16 Jul 2019
Are energy sector leaders up for tech and renewables challenges?
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Faced with major market changes, energy businesses need leaders with expertise in innovation, technology and customer focus, explains David Craik.
Technological advancement, shifts in regulatory policy and customer behavior are driving energy evolution like never before. And that wave of change has real implications for leadership, skills, and talent.
“New technologies, renewