Leadership philosophy

The first quarter of the 21st century saw major changes in the Company’s external and internal environment. According to experts, the dominant trends are economic and technological change, increased digitalization, and changes in the workforce structure. The internal environment is also evolving: generations of employees are changing, new skills and aptitudes are needed, and younger workers are putting forward new ideas and inventions. To ensure that the Company adapts as much as possible to the new reality, we are making improvements to our corporate culture (values and conduct), as well as to the system of relations in place between employer and employees.

The President of PJSC LUKOIL, Vagit Alekperov, has decided to begin implementing leadership and engagement tools to facilitate a reliable and sustainable future for LUKOIL. Forward-looking changes are designed to ensure that the Company maintains its leading position in the industry.

This will require changes in the system used to make decisions, people management, training, motivation, and overall performance and efficiency assessments. The new approach places a greater emphasis on the individual as the key driver behind achievement of the Company’s strategic goals. Goal management, effective and inspiring interaction between managers and employees, constant feedback, and a modern system of productivity and performance management facilitate high motivation and the attainment of personal and team results. All these factors determine the main changes being made to the management approach.

The first step has been to elaborate the corporate principles and approaches for working with project personnel in the Exploration and Production business segment. This group of employees ensures that effective solutions are found to engineering and technical problems, while achieving operational and investment efficiency when implementing major and high-priority projects, both in Russia and abroad. Thanks to the project teams, the risk of making poorly grounded decisions is lowered, and Company’s and global experience and best practices are taken into account.

The main achievement in 2019 was to establish and improve the regulatory framework for working with project personnel. A unified approach to creating project teams was established, a new planning system was developed, and a set of competencies and a system of employee development, assessment, and remuneration (incentives) were elaborated. Training programs were developed for employees in the project personnel talent pool. Our corporate knowledge system provides for accumulation of project experience and maintains a database of the lessons learned from implemented projects.

A new approach to the operation of the management succession system is also being elaborated. It is planned that career development opportunities will be provided to each employee and that the positive dynamics of an employee’s digital productivity and performance rating will serve as one of the main factors in career development.

A new corporate portal is being created, based on social networking principles. The portal provides a single information space for employees and simplifies and speeds up communication and cooperation between project teams and expert and interdisciplinary groups. A transition to convenient services will reduce the cost of routine operations and enable employees to tailor their digital workplace to individual needs.

The system of managing employee productivity and performance based on the new principles of modern leadership philosophy is reflected in our single corporate portal, as well as analytics on key business performance indicators for each LUKOIL Group entity. Through integration, we facilitate personnel management and development based on data collected for all types of work performed by employees in a single information space. This in turn will make it possible to more effectively develop each employee and boost the efficiency of assessing their contribution to the achievement of strategic goals.