to strengthen corporate values at the corporation. Apparently, those measures were never followed through.
Here is the article I wrote after the workshop, detailing my discussion with the execs and explaining what needed to be done to strengthen corporate values at the NNPC.
It’s day 1 of my 5-day workshop with Senior Executive of the Nigerian State-owned Oil and Gas Corporation. My participants include the top management — AGMs, JV Team Leads, Divisional Heads and the likes. I started the training getting the participants immersed in the imperatives of Effective Organizational Values.
And when you are talking about corporate values and how a meltdown in such could lead to catastrophic consequences, there is no better place to start than the story of Enron.
My privileged meeting and interview with Dr Ben, the Philippino ex-driver of one of the three main actors in the Enron’s scandal: Jeffery Skilling, in 2014 in Kuala Lumpur, Malaysia, means that I have the front-row-seat, complete and unadulterated account of the Enron story.
The entire scandal happened in Dr Ben’s hands. As I told the Enron’s story, I could see both a delight and at some point palpable fear on the faces of the NNPC execs. They would eventually be calling me Mr Enron towards the end of the day.
To set the stage, I showed the participants the first 10 minutes of the movie: ‘Enron: the Smartest Guys in the Room’. And then shared with them how Enron moved from being the darling of the Wall Street with over $70 billion in market cap and a stock price hovering around $90/share (in August 2000) to being the dog of the Street with a stock price below $.40/share (40 cents) and in Chapter 11 Bankruptcy by December 2001.
I also told them that the Enron story goes beyond these numbers. It’s a human story.
The scandal brought down one of the biggest audit firms at the time, Arthur Andersen, where over 85,000 people lost their jobs. More than 20,000 folks that worked for Enron also became jobless. To top that up, Enron employees lost over $2 billion retirement savings invested in the company’s stock. It also led to the horrific suicide of John Cliff Baxter, an exec and close confidant of the CEO.
All these happened due to the greed of few men, top three of whom were Kenneth Lay (Founder/Chairman), Jeffery Skilling (CEO) and Andrew Fastow (Chief Financial Officer).
In order to fund their posh lifestyles and continue to enjoy lavish Executive Compensation (Ken Lay alone was getting over $300 million in compensation every year), they had to project the company to the outside world as being strong financially. They overstated their earnings using a creative accounting system called Mark-Market accounting and shove off their liability (debts) using Special Purpose Vehicles such as Joint Ventures.
And all these happened in spite of the fact that Enron had well-articulated corporate values: integrity, communication, respect and excellence. Fortunately, NNPC also has core values: respect for the individual; staff development and growth; integrity, transparency and accountability; professional excellence. Their values kind of look similar right? Well, that worried me a bit.
Moreover, the point is not in having values. The point is in ensuring that every single person in the organization, starting with the CEO and other top management staff, live the values. So, I guided the NNPC execs through the process of developing effective corporate values as well as measures to ensure that those values are lived.
The first challenge in making sure that values are lived is to ensure that people understand the specific behaviours that amount to each value. So, I grouped the participants into four teams — one for each value — and tasked them to come up with the specific behaviours for respective value.
The teams’ submissions were discussed and agreed on by everyone. This is something the corporation didn’t have before. Well, now they have it. It was a hugely interesting exercise and we all had fun with it.
And then I went on to outline two other important components in living corporate values: first, recognizing staff who demonstrate commitment to the organization’s values by praising (privately and publicly) and giving them an award. And second, evolving strategies for ‘doing’ corporate values. On the later, I proposed a few actionable strategies.
1. Appointment of Values Ambassadors for each of the four NNPC values. Four execs graciously volunteered to take on these roles and the entire class approved. Their responsibilities include: to inspire and undertake programs that enhance the capacity of colleagues and all staff of the corporation to live the respective values.
2. Initiation of Weekly Executive Values Meeting to discuss and review issues around the organization’s core values, how they are being lived, success stories, challenges as well as recommendations for specific behaviours that strengthen each value.
3. Introduction of Quarterly GMD Values Awards. This is by far my biggest achievement in this seminar. This is not only because such an idea was not there before, but because of the way the participants accepted and jumped at it.
The award program will kick-off initially through an existing platform: the corporation’s quarterly meeting of heads of strategic business units and divisions. Later on, it will be a stand-alone special event. To crown my joy, I would be invited every quarter to anchor the award ceremonies at the corporation’s HQ, NNPC Towers in Abuja. Talk of buying yourself a job through sheer attitude of going the extra miles.
I sure went the extra miles in this training. For me, that’s nothing special. It’s the only way to go. It’s my hope that the rest of the training will be as interactive, enlightening and productivity-inducing.
PS: None of the three initiatives we discussed ever happened. I made several attempts to visit and encourage the team we trained to do something about the initiatives, it was all to no avail. So, personally, I was not surprised to hear news of adulterated fuel being brought into the country. When corporate values are weak and are mere platitudes, what you get is scandals. My fear is, there are more scandals to come.
