6 June 2023 in CEO Dialogue Series • 
Podcast available
Mostafa Terrab, CEO and Chairman of the Board of the Moroccan fertilizer group OCP, explains to IMD President Jean-François Manzoni how sincerity of intent helped him gain the trust of his people...
When Mostafa Terrab became head of Morocco’s OCP group in 2006, he had a frank discussion with a miner who told him the organization’s biggest asset was not – as his management team was trying to tell him – its sole access to 70% of the world’s phosphate reserves, but rather its people.
“He said, Mr CEO, you have a choice here, a basic choice’,” recalled Terrab. “Either you believe them and we’re going to go to bankruptcy, or you understand that our real wealth is human capital.”
Formerly responsible for the reform of Morocco’s telecoms industry, Terrab credits this conversation with guiding him over the past 17 years as he has transformed OCP from a loss-making governmental agency producing and selling phosphate rock into a leading producer of customized fertilizers with 23,000 employees and revenues last year of $11 billion.
Central to this success has been connecting those valuable phosphate reserves to a broader purpose – to maintain soil health so that the planet can continue to feed its growing population – and empowering OCP’s people to innovate so that they can achieve this goal.
Founded in 1920 with a single mine, OCP’s operations now span the value chain from mining and manufacturing to customized services for farmers, education, and community development.
When Terrab took over, OCP was hemorrhaging money and had negative equity on its balance sheet. Under his leadership, OCP was transformed into a joint stock company, with the state owning 95% of the shares. The change in structure allowed OCP to access international debt markets with a bond issue to fund an $8 billion capital spending plan to invest in higher-margin fertilizer production.
“In terms of managing a difficult transition, I consider we were lucky to have a burning platform, because that allowed us not just to convince, but actually to bring enthusiasm within the company in terms of that change process,” said Terrab.
Describing challenges as “luck” is something Terrab does throughout the CEO Dialogue, underscoring his belief in maintaining an optimistic and positive attitude as a leader.
His first step as CEO was to excite people around a greater purpose. “Phosphate has this special role in terms of soil health – it’s really the vitamin for the root of the plant,” he said. “We bring life to the soil so that the soil can feed us in return.”
If people think you are sincere, if you've managed to convince them that you are sincere – in Arabic we call it niya, which means sincerity of intent – then the trust is an outgrowth of that.
The purpose acts like a “North Star” which guides how employees think and act, he added. Once this was in place, Terrab was able to strip away layers of bureaucracy to free people up to take risks.
In 2016, OCP launched a bold initiative called “The Movement” which was aimed at decentralizing the organization and encouraging employees to innovate by working on a topic of their choice, as long as it would bring value to the group. This was a radical move in Morocco’s traditionally hierarchical business culture, and there was some resistance from skeptical managers who thought it would spark chaos. But that didn’t happen.
The departure from a command-and-control style of management also reflected the change in OCP’s workforce. During the first five years of Terrab’s tenure, 10,000 employees reached retirement age and the average age at OCP dropped from 47 to 35. Thinking that this empowered way of working would mainly appeal to the group’s younger white-collar workers at its headquarters, Terrab was surprised when the movement spread to its production sites, with many blue-collar workers submitting excellent ideas to improve productivity and safety.
Another key pillar has been education, with staff encouraged to be life-long learners and to develop their knowledge throughout their careers. OCP even founded the Mohammed VI Polytechnic University to support R&D. “We like to think we are incubating a university that will in turn incubate the new OCP,” he said.
Reflecting during the CEO Dialogue on how he managed to bring his employees with him during the transformation, Terrab stresses the importance of one of OCP’s core values: sincerity of intent. “If people think you are sincere, if you’ve managed to convince them that you are sincere – in Arabic we call it niya, which means sincerity of intent – then the trust is an outgrowth of that.”
Terrab put this sincerity of intent into action during his second visit to a mine when the workers came to him at 10pm one evening and asked him to go down the mining shaft with them.
“This was an old underground mine that was no longer operating, but that they had kept open for one specific purpose, and that was to take the new CEO down the mine,” he recalled. Terrab agreed, and when they later came back to the surface, he was told: “Now we know we can trust you.”
When you are in this constant discovery phase, that’s what keeps me going. For me, it’s not the same job. What I’m doing today is very different from what I was doing four years ago.
When he asked why, they laughed and told him some of his predecessors had refused to go. “And this was a key moment I think in terms of trust,” he said. “So these colleagues have a way to test sincerity and trust, and this was also another key moment for building that alchemy.”
Later, during the 2008 financial crisis, Terrab was confronted with a tangible sign of this trust. The market for phosphate had collapsed, and lacking space to store stock, OCP decided it would have to shut down some of its production. When he spoke to the managers of the mines, he was told that workers would go on strike if this happened. He then spoke to one of the workers who said they would trust him if Terrab believed it was strategically the right thing to do.
“Can you imagine the strength that people like this can give you in terms of the trust they are putting in you and that you can put into them?” he said.
With the first stage of OCP’s transformation complete, Terrab has now turned his attention to accelerating the lowering of the company’s environmental footprint. OCP has announced plans to invest $13bn in renewable energy and green hydrogen with the aim to be carbon neutral by 2040.
Terrab also sees OCP playing a role in global food security. “Without fertilizer, we could only feed half of the world’s population,” he said. As arable land per capita decreases globally because of population growth, Terrab notes that 60% of the world’s unused arable land lies in Africa. “We have to find ways to make Africa contribute positively to global food security. In the meantime, we have to also contribute to Africa’s food security.”
OCP is deploying machine-learning algorithms to help it produce fertilizers that are customizable to crop conditions and farmers’ individual needs. This means they are cheaper to produce and without damaging the environment because the nutrients are fully absorbed by the soil and plants and don’t get into the water table.
Terrab describes soil as the planet’s “most underestimated asset”, which could be a new weapon in the fight against climate change if agricultural practices become more regenerative. “We have estimates that soil, if treated correctly, can sequester twice the amount [of CO2] that we emit, every year on the planet!”
After 17 years at the helm, it’s clear that Terrab still remains just as excited about OCP’s future.
“Being in this constant discovery phase, that’s what keeps me going,” he said. “For me, it’s not the same job. What I’m doing today is very different from what I was doing four years ago. And the fulfillment comes from seeing colleagues grow and have that spark in their eyes that you can see here and there. That’s an amazing fuel for life.”
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