press release

Chevron Press Release - Improving Employee Commitment Is Key To Improving Companies' Competitiveness

SAN FRANCISCO, Sept. 15. 1994 -- As U.S. companies work to outperform foreign competitors, Ken Derr, chairman and CEO of Chevron Corporation believes "the challenge is to renew and improve employee commitment ... to help employees succeed in a changed -- and changing -- business environment."

In a keynote address before more than 2,000 attendees at the 16th annual National Black MBA Association National Conference and Exposition here, Derr made Chevron a case study for the conference theme: "The Dynamics of Leadership: Moving Principles to Action."

Over the past decade, U.S. companies, including Chevron, have undergone philosophical and structural changes, decentralizing and flattening their organizations, shedding assets that didn't add value and operations that no longer fit with strategic plans. In spite of dramatic benefits to the business, "the immediate byproduct of organizational change is stress and impaired performance," said Derr. "Employees who are fearful and uncertain about their future tend to lie low. They don't take risks. They don't expend much creative energy. All of which is bad for business, and bad for people."

Derr explained the process at Chevron that resulted in reducing the size of the work force by more than 8,000 people. "The reductions themselves were, unfortunately, unavoidable. When a company is making sweeping, systemic changes in order to become more competitive -- in order to survive -- you must scrutinize every resource, every business process," he said.

However, "dealing with the 43,000 employees we retained is now our top priority," he said, explaining that "building a committed team" of employees has become one of the company's formal strategies.

Derr said employee commitment at Chevron is a sense that employees and the company are moving in the same direction. "Our goal is that each employee can understand how his or her individual objectives fit into the strategies of the business unit and the corporation."

He said "Chevron's people will become a committed team when we trust, respect and support each other and value our differences." Without such an atmosphere, "teamwork is an empty word and commitment is impossible."

"Does it guarantee lifetime job security? No, I'm afraid not," Derr said. However, it means that "jobs in the future will be more challenging and fulfilling than in the past. More employees will be decision makers, not paper processors."

Improving employee commitment will generate other important results beyond greater job satisfaction, Derr predicted, and not just at Chevron. "It's a major change and a major challenge for corporate America .... Future business success will only come to those companies which have developed a committed work force."

Updated: September 1994