LEADERSHIP DEVELOPMENT

PROCESSES TO ASSESS LEADERSHIP

POTENTIAL KEEP SHELLS TALENT
PIPELINE FULL
Identification and development of its future leaders is serious business at Shell
Chemicals, something that begins at the recruiting stage and continues throughout the length of an employees time with the company. With tools to assess
leadership potential, based on a framework of desired leadership competencies,
employees are better able to understand and achieve their full potential, while
the company can better judge the shape and needs of its talent pool for senior
leaders. 2005 Wiley Periodicals, Inc.

Kim E. Ferrarie

(CEP), originally developed by its parent, the

Royal Dutch/Shell Group of Companies, to identify leadership ability. Thats when doors started to
open for Peterson. I began to have more constructive discussions with my managers about my
leadership potential and the type of positions I
needed to move ahead.
As part of the CEP process, Peterson and her
managers determined that for her to achieve her
goal of site manager, she needed more experience
in functions outside of manufacturing. The company arranged a year-and-a-half assignment as a
strategy and change manager at corporate headquarters in Houston, Texas, which exposed her to
a broader spectrum of the business, including finance, procurement, research, transportation, and
human resources, and Peterson learned quickly

renda Peterson began her career with Shell

Chemicals1 23 years ago as a chemical engineer at the Norco refinery and chemical facility
near New Orleans, Louisiana. At the time, she was
one of only three female engineers among the
1,500 employees at the complex. No formal
process existed for career advancement, and Peterson learned that if you wanted to get ahead, you
needed to know someone. The implementation of
a job posting system in the early 1990s gave her a
tool to begin to take charge of her career development. She applied for and won the job as Health,
Safety, and Environmental (HSE) manager at another Shell Chemical manufacturing plant in Geismar, Louisiana.
In 2001, Shell Chemicals LP implemented a
global process called Current Estimated Potential

Kim E. Ferrarie is vice president, Human Resources, for Shell Chemical LP in the United States, and also serves as the companys manager,
Global Operational Excellence Human Resources. She has more than 17 years in the human resources field, including previous assignments
with General Electric, Honeywell, and PepsiCo.

JOURNAL OF ORGANIZATIONAL EXCELLENCE / Summer 2005

2005 Wiley Periodicals, Inc. Published online in Wiley InterScience (www.interscience.wiley.com) DOI: 10.1002/joe.20059

17

18

Kim E. Ferrarie

Exhibit 1. The CAR Assessment Criteria

and well. Today, she is general manager of the Los

Angeles Refinery, where she oversees activities
of a 450-member staff.
By identifying individuals with learning agility
and developing them for future senior leadership
positions, the CEP process at Shell helps employees such as Peterson achieve their full potential. As Peterson puts it, CEP helps facilitate discussions around what you want to achieve as an
employee and what the company sees as your
long-term potential contribution.

interpersonal qualities of a leader. The CAR criteria are shown in Exhibit 1 and further defined
below:

THE CORE OF THE CEP PROCESS: THE

CAR CRITERIA

The CEP process is built upon criteria that Shell

recognizes as important predictors of an employees learning agilitythe gauge of leadership potential at Shell. These criteriaCapacity,
Achievement, and Relationships (CAR)reflect the desired intellectual, motivational, and
JOURNAL OF ORGANIZATIONAL EXCELLENCE / Summer 2005

Capacity is the ability of an employee to

make critical decisions and produce practical solutions based on a thorough analysis of available information. This includes
being able to focus on the key issues, despite the existence of many complex and
ambiguous factors; seek out relevant information; challenge existing approaches;
create solutions that recognize short-term
needs and long-term implications; and
learn from others.
Achievement is the ability of an employee
to deliver high-quality results as a consequence of setting effective goals; working
in an organized and committed way; and
proactively initiating change and overcoming obstacles. The employee must be

Processes to Assess Leadership Potential

19

Exhibit 2. Relationship between CAR Criteria and the Shell Leadership Framework
LEADERSHIP
FRAMEWORK

