For California, By Californians

For California Resources Corporation, California and its residents come first.

The independent oil and natural gas company, also known as CRC, spun off from Occidental Petroleum Corporation and became a California pure-play with all of its operations in the state. CRC benefits from its heritage in the established corporate world, but executives knew they needed to differentiate CRC as a company keenly attuned to the state’s energy and sustainability needs.

The company is making a conscious effort to prioritize issues that improve Californians’ quality of life—not only for the sake of the company but also to help advance the well-being of the state’s communities. One of the best ways to best align those goals is by hiring 100 percent of its workforce from California and making sure the workforce represents California’s population. Industry employees in the state are 27 percent Latino, 13 percent Asian, and 6 percent African American, and CRC has plans to expand on those percentages.

Four CRC employees playing a large part in bringing this new corporate direction to life are Margita Thompson, vice president of communications; Carlos Contreras, commercial vice president; Francisco Leon, vice president of portfolio management; and Alana Sotiri, vice president of human resources. Hispanic Executive recently met with the four CRC leaders to discuss how they integrate their roles for success and work in the best interest of all Californians.

A Shift in Perspective

Margita Thompson has developed a specialty of driving unexpected change as she has jumped between the public and private sectors. She’s been in the hot seat herself, having served as press secretary for California Governor Arnold Schwarzenegger, the California Bush campaign in 1999 and 2000, and Lynne Cheney in the White House. She’s also been an executive with Disney Consumer Products, Health Net, and served as political producer for CNN’s Larry King Live. These experiences have provided her with a sound knowledge of public policy and its effect on the private sector and consumers.

“My passion point is driving connectivity between diverse stakeholders and company operations in regulated industries. I’m happiest at that intersection between public policy and the private sector,” the VP of communications says.

One of the first things Thompson did on the job was discuss with CEO Todd Stevens how best to position an upstream oil and gas company in the public eye.

“As a B2B [business-to-business] commodity, upstream oil and natural gas companies haven’t traditionally thought of themselves as consumer facing,” Thompson says. “So I’m working internally with our leadership team to shift the culture to be one where employees and leaders know how to best connect our value to Californians.”

To build that bridge, Thompson has developed an employee communication program to help people understand the value of the domestic oil and natural gas CRC produces for Californians, and the benefit of affordable and reliable energy.

“California is an energy island. We import 64 percent of our oil, 90 percent of our natural gas, and 34 percent of our electricity—increasingly from foreign countries that don’t share our state’s environmental protections,” Thomson says. “The solutions lie in having those conversations, not just for the business but also with your friends and family. Because energy issues are complex, we’re developing a way to show people how to navigate a conversation.”

Through it all, Thompson credits her biculturalism for her ability to communicate with almost anyone.

“I think being bicultural makes it very natural to live in the nuance,” Thompson says. “This is a world where people are trying to give stark choices, but as Latinos, we understand how to navigate through challenges and that there are benefits and costs to any option.”

Thompson uses her ability to look at issues from multiple points of view to find common ground. That, in turn, allows her to do what she calls “speaking into people’s listening,” which is about getting people to actively listen, engage, and realize the ramifications of the decisions they make. This allows her to deliver on what motivates her: sparking unexpected positive change.

“That’s why I really like working in this regulated environment,” Thompson says. “I’m able to get to the core, identify what motivates people, and really achieve breakthroughs on issues that impact people’s quality of life, economic mobility, and educational attainment.”

Commercial Shake-up

One of the benefits of helping lead a new company is you get to write the definition of your role. CRC decided its commercial vice president would be “ringing the register on the way in and on the way out.” That means that marketing and trading, commercial analysis, and supply chain groups all report to Carlos Contreras.

“As a new company, CRC was able to take a fresh look at how many resources were dedicated to California operations. We are doing more with less,” Contreras says. Even as a smaller group, his team’s scope has expanded to where they’re managing multiple categories. It’s a process by which they meet with the proponents on the operations side and then with our customers or vendors to negotiate the best possible price for CRC.

As the largest independent producer of oil and natural gas in California, CRC has significant leverage to negotiate the best deals with their vendors, but they also changed the way they use that leverage.

Previously, everything was compartmentalized so that the different operations were all competing for capital and signing their own contracts. By contrast, Contreras decided to maintain a single contract with each vendor across CRC’s statewide operations, which has given CRC the opportunity to negotiate lower prices and improve the bottom line.

“By streamlining our practices, we’ve been able to negotiate significant cost savings with our vendors, even compared to the previous downturn in oil prices in 2009,” Contreras says. “That’s been very important for us and is working out to be a win/win for both parties, not just for today but going into the future.”

In addition to the way they negotiate contracts, Contreras also pointed out that the culture and feel of working at CRC could not be more refreshing.

“Everybody has a sense of ownership in the company,” Contreras says. “They will think of a way of lowering costs. They will think of a ways of improving processes and that percolates throughout CRC.”

