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June 26, 2006
The Importance of Mission, Culture, Values

For every military operation, there is a mission, a clearly defined, unambiguous statement of what must be accomplished:  Seize and hold Hill 282 until relieved.  Without a mission, a military unit, or for that matter, a corporation, is likely to wander about aimlessly, accomplishing nothing of importance.

A mission statement provides focus, a rallying point, a reason for being.  At Apache:

Our mission is to build a dynamic, global exploration and production company to provide oil and natural gas for the purpose of advancing the quality of human lives.

• We will conduct our business from a foundation of integrity and respect for people, their cultures and traditions. 
• We derive benefit from the Earth and take our environmental responsibility seriously.
• Profit from our growing business is the glue that unites Apache employees, partners, suppliers and shareholders in the fulfillment of our long-term mission.

The bullet points underscore another vital element that every successful organization must have—a culture that all employees accept and adhere to—based on common values.

In the late 1990s, on the cusp of what was to become a tremendous period of growth through acquisition and exploitation, Apache’s managers, directors and officers met to identify exactly what it means to be an Apache, and precisely what common values bind employees together into a successful enterprise.  The process defined Apache values as follows:

• Conduct business with honesty and integrity;
• Respect and invest in our greatest asset--our people;
• Foster an entrepreneurial spirit; expect and reward innovation and creativity;
• Conduct business with respect for people, cultures and traditions;
• Drive to succeed with a sense of urgency.

The list itself wasn’t all that difficult to come up with.  After all, it identified how we already were living our business lives.  Putting it succinctly and paring it down to the basics is what took some time.  But agreement on the values was unanimous.  So strong was the belief in the Apache culture that springs from these values that employee teams were formed to ensure that the process was not just a short-term human resources feel-good exercise, but a living, breathing guide for conducting oneself as an Apache.

Nearly a decade later, Apache values are alive and well.  They provide not just a moral compass for people throughout the organization, but even help in resolving business challenges.  Very often, employee, management or even board room discussions are boiled down to their essence based on Apache values.

“Wait a minute,” someone might say, “isn’t this, at its heart, really a ‘respect for people’ issue?”  If it is, the right decision becomes pretty evident—you choose the solution that fits within Apache’s framework of values.  While not all business issues can be reduced to such black-and-white simplicity, many can, and having a values system in place that everyone believes in very often helps Apaches reach the right answer.

Many of the programs that make Apache unique are reflective of those values and the culture that emanates from them.  Take, for example, the company’s incentives systems.  Almost everybody, at every level of the organization, participates from performance-based annual bonuses, to stock options, to special incentives for achieving a major goal (such as those awarded for doubling the stock price over a four-year period).  Just about everybody is a stockholder and therefore an owner of the company.  If a job is not important enough to incentivize with performance objectives, then that job probably ought to be outsourced.  Apache’s incentive systems are one of the ways in which the company invests in our greatest asset—our people and expects and rewards innovation and creativity.

For a company with international operations in a range of countries, respect for people, cultures and traditions clearly makes a lot of sense.  Because such respect has always been a part of Apache’s culture, it made the company’s transition into an international player a relatively easy process.  Not only did Apache select competent professionals to be its first expatriates, but the company also sought out employees who had the necessary cultural sensitivity.  It was a powerful combination.

Integrity was one value that elicited a lot of discussion.  Many felt that it was a value you lived, rather than talked about, but integrity is such a central element in Apache’s culture that it had to be at the top of the values list.  Integrity means not only doing the right thing; it also means standing up for what you believe in, even when that is not a popular position to take.  A case in point is the “Enron Wars,” a period beginning in the mid-1990s in which Apache, under the leadership of Founder and Chairman Raymond Plank, took on the energy merchant-trading business, in which Enron was the indisputable king. 

From personal observations, both in the merchant-traders’ dealings with Apache and small natural gas producers on the one hand and consumers on the other, Plank realized early on, when Enron was the darling of Wall Street and Capitol Hill, that the company and others in that sector were corrupt.  Plank made exposing the merchant-traders and reforming that industry a personal and corporate crusade, even though many institutional shareowners thought Apache should stand down.  At the end of the day, thanks in large part to the relentless effort by Plank and Apache, the merchant-traders’ house of cards collapsed.

Apache’s sense of urgency is a value that permeates the entire organization.  Time is definitely money at Apache.  Decisions are made quickly and decisively, good ideas are met with a “yes” instead of reams of paperwork and studies, and people are quick to adjust to changing realities.  A prime example involves Apache’s first major discovery, Qarun, in Egypt’s vast Western Desert.  When Raymond Plank and then-President Steve Farris learned that production would be delayed by many months until an oil pipeline could be built, they formed a huge tanker trucking company to take as much as 10,000 barrels a day to market until the pipeline was completed.

A strong corporate culture based on shared values and a well-defined mission are hallmarks of Apache throughout the organization.  One reason this highly acquisitive enterprise prefers to purchase assets rather than companies is to keep the culture that has served shareholders and employees so well for more than half a century intact and undiluted, in order that Apache might grow and prosper for another 50 years.

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