Oiling the machine Featured

8:00pm EDT May 31, 2007

Félix Rodríguez is in the center of the storm, in more ways than

one.

As the CEO of CITGO Petroleum Corp., one of the world’s largest oil companies, his job is affected by everything from market fluctuations to geopolitical strife, from technological advancements to natural disasters.

Through it all, Rodríguez is charged with keeping a company of more than 4,000 employees focused on a set of common goals that are small when compared to the global variables that influence the oil industry.

While the figurative winds of conflict and the literal winds of tropical storms swirl around the fringes of the oil industry, always ready to deal a damaging blow, Rodríguez keeps his employees centered on the basic business concepts of customer service, innovation and community involvement by making sure they carry out his vision, valuing what he values: The ability to take an enormous corporate entity and make its strength the customer interface — in CITGO’s case, taking an oil company with approximately $32 billion in annual sales and turning it into its customers’ neighborhood pit stop, the place where they fill their gas tanks and pick up a snack for the road.

To make that happen, Rodríguez says it all starts with your employees. You must be able to relate to the communities where your customers live, and to do that, you must have a work force that is an active part of the communities it serves.

Your vision and expectations have to be communicated frequently through both words and actions, and you have to listen to feedback on how you can do things better.

Backing up your words

One of the most important things Rodríguez says a business leader can do is back his or her words with actions. He says words are hollow if employees and customers think management won’t follow them with actions.

He says it’s about creating the perception among those you serve that you are as good as your word, so that people will be more apt to believe you when you say something. And the only way you gain that level of trust is by having actions that repeatedly fall in line

with what you preach.

In 2005, Rodríguez’s community-centered platform was put to the test when the U.S. Gulf Coast — where many CITGO employees reside — was struck by hurricanes Katrina and Rita within weeks of each other.

“I went to New Orleans,” he says. “I saw the people living in and around the flood, water 1 or 2 feet or higher. They asked me why did I go there as president and CEO. I went there because CITGO has a refinery in Lake Charles (Louisiana) with a 400,000-barrel

capacity, and that was obviously important. But even more important to me was the people we had living in the area.”

Rodríguez says that as your company grows and its profile increases, your ability to appeal to employees, customers and communities on a personal level can become closely scrutinized. In the wake of the two major hurricanes the summer of 2005, Rodríguez says the first thing he acknowledged was that he not only had 4,000 direct employees of CITGO there, he had an additional 100,000 people who formed the majority of the company network through independently owned service stations. Though they weren’t all affected by Katrina and Rita, he says it helped put his level of responsibility in perspective.

With that in mind, Rodríguez helped establish a $5 million medical assistance program in Lake Charles in the immediate aftermath of the 2005 hurricanes.

Through CITGO’s humanitarian initiatives immediately following Rita and Katrina, Rodríguez says he wanted to reinforce throughout his company the concept of relating to people face-to-face and doing it through actions.

“What you say has to be what you practice,” he says. “This is a very important thing. People read the newspapers, they go to the Internet, they are into various forms of communication. There are many avenues you need to cover to clarify what the mission of your company is.”

Rodríguez says that if you show a commitment to those around you and do it consistently, you will eventually be rewarded with their trust. But it doesn’t happen overnight.

“For me, most importantly, I have to take care of these issues, to let them know what the intention is for the company,” he says. “For me, I try to focus on the core message and vision and try not to get distracted by all the background noise. I try to show the people in the company a commitment so they will show confidence in me and what kind of company we have.”

Employee relations

If a company leader isn’t clear and concise with his or her messages to employees, they will start to fill in the blanks themselves, which is how rumors start. Rodríguez says rumors can become like weeds that choke off productivity and can do long-lasting damage to employees’ — and, in turn, customers’ — confidence in a company if they are left unchecked.

He says people are generally inquisitive and want to know what is going on within a company, and to the best of your ability, you should strive to completely and truthfully answer the questions they have.

“I think any person wants things to be set so they know exactly what is meant when the CEO says something,” Rodríguez says. “You put people in place who ask more and more questions, and first of all, we need to communicate and share our ideas every day.”

In much the same way that Rodríguez wants to appeal to customers on their level, he also wants to appeal to employees where they work, be it at the gas station, the office or the refinery.

On the refinery level, CITGO holds daily operational meetings to brief employees on, among other things, safety and environmental protection policies. Monthly, the company’s leaders meet face-to-face with the managers of the marketing department to discuss ways to adjust marketing campaigns and communication strategies.

Rodríguez says the meetings are based on two-way dialogue, with CITGO’s leaders doing as much listening as speaking.

“We ask our employees what they need, what are they feeling about what is going on,” he says. “This is crucial. This gives us the framework for communicating every day around our vision.”

If an employee comes up with an idea in one of those meetings, Rodríguez says he and his senior leadership not only listen to it but quickly act on it.

Acting quickly on employees’ suggestions or concerns not only gives them a sense that their words are worth something, it also shows the entire organization that you are willing to effect change

when the situation calls for it.

“If somebody comes up with an idea, we act very quickly and understand why they want to do something,” he says. “We correspond with a plan in order to better find something that will benefit the organization.”

The analysis and revision of a new process or product involve many people at CITGO. Ideas are passed back and forth through groups, with each group adding its own tweak or addition until a consensus is reached.

“We might sometimes have a discussion with more than 100 people present when someone comes up with a new idea,” he says. “We have people discuss it at one table, and others discuss it at another table, and through the discussions, we form a new plan. That’s how we build a plan with employee participation from different viewpoints.”

Finding the right people

Forming a work force that follows your vision and embraces your values starts with communication from the top. But you also need to have the raw materials with which to work, and that means finding people who fit the corporate culture you are growing.

To drive your vision downward and outward throughout the company, Rodríguez says you need employees who are receptive to what you have to say — and that begins with their attitude.

He says he wants employees who feel motivated to make a difference both in the company and in the community, and a key component in motivating employees is enabling them to do their best.

At CITGO, Rodríguez enables management-level employees by maximizing their versatility, giving them training in multiple disciplines. He says he’s not asking a chemical engineer to become an operations guru, but he wants everyone on the same page when it comes to projects that require teamwork.

“It is important for employees to have familiarity with different processes,” he says. “For example, if you have an electrical project in a refinery, you might need to involve an electrical engineer and a mechanical engineer to work together on something.

“If the situation involves something in the community, you might need to involve someone who specializes in community relations so that you can know what is happening in the community, in case it impacts the community.”

Though an oil company can deal with economic and environmental issues that far outpace what companies in other industries might see, Rodríguez says the need for a work force that is in tune with customers and the community is nearly universal.

“Our Houston-Galveston refinery was operating when Houston had maybe a million people,” he says. “Now, Houston has more than 2.5 million people. So the people who run the refinery have to consider new equipment, new protection for the community, what

is happening with emissions, what is happening with the electrical set-up inside, what is happening with the law because now you have many more laws — environmental laws, employee laws, community laws.

“So you need to have the ability to work by team and involve different disciplines in one decision and make a plan as it pertains to the law, to engineering, to the community, to supplies. It can become very complex. You need to plan, and have people who can plan for risk on different fronts.”

HOW TO REACH: CITGO Petroleum Corp., www.citgo.com