The Economist October 30th 2021 Business 79search firm, identifies “strategic diver
gence” among oil majors into three camps
in response to the carbon challenge. The
unrepentant, like America’s ExxonMobil
and Chevron, have stuck with legacy oil
and gas businesses. The supergreen, like
Eni and bp, have dramatically shifted their
portfolio mix towards lowcarbon energy.
The problem, argues Christyan Malek of
JPMorgan, a bank, lies with those in the
third camp like Shell, which have tried to
do both. “Investors’ apparent lack of con
viction in the hybrid model has forced a re
think,” he says in explaining why a chal
lenge like Third Point’s was inevitable. On
his analysis, Shell’s massive business in
natural gas is undervalued because it is
tarred with the same dirty brush as its oil
division, and should be spun out. “Shell’s
‘breakupability’ is quite high once you
consider renewables plus gas”, he insists.
So will Shell really be split up? It is un
likely. Mr Loeb’s investment may seem big
until you consider Shell’s valuation of
roughly $190bn, making it a mere 0.4%
stake. Ben van Beurden, Shell’s boss, is
wellestablished, at the peak of his power
and backed by a board whose chairman,Andrew Mackenzie, fiercely battled a simi
lar activist challenge when he ran bhp, an
Australian mining firm. However attrac
tive a split might be in theory, Mr Malek
reckons there is not enough financial pres
sure to force a break up.
Even so, Shell’s boss would be wise to
heed some of Mr Loeb’s unsolicited advice.
Short of dismantling his empire, he could
give his renewables and gas divisions far
more autonomy and capital, for example.
If he chooses instead to stick with thecur
rent hybrid muddle, he may find thatit sat
isfies neither the greens nor the greedy.nO
ne of thealltimegreat corporate
emails was sent several years ago, by
a manager at Shell to pep up a team of oil
engineers on a project in the far east of
Russia. "Personally, I, like most others,
love winning," he raved. "I despise cow
ards and play to win all of the time."
The language was bizarre in other
ways, too. "When everyone of you were
kids, I am sure that you all admired the
champion marble player" struck a chord
with precisely no one in 2007. The
anachronism was because the writer
borrowed liberally from a stirring speech
by General George Patton to American
troops in 1944. Patton's "all real Amer
icans love the sting and clash of battle"
became "all real engineers love the sting
and clash of challenge." And so on.
Copying from the army is seldom so
cackhanded, but the idea that managers
have lessons to learn from uniformed
types persists. A cottage industry rests on
the conceit that soldiers have insights
into leadership that can be of use in the
boardroom. Two new books based on the
premise have come out this month—
"Risk: A User's Guide" cowritten by
Stanley McChrystal, a retired fourstar
general in the usArmy, and "The Habit of
Excellence" by LieutenantColonel Lang
ley Sharp, a British officer.
General McChrystal's book is a pot
pourri of anecdotes and case studies on
how to manage risk. The general's idea of
creating "fusion cells" to bring together a
network of intelligence teams in the fight
against alQaeda has spread to other
areas: the state of Missouri did some
thing similar to connect different agen
cies to combat covid19.
LieutenantColonel Sharp has written
the more distinctive book, a detailed
account of how the British army goes
about developing its leaders. Much of thethinking will be surprisingly familiar to
managers. The army's concept of "mission
command", in which the overall intent of a
mission is set at the centre and the deci
sionmaking that brings it to fruition is
delegated to people on the ground, is akin
to the ethos of agile software develop
ment. "Serve to Lead", the motto of the
army's academy at Sandhurst, came de
cades before the nowmodish manage
ment theory of "servantleadership".
Yet these echoes are only that. The
differences between leading in the armed
forces and leading a business come
through more strongly from both books
than the similarities. Most obviously, the
use of lethal force tends not to be a big
feature of corporate life. The stakes are
much lower, and the calculus of risk is
therefore just different.
Leaders in the armed forces can draw
on deeper motivations among soldiers
than bosses can with their employees.
History offers a shared narrative to those
in service. Patriotism provides a ready
made sense of purpose. And nationality
operates like a permanent noncompeteclause: soldiers do not change their
allegiances to countries in the same way
that workers can switch companies.
"England expects that every man will do
his duty," was the message that Admiral
Nelson sent his sailors before the battle
of Trafalgar in 1805. Swap in the name of
your employer and see how it sounds.
The contrasts do not end there. Lead
ers in the armed forces play a much more
familial role than the average boss. They
will have been in the forces themselves
for years. The people below them are
often very young. Many live and work in
close proximity.
The armed forces also emphasise
intensive training in preparation for
moments of extreme stress, when there
is no time for senior figures to be con
sulted. When pivotal decisions need to
be made at companies, the bigwigs
schedule a meeting weeks in advance.
The closest analogues of army leadership
lie in elite sports rather than in firms.
It is interesting for civilians to read
about army life, but largely because it is
so alien. It may make sense to hire veter
ans, but as part of the mix rather than as
a template. A research paper from 2014
found that bosses who had been in the
armed forces were more conservative
than those who had not donned uniform.
They invested less; they were less likely
to commit fraud; and their firms per
formed better in times of crisis.
Patton's speech in 1944 ended by
imagining what his soldiers would say to
their grandchildren after the war was
long over: "Son, your Granddaddy rode
with the Great Third Army and a Sonof
aGoddamnedBitch named Georgie
Patton!” The Shell executive's missive
finished thus: "Details of the team are
summarised in the enclosed email." War
and work are not the same.The limits to the lessons of army leadershipBartlebyInto battle they don’t go