Building next gen leaders: A case study on Pertamina’s leadership development program
The EFMD Excellence in Practice (EiP) Awards recognize outstanding and impactful client-supplier partnerships in the domains of Leadership, Professional, Talent and Organizational Development. The EFMD Gold Award for Talent Development was awarded in 2020 to Pertamina and a team of partners, recognizing its outstanding leadership project, Catalyser. Catalyser is Southeast Asia’s biggest leadership acceleration program. The award marks the first time an Indonesian company has won a world-class competitive award for talent development.
Catalyser is the product of Pertamina’s collaboration with 4 external partners: INSEAD (Learning Partner), Deloitte (Learning Partner), Tjitra Associates (Senior Advisor) and Bob Aubrey & Associates (Senior Advisor).
Here is a glance at what makes Catalyser an innovative way of leadership development:
The need for an innovative leadership accelerator
Pertamina is one of Indonesia’s leading State-owned Enterprises with more than 31,000 employees. It provides 80% of the country’s fuel, manages 16% of the nation’s total assets and contributes the largest dividend of all State-owned Enterprises to the national budget.
By 2023, nearly all of Pertamina’s senior leadership level of management will have retired (retirement age is 56 for Indonesian SOEs). At the same time, the talent pipeline has a significant maturity gap since the company had frozen hiring for ten years, with the consequence that promotable managers have ten to fifteen years less experience than their predecessors.
The challenge for Pertamina was to ramp up the preparedness of nearly five hundred managers to fill senior leadership positions by 2023.
Catalyzing talent development: Pertamina’s Catalyser program
The purpose of the Catalyser program is to accelerate the development of 480 middle managers to fill 290 vacant Vice-President and Senior Vice-President positions within the next 5 years – in other words, to achieve in 2 years what would normally take 10 years. However, the leadership acceleration challenge also is an opportunity: Catalyser will develop an entirely new generation of leaders with the strategic capabilities and mindset needed to meet Pertamina’s future challenges.
The Catalyser initiative was designed with 8 components:
- Co-create and deliver a massive acceleration program for 480 participants to fill positions within 5 years.
- Support candidates to define individual career paths according to their aspirations and potential.
- Accelerate capability and readiness for the promotion of young and less experienced candidates.
- Change the mindset of leadership to match the strategic goals of the company.
- Expose future leaders to other developing countries to see how they are managing their energy challenges.
- Increase organizational mobility by providing opportunities to work across Pertamina’s businesses and Directorates.
- Increase Pertamina’s capability to grow through acquisitions, by integrating acquired leadership talent.
- Build a measurement system with a new set of leadership indicators for leadership with a rigorous validation process for candidates.
Co-creating an innovative leadership program
Pertamina decided to co-create its framework with the input of internal senior management and 2 external senior advisors Bob Aubrey and Hora Tjitra. Catalyser could not work without the commitment of internal senior management as mentors. More than 100 senior managers were committed to the role of mentors for individual participants as well as for action learning projects.
The learning and exposure component of Catalyser is organized as 4 career streams: 2 are led by INSEAD and 2 by Deloitte. INSEAD and Deloitte created unique high-impact learning experiences that addressed not only capabilities, but also mindset change and readiness to lead.
Measuring the impact of leadership development
In terms of numbers, the impact on Pertamina’s talent development has been massive.
Indonesia is a young and growing country poised to play a positive role in the world economy. “At Pertamina, we offered a chance to hundreds of managers in the company to rise quickly into senior leadership positions. This is a unique opportunity that few companies can offer. We built our own learning and development strategy and used our own set of measurements. We didn’t just train and promote people; we helped them define their career path, their aspirations and their learning needs. We gave them all international exposure. We believe this enhances their contribution to the company and to Indonesia.” – Koeshartanto, Human Capital Director, Pertamina
The key impacts were measured across the following four areas:
- National impact:
While the direct impact of a leadership program on a nation is impossible to measure, indicators from government ministries and the Board of Commissioners do show a shift in their perception of Pertamina. Concern over Pertamina’s “leadership crisis” has shifted to expressions of confidence in Pertamina’s upcoming generation of leaders. The Indonesian government publicly expressed confidence in the capability and readiness of Pertamina’s next generation of leaders. The government has further enhanced Pertamina’s role in leading the national transition into new and renewable energy sources.
Strategic & Organizational impact
Capability impact
Strategic capability was defined with senior management and mapped into 16 capabilities. Using a scale of 5 levels from potential leader to world-class leader, the goal was to move capability from levels 1 and 2 (potential and developing leadership) to levels 3 and 4 (capable and ready leadership). Acceleration of capability for individual participants was assessed in the 3 validation phases.
The chart below shows capability acceleration measured as the delta between the candidate self-assessment in Validation 1 at the beginning of the Catalyser program (blue line) and the self-assessment of progress after the first year validated by interview with an assessment panel in Validation 2 (red line).
The biggest acceleration of capabilities were made in these areas:
- Strategic thinker
- Innovator/ entrepreneur
- Global networker
- Digital society and market
- Technology integration
Personal impact
The impact of Catalyser on the participants themselves is shown at 2 levels:
- Self-directedness: Identification of personal aspirations that becomes a validated career strategy
- Mindset change: assumptions and attitudes about leadership in a world-class energy company
Using the Personal Enterprise Plan as the main tool for self-directed career development, the impact showed that 81% of candidates achieved high quality in their self-directed career plans. This impact was measured individually in the validation interviews where participants demonstrated openness and flexibility in self-directed careers using Plans A and B.
In a nutshell, Catalyser generated career options that participants did not have in their careers at Pertamina earlier. These options were then tested in the Mobility Opportunities (MO) for year 2 of Catalyser.
“Pertamina is honored to be the first Indonesian company awarded the EiP Gold Award for Talent Development. We took the initiative to create a new leadership development model and we hope this will motivate more Indonesian companies to innovate and create world- class solutions to our human development needs,” shares Nicke Widyawati, President Director & CEO of PT Pertamina.
Conclusion:
The changing world of work and business has forced businesses to shed the traditional ways of leadership and demand leaders to lead enterprises where they can respond to persistent challenges like volatility, uncertainty, and ambiguity.
Pertamina's leadership program was designed with the same thought process where the younger workforce can fill into the roles of leadership who can respond to newer set of challenges and the results are for everyone to see!