Pemex: Identifying and Developing Next-Generation Talent and Leadership

Abstract

Talent & Technology For Petroleos Mexicanos (Pemex), future growth lies in deep waters. Tapping Mexico’s potentially vast offshore oil reserves is the greatest business challenge currently facing the company, which is responsible for the strategic direction of the Mexican petroleum industry. The Pemex Exploration and Production (PEP) subsidiary is in charge of the exploration and exploitation of petroleum and natural-gas reserves. To address the twin challenges of identifying and developing the next generation of leadership, and assigning its most talented people to the most strategic projects involving offshore reserves, PEP undertook a massive initiative aimed at building and implementing sophisticated talent-management processes and information systems. This program has been built around an in-depth competency model that enables PEP to design and deliver several forms of education and development in a highly targeted way. It also allows the company to implement multiyear career and succession models for strategic roles deemed critical to business continuity and expansion. Before 2006, executives were picking successors without the support of hard data. Today, PEP is working with every executive position to have at least three named successors with career and learning plans that address gaps in competencies. Talent management and employee-development activities are automated by a robust enterprise-class information system with sophisticated reporting that supports talent-management decision making. In just two years, PEP institutionalized succession-planning practices that directly address the company’s most critical business challenges. Identifying and Developing Key Talent The shortage of talent is one of the top business issues facing the entire oil and gas industry. With its growing commitment to deepwater exploration and production, PEP needed to identify those with specific technical skills or the aptitude to learn new skills, and assign the company’s most talented people to develop these strategic fields. At the same time, the company continues to face a growing shortage of leaders as a result of an aging workforce. PEP estimates that 20% of its high-ranking officials would be eligible for retirement in the next three years and around 32% in the next six years. The company wanted to identify a talent pool from which it could pick high-potential candidates to fill leadership roles in the future. These candidates must possess not only key personality attributes and abilities, but also the potential to grow and learn new skills. PEP is a large organization, with approximately 45,500 workers spread out all over the country, some in very remote locations—which makes it challenging to effectively reach all employees, and identify capabilities and potential. People practices and management philosophies at PEP, combined with a powerful rank-and-file union with strict shop rules, also made it difficult to gauge, track, and sustain employee progress.