Value Comes First

Deciding where the company should focus its resources to maximize its return on investment falls on the plate of Francisco Leon, VP of portfolio management and strategic planning.

“The oil and gas industry today is focused on production growth,” Leon says. “Most upstream companies set aggressive growth targets, and the operating teams are asked to work toward getting that production no matter what the cost.”

By contrast, Leon says, CRC’s strategy is to place value at the forefront of decisions, rather than chasing production growth for its own sake.

Leon says that CRC’s unique value proposition is threefold: providing clean and affordable energy for the state of California, generating strong returns for shareholders, and contributing to the success and prosperity of the communities where employees live and work.

He notes that CRC’s employees are very proud to work for an oil and natural gas company because the company puts time and effort into getting involved and helping people throughout California. This a clear result of having changed the strategy—previously they were less engaged with the public.

“We understand California and the importance the energy we provide has for our shared future. We’re also collectively committed to sustainability and feel proud when our operations are recognized for conservation efforts,” Leon says. “You can see us working with many charities throughout the state and donating time and money to help our local communities. It’s about producing energy for California, by Californians.”

Culture Challenge

Alana Sotiri started working for Occidental Petroleum right out of college, so she has an extensive background in the industry. As the new vice president of human resources, she understands the culture CRC was leaving and the opportunity to develop the entrepreneurial culture CRC needs.

“I was very fortunate to have great mentors throughout my career that really developed my appreciation for strong networks and relationships. I am still relying on this foundation at CRC today,” Sotiri says.

CEO Todd Stevens saw Sotiri’s natural diplomatic skills and ability to cultivate relationships with people at different levels in the company as a strategic asset. The faith Stevens has in Sotiri is critical to making a successful cultural transition across the entire company. Thanks to Sotiri’s long history in working with Stevens, she has been able to introduce new programs and foster cultural innovation while strengthening her relationships with her coworkers and building trust among both the leadership and the employee base.

“In order to make sure we are going in the right direction, I really believe feedback is crucial,” Sotiri says. “So I constantly seek feedback from my team members, my peers and different people in the company at all levels.”

Another aspect of her focus on feedback is a culture of collaboration. Not only does this increase the good ideas she gets, but it also helps foster a sense of ownership among all the employees.

“When you reach out to others in your organization and solicit ideas, they’re happy to give them to you,” Sotiri says. “They’re also going to help make sure these things happen because they believe in them; there’s buy-in.”

Most of all, Sotiri appreciates that her unique position has given her a chance to be innovative.

“I’m energized by the fact that I have the freedom to implement real change, to look at creative ways to solve problems, and to create opportunity for employee and company growth,” she says. “Our employees, my peers, and my team have been incredibly engaged, and are an amazing resource.”

To help foster even better ideas, Sotiri has been working to make sure CRC’s employees reflect California’s diversity. By hiring more women and people of varying races and ethnicities, Sotiri is able to access an even wider pool of experiences and perspectives to help create more opportunities for CRC and to better address the challenges faced by California.

“CRC is ‘all in’ in California, so I actively monitor the state’s population demographics,” Sotiri says. “When hiring, I want to make sure our workforce reflects the strength of California’s unique diversity. It is important to us that our employees represent the communities where we live and operate. In fact, research shows that diversity of thought leads to better decisions and better bottom-line results.”

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Call to Action with Maribel Hines

Build a shared sense of purpose. A shared sense of purpose among team members and leadership breeds a laser focus on what matters most. Purpose fuels energy and drive, and draws people into a collective vision. CRC has a crystal clear desire to prioritize issues that improve Californians’ quality of life, and this laser focus helps their management team to advance the well-being of California’s diverse communities.

Create alignment around that shared purpose. Creating alignment is one of the most important roles of leadership. Whether it is starting at the management level or singularly focused on department or team alignment, it often falls to the leader to ensure the purpose is defined, clear, and communicated.

Ask Yourself: Does everyone understand your purpose?

Are the benefits as clear to others as they are to you?

Is it relevant enough for everyone in the team to want to be a part of it? (If no or not sure, reevaluate who is on your team and how their contributions can best be served.)

Is the purpose of enough significance to make it worth the effort?

Is it an aspirational, yet achievable goal that makes the time, energy, and resource investment worthwhile to the bigger picture vision of the organization?

Alignment is achieved one person at a time and through deliberate conversations, not mandates or pleas. A good leader ensures that the benefits are not only clear, but also positioned in a manner that is most relevant and meaningful to each team member.

Encourage perspective-taking. The CRC management team makes it a point to approach issues from multiple points of view to find common ground. This has contributed to their team alignment, impact, and success.

To interact effectively with other people, it helps to know their minds. One way to do that is through perspective-taking: an opportunity to imagine, honestly, the other person’s point of view. While you do not literally see the world through the eyes of another, you can imagine how you would understand the world (or issue, challenge, or problem) if you were in the other person’s circumstances. Good leaders make a conscious determination to not only be open to different ideas, but also to foster creativity by encouraging different perspectives. ”