CAPACITY

CAR CRITERIA
ACHIEVEMENT

RELATIONSHIPS

Builds shared vision

Maximizes business opportunities
Displays personal effectiveness:
Analyzing & decision making
Managing relationships
Demonstrates professional mastery
Delivers results
Demonstrates courage:
Initiating & managing change
Managing conflict
Champions customer focus
Motivates, coaches and develops
Values differences

able to work effectively in difficult environments, looking for opportunities to expand responsibilities of work and seeking
feedback.
Relationships defines how well an employee works with others. He or she must
communicate clearly and openly, airing
disagreements in a constructive manner
and listening to and consulting with others. The employee must demonstrate the
ability to influence and give constructive
feedback; interact appropriately with people from different cultures; and optimize
performance by clearly communicating
expectations. He or she must also provide
support and motivation, mentor progress,
and recognize good performance.

The foundation for the CAR criteria is the

Shell Leadership Framework, a model of the nine
leadership attributes and behaviors that Shell
seeks in all its leaders. Exhibit 2 shows the linkage between each CAR criterion and the elements
in the Shell Leadership Framework. The CAR
criteria are threaded through all of Shells employee assessment vehicles, from the interviewing process for campus recruits to the assessment

of leadership potential for managers throughout

Shell. Integrating a common set of desired attributes into these vehicles assures an approach
that is consistent not only with the leadership
needs of the business but also across all parts of
the organization and at all stages of an employees
career with Shell.
RECRUITMENT AND SELECTION WITH CAR

With a diverse workforce of approximately 8,500

employees in countries around the globe, Shell
Chemicals believes that successful talent management must be done holistically to assure sustainable change and results. This begins with considering a diverse candidate slate and then
selecting the right people for careers with the company through the college campus recruiting
process. The ideal candidate is expected to have
a well-rounded background with a balanced emphasis on academic and extracurricular learning,
coupled with relevant internship experience. The
CAR criteria then serve as an effective basis for
evaluating the potential of these candidates as future leaders with Shell.
The recruitment process typically consists of
three stages, with more in-depth assessment tools
JOURNAL OF ORGANIZATIONAL EXCELLENCE / Summer 2005

Kim E. Ferrarie

20

reserved for the later stages of the process once a

higher quality applicant pool has been identified:
Stage 1. Screening of the students CV/resume
and application form
Stage 2. A structured interview
Stage 3. A daylong assessment that includes
a variety of exercises and another
structured interview to help assess
the applicants CAR
The Shell recruiters use the CAR criteria in
Exhibit 1 to identify recruits who are likely to be
high performing and to progress well beyond their
level of entry into Shell. The interviews obtain
evidence of these criteria. The candidate is then
rated against a matrix of evidence that defines
each criterion at five different levels of behavior.
Our campus recruits tell us that the CAR
recruiting process has resulted in a more
positive interview experience for them. . .
The interviews at Stages 2 and 3 are conducted
by line leaders trained in the CAR process, and
supported by Human Resources personnel, in
order to create management ownership for new
talent and provide an opportunity for students to
engage with those who have followed career paths
similar to those they may wish to pursue. The first
two phases of questioning in the interviews assess a candidates potential for Achievement and
Relationship Building through such questions as
the following:

Evidence for Achievement:

Please describe the most difficult or
stretching objective/aggressive goal
you have set for yourself. What was
the difficulty? How did you tackle it?
What was the outcome?
Give me an example of when you
failed to meet one of your targets.
What difficulties did you face? What
did you do to try to address these?
What did you learn?
Evidence for Relationships:
Shell contains a diverse mix of talented individuals. Can you please give
JOURNAL OF ORGANIZATIONAL EXCELLENCE / Summer 2005

