Woodside’s incredible shrinking executive team: How did it happen?

Peter Coleman hasn’t been the Woodside Petroleum (ASX: WPL) chief for long, but he’s bought tumultuous times for the gas giant’s executive ranks.

Coleman was a surprise appointment last year, but a well-credentialed one. A 27-year veteran of ExxonMobil, he was seen as a ‘good fit’ for the company. Nonetheless, it’s clear that the executive team at Woodside has not been as welcoming.

Since Coleman took over last May, five of his original nine-member executive team have resigned.

The first to walk out the door was Kevin Gallagher, the executive vice-president of the North West Shelf division. He left in June, one month after Coleman came on board. Shortly afterwards Jeff Soine, executive vice-president oil and gas, tended his resignation. He was reportedly a contender for Coleman’s job. Eve Howell, executive vice-president health, safety and security, was next. She left her role in December.

And today, Phil Meier (senior vice-president, projects) and Lucio Della Martina (executive vice-president, Australian business) are also on the way out, according to a report in The Australian. Della Martina was another leadership contender, while Meier was responsible for all of Woodside’s key projects, including the troubled Pluto LNG project, where delays have led to cost blow-outs.

Coleman’s experience highlights a common problem for chief executives who are bought into the company for the top job: what to do with all the people loyal to your predecessor. Often, they were contenders for your job, and may chose not stick around after they have been overlooked. And if they do, it can be a tense situation.

Dr Hilary Armstrong, the director of education at the Institute of Executive Coaching, says it takes two to make a relationship.

“The person who’s looked over for the job also has to be willing and want to work with the new person,” she says.

“Where it’s worked successfully is where the [rivalry has] been named, and there’s openness between the two people, and a willingness to work together.”

Armstrong says the key thing incoming CEOs need to do to mitigate any bad feelings against them is to come in curious and eager to learn about the organisation.

“The most successful ones come in with a mindset as an inquirer or researcher, rather than a mindset of putting their stamp on the organisation immediately,” she says.

“For me, that means sitting back for two to three months as they gather knowledge.

“The trouble with many CEOs is they come in and think they’re going to toss out everything that came before them, to do something new in their image.”

Armstrong thinks this is a big problem, but one successful CEOs know how to avoid. “Even if an incoming chief is an expert in the industry, every organisation is different,” she says.

It’s not just the industrial processes new leaders of companies need to become familiar with, Armstrong adds. It’s as much about the politics of it all, and the dynamics and relationships that govern an organisation. And hanging back for a time can help leaders make informed decisions when something needs to change.

“If there’s any issues going on, I would make sure I understand them from multiple perspectives,” she says. “I would be asking people what they think, and when I did use my authority, I would make sure I was doing it on an informed basis.

“You might have to make large changes, but they should be made on good information and while balancing relationships with people.”

Ultimately, Armstrong says, new executives should come with respect. “If you don’t have that attitude, you really lose a lot of talented people and a lot of organisational knowledge.”