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.” (...)
Soon after Rex Tillerson became CEO of Exxon in 2006, he decided to build an office complex in Texas to match its newfound status as the biggest company in the US. Tillerson and his executives would remain in Exxon’s “God Pod,” a nickname for the headquarters in suburban Dallas. But about four hours away, the new Houston campus would become the company’s largest hub, accommodating more than 10,000 people.
Tillerson spared no expense, and little did he need to. As the world melted down from the financial crisis, Exxon made $45 billion in a single year, then the biggest profit of any company in US history. The campus would have two lakes; its low-rise, glass-walled buildings would house a food court and child-care facilities. The piece de resistance was a 10,000-ton cube that appears to hover over a plaza below, built to show off Exxon’s engineering prowess. (...)
Exxon’s modern culture began with Lee Raymond, a chemical engineer who became CEO in the early 1990s. He earned the nickname “Iron Ass” for his acerbic tongue, uncompromising demands, and public reprimands of senior managers, according to Private Empire: ExxonMobil and American Power by Steve Coll. The typical Exxon man—and Exxon’s workforce is two-thirds male—“is not an eccentric, a maverick, or an entrepreneurial type,” read a Texas Monthly article from 1978. “He’s not a flashy or sloppy dresser. He’s bright, aggressive, good with numbers, less good with people.” The same is still largely true today among Exxon’s higher ranks. An average career length is about three decades, and no outsider had been hired into the modern Exxon’s inner sanctum of top executives until last year.
Engineering is Exxon’s lifeblood. Its top recruiting grounds are mainly state schools with prestigious engineering programs—Texas A&M, Georgia Tech—rather than the Ivy League. Salaries could start at $100,000, and benefits include a traditional pension, a relic in corporate America. A graduate joining Exxon could easily travel and relocate almost anywhere in the world. Engineers in their 20s could find themselves working on refinery upgrades along the Gulf Coast or deep-water drilling in Brazil or liquefied natural gas in Qatar. By their mid-30s they could be involved in developing major projects, and by their 40s they could be earmarked as a future executive, formally assisting a vice president in the God Pod. By age 55, even if they’d risen only to middle management, that pension would kick in, enabling a comfortable early retirement. (...)
But ascending through Exxon with technical acumen and smarts has never been enough. Successful recruits must follow rules and work within a hierarchy. Acronyms guide much of daily life. The OIMS, or Operations Integrity Management System, governs existing operations including production sites and refineries; new projects are developed through EMCAPS, or ExxonMobil Capital Projects Management System. Safety procedures are sacrosanct. A rule requiring employees to hold the handrail while walking on stairs, primarily to avoid falls at dangerous sites such as offshore platforms or chemical plants, is rigorously enforced even in offices. License-plate-reading traffic cameras on Houston office grounds can enforce a strict 25-mph speed limit. Employees are prohibited from talking on the phone while driving, even if doing so legally, hands-free. (...)
The company’s long-standing performance review process was a remnant of the “rank and yank” system, a blunt management tool originated by General Electric Co. CEO Jack Welch in the 1980s. Over the past decade companies including Microsoft, Goldman Sachs Group, and even GE have abandoned it because, even for their cutthroat cultures, the system became too severe.
by Kevin Crowley, Bloomberg Businessweek | Read more:
Images: Saratta Chuengsatiansup for Bloomberg Businessweek; Ernest Scheyder/Reuters[ed. I got to experience Exxon's management style up close for a number of years and wouldn't be surprised if there's an extensive file somewhere in the organization. Rigid, efficient, authoritarian, disciplined, aggressive, prideful... pick your adjective, Exxon is all of those (and more, which this article does a good job of explaining).]