an example of when you have worked

with people whom you consider to be
different from yourself? What were
the challenges? How did you address
them? What was the outcome?
We often have to persuade people in
business. Can you please give a significant example of when you had to
influence someone in authority or a
group of people to do something? How
did you do it? What was the effect, and
how much was due to your actions?
The third phase of the interview probes for
the third CAR criterion, Capacity. It involves posing an abstract topic to the candidate to examine
his or her critical thinking and analytical skills in
a structured way. The topic is one for which the
candidate has sufficient information to discuss in
generalities but is not likely to have read widely
or thought deeply aboutgenetic engineering,
the environment, the Internet, the use of drugs in
society, prisons, space travel, or education, for example. The interviewer assesses the candidates
discussion of the topic on four levels of abstraction to determine the candidates knowledge of
the topic and his or her ability to place it in a
broader context and describe its relationship with
other systems.
Nolan Wadland, financial analyst for Shell
Chemicals, remembers being asked to define the
word tourism in his initial campus interview and
later, during the daylong Shell Recruitment Day assessment, having to expound upon space travel. It
was a challenging exercise, he recalls. I understood they were trying to look at how I process information, balance whats important and formulate
this into a plan. Talking about your accomplishments and how well you did in school can reveal
your character and ability to set goals and follow
through. But it doesnt show firsthand how you can
work with information, as this exercise did.
Our campus recruits tell us that the CAR recruiting process has resulted in a more positive
interview experience for them, which creates a
more positive impression of Shell and stronger
desire to work for the company. And from the
companys perspective, using the CAR attributes
as a basis for hiring decisions has resulted in a
better quality of new hires.

Processes to Assess Leadership Potential

21

We have also learned a few lessons along the

way about how to make the process even more effective. For example, we found that student recruits were not willing to invest as much time as
our three-stage recruitment process required, especially given the competitive pressures they felt
to secure an offer as quickly as possible and the
shorter recruiting process used by other companies
competing for the same talent pool as Shell. As a
result, Shell is working to streamline the recruitment process, restructure the daylong assessment
to create a better blend of candidate assessment
and learning about Shell, and speed up the hiring
process to produce more rapid decisions.

leadership; the employee then works with his or

her manager on a development plan to cultivate
abilities in those areas required for success at the
next level of leadership. As an assessment of an
employees learning agility, based on CAR criteria, the CEP rating also guides management decisions about who should eventually participate in
Shell executive development programs.

A FOUNDATION FOR DEVELOPMENT: THE

CEP PROCESS

The CEP Process in Action. Employees undergo the CEP assessment every two years to ensure Shell has an up-to-date overall picture of its
talent pipeline. New hires receive a CEP assessment after three years on the job.
The CEP assessment occurs in four stages:

The CAR criteria are also an integral part of the

Current Estimated Potential (CEP) process, mentioned at the beginning of this article, used by
Shell to assess the potential of current employees
for filling senior management positions in the future. The CEP process provides the foundation
for the development of employees with leadership potential so that they gain the right skills
and experiences to take on increasingly responsible roles. The process can also pinpoint recruitment and systemic development needs of the
organizationfor instance, a worldwide shortage of leaders in a particular skill or area of expertise capable of attaining the most senior leadership role in that skill pool.
Within a hierarchy of five job-classification levels ranging from professional to executive management, the CEP rating is the current, realistic estimate of the highest job level an individual might
be expected to reach in Shell if given appropriate development experiences. The assessment is done by
a panel of managers and supervisors who have been
trained in the process and, more importantly, have
firsthand knowledge of the employee. This broadens the assessment lens for the employee and eliminates the subjectivity of a one-on-one assessment.
As a current estimate of an employees potential, the CEP process focuses on current behaviors
and performance as evidence of potential and does
not represent an assumption about an individuals
innate ability. Done periodically, it allows the employee to gauge where he or she is at each stage of

The assessment is done by a panel of

managers and supervisors who have been
trained in the process and, more importantly,
have firsthand knowledge of the employee.

Stage 1. A list of individuals to be assessed is

prepared, and a panel of supervisors
and managers familiar with their work
is organized. Prior to the panel meeting, panel members are asked to assess each individual against each of
the three CAR criteria and to develop
an initial CEP rating of potential.
Stage 2. The panel meets to rank the individuals according to their potential within
the five job-classification levels of the
organization (professional through executive management). An employees
initial rating might be adjusted at this
point to better reflect his or her potential relative to that of peers.
Stage 3. The leadership team of the relevant
business or function reviews and approves the final ratings.
Stage 4. Each employees line manager shares
the final CEP rating with him or her.
In this discussionthe most important part of the CEP processthe employee receives constructive feedback
about the CAR criteria in which the
evidence shows the individual to be
particularly strong or weak. It is here
that the manager can have the most
JOURNAL OF ORGANIZATIONAL EXCELLENCE / Summer 2005

Kim E. Ferrarie

22

meaningful impact by helping the employee understand specific strengths

and development needs, and by suggesting ways in which the employee
can develop the leadership skills necessary to enhance his or her potential
with the company. The employee and
manager devise a formal development
plan each year as part of the performance review cycle, with the employees CEP as one element of data
factored into the development plan.
In the CEP process, people with recent personal direct knowledge of the individuals current
performance examine that performance for evidence of Capacity, Achievement, and Relationship
Buildingthe CAR criteriawhich then determines the employees rating of potential for future
leadership positions. This is distinct and separate
from performance appraisal, a retrospective
process in which current performance is evaluated
relative to the expectations of the current job.
An individuals CEP rating is not necessarily
expected to remain constant throughout his or her
career; CEP ratings can move up or down in future
assessments based on evidence of potential at that
time. An individuals mobility (willingness to relocate) is not taken into account when developing
his or her CEP rating. However, lack of mobility
might inhibit an employees ability to achieve his
or her CEP level; for example, no roles at that level
might be open in the local organization, and/or
lack of overseas experience might make it more
difficult to compete for certain senior roles.
The CEP process is not intended to guarantee
or limit individual career advancement or success
in Shell, nor should it unduly influence promotion,
selection, or performance reward decisions. The
CEP process is clearly communicated and carefully and sensitively managed so that all employeesespecially those in the early stages of their careersfully understand its intentions and that the
process remains aligned with Shells business and
organizational needs.

The Benefits of the CEP Process. By enabling

Shell to better understand the shape of its talent
pool, the CEP process has had several benefits for
the organization and its employees. The company
has been better able to identify and groom people
with leadership potential to assure a future pool of
qualified talent for senior roles. Businesses and
functions within Shell are better able to assess the
status of their current talent pool and undertake
targeted developmental and/or recruiting initiatives accordingly.
Through the CEP process, supervisors and
employees are having more meaningful discussions about career planning and development. Employees have a better understanding of how they
are currently perceived in terms of future progression in the organization and thus how closely
their career aspirations align with the companys
needs/expectations. It has also become possible
to target more appropriate developmental opportunities for employees that reflect the actual needs
of the employee and the company.
A GLOBAL LANGUAGE AND WORLDWIDE
OPPORTUNITIES

Shell Chemical LP is part of Royal Dutch/Shell

Group of Companies, a global family of energy
and petrochemical companies with more than
119,000 employees in 145 countries. The Leadership Framework, CAR criteria, and the CEP process
are used throughout Royal Dutch/Shell, providing
us with a common measurement of the corporations talent pool and a truly global language to discuss our talent needs across organizations. Because
the model and assessment tools do not change from
business to business, we have greater opportunity
to leverage our human resources and broaden the
bank of interunit developmental and advancement
opportunities for employees.
This creates a strong competitive advantage
for us in the talent market. Employees who want
to grow and develop and who have the capacity to
lead have access to a world of opportunities to advance and to achieve their highest potential.

NOTE
1. Shell Chemicals refers to the companies of the Royal Dutch/Shell Group that are engaged in the chemicals business. Each of the companies that make up the
Royal Dutch/Shell Group of companies is an independent entity and has its own separate identity.

JOURNAL OF ORGANIZATIONAL EXCELLENCE / Summer 2005