Egil Myklebust: Getting ready for his new role

(May 3, 2001) Egil Myklebust is looking forward to a long summer vacation, something he has not been able to enjoy for a long time. And although 10 years in one of industry's most demanding top management jobs exact quite a toll, Myklebust will re-emerge after the holiday with batteries fully recharged. His new job as the Hydro board chairman awaits him.

Egil Myklebust

He describes the decade he spent as Hydro's president and CEO as "exciting, demanding and developing," adjectives with which he refers to the company as well as to himself. 

"I have been able to develop qualities that I always thought I had," he says, "but it has also become clear to me that there are qualities I definitely do not possess. Fortunately, however, this organization has never been short of expertise and capacity.

"The special nature of such a job as this is that you take your responsibility to bed with you in the evening and get up with it in the morning. Responsibility never takes a vacation and can only be partly delegated. It can not be kicked upstairs to the chairman. Neither can it, in its entirety, be decentralized. You simply have to learn to live with it."

Now and then things go wrong, as Myklebust himself experienced during his tenure, and the consequences can be severe. Overall, however, he feels that all the things that have gone well by far outweigh those that have not gone so well.

He claimed a while back that responsibility kept him awake, but not at night. Looking back now, was that the truth?

"Yes," he answers. "But there were some very short nights and long days."

More robust
Myklebust believes that the responsibility of the top job has made him more robust, a quality he has tried to combine with empathy and an action-oriented approach. Those very short nights he experienced were usually caused by thinking about the possible consequences of serious accidents in the industrial operations run by Hydro.

"Telephone calls reporting accidents – sometimes fatal accidents – are among my absolute worst moments. Such burdens are heavy to bear, and we of course ask the question: What could we have done that wasn't done? We are spurred on to do more. And the more we do, the more clearly we recognize that it is always possible to do even more," he says.

Is it right to say that he has also placed an increasing emphasis on the environmental aspects of the company's operations?

"Yes, and for two main reasons. The work done in international industrial forums, where I have represented Hydro, have given much food for thought. At the same time I have seen plenty of good examples of how conscientious and consistent environmental commitment can generate considerable commercial opportunities," he says.

"Take, for example, the use of new technology and new concepts in our oil operations, the recycling of materials and the new areas of application for them. In Hydro Agri we see how fertilizers are crucial for efficient plant growth, at the same time as we are mindful of the major environmental consequences of their incorrect application.

"I am in no doubt that the suppliers who will best survive in the long run are those providing the answers to environmental challenges. It is therefore encouraging to see that in Wall Street, the center of gravity of the financial world, Dow Jones has established a separate index for measuring the performance of companies which operate in a sustainable manner.

"I have become more and more convinced that the correlation, which Dow Jones and others believe they can see, is correct. It is encouraging that Hydro has been given a positive rating in the first two years of the existence of the index."

On each other's shoulders
Myklebust started his career in Hydro in 1971, when the celebrated Johan B. Holte was president and CEO. During most of the subsequent period he has worked in or close to the company's top management.

"Each of the three decades – the 1970s, the 1980s and the 1990s – were characterized by the fact that we managed to emerge more strongly from them than we entered them. By more strongly, I mean that we established an underlying strategic platform which provided exciting possibilities for further development, and also because we, despite all of the changes, have retained a solid corporate culture; it has been renewed, but all its fundamental features remain intact."

" 'Hydro's strength is that we stand on each other's shoulders,' Johan B. Holte used to say. As I understand it, there are two dimensions to this: in each decade we have created a strategic basis to build upon. While revolutions devour their erstwhile leaders, this organization has systematically brought its leaders onwards and given them the opportunity to undertake the necessary changes.

"Neither is this simply a matter of course in Hydro. Change processes during recent years have put a lot of pressure on the organization and the people in it. After some quite tough measures taken in the last two to three years, I think that the basic attitude is one of responsibility. Some people say that Hydro has changed out of all recognition. But when I look around, I find that it is by and large easier to recognize Hydro, in terms of attitudes and corporate culture, than most other major companies here in Norway and abroad."

More global and more solid
What is the most important achievement that Myklebust thinks he and his colleagues in Hydro have accomplished?

"The most noticeable feature of the last 10 years is the solid improvement in the company's financial position," he says. "We have expanded from Europe to other continents, and by means of our concentration on three core areas, we are a more systematic player in the global arena. We are a responsible player in relation to the environment, employer responsibility and safety, even if we from time to time have had our difficulties here.

"Our attitude to the environment and safety has evolved into an integrated part of our business philosophy and development. The idea is not only to act responsibly oneself, but to turn this into something we can build into our products and pass on to our customers as an attractive added value.

"This is very obvious in the Light Metals area, where much of the growth impetus is linked to exploiting the properties of materials that are favorable from a life-cycle perspective. We have, moreover, managed to adjust our definition of what is good enough, from the point of view of presentation, to new, more stringent requirements and technological and commercial changes."

Moving on from strategic considerations and business philosophy, what does Myklebust have to say about the more topical concerns of the day?

"Let's begin with the questions we ourselves and others posed two to three years ago about how we would master the combination of economic downturn in Southeast Asia, the devaluation of the ruble and a depressed oil price," he says.

"These problems affected Hydro at the same time as the American economy was booming, with much of the focus of the financial markets directed towards opportunities in what was called the new economy. Hydro was under pressure at a time when the value of many other companies was escalating. Questions asked about Hydro's future potential were especially critical. In a period of strong pressure we had such a solid balance sheet that we were able to make our own choices. We had the muscle to move in and acquire Saga Petroleum, without anyone being able to seriously question our financial ability to do what we did. At the same time, we were able to give ourselves time to set targets and firmly establish and carry through a new strategy.

" In the midst of adversity we had the strength and resources to launch an aggressive business development strategy. We brought about an impressive turnaround operation in Hydro Agri, thereby demonstrating that what we believed to be both possible and the right thing to do, was in fact also viable."

Another core
Since 1999, the company's direction has been to concentrate on the three core areas Oil and Energy, Light Metals and Agri.

"Besides these three core areas, Hydro has another core in the values our organization, and our employees, build on and reflect," says Myklebust. "Among our 38,000 employees, as well as in our central management groups, we can see the emergence of a new, more demanding attitude to our level of performance. It is my definite impression that more and more people comprehend the positive correlation between generating favorable returns for our owners, our industrial development and the work and working conditions of our employees. It is our firm ambition to demonstrate that our performance over the last couple of years has not been a flash in the pan.

"Another core value is linked to business development through exciting technological and commercial innovation in our areas of operation. In addition, as everything we do is anchored firmly within our fundamental traditions of doing what we do in a responsible way, my feeling is that we have a sound platform for future development."

Eivind Reiten: Continual improvement, innovation and sustainable behaviour (2001-05-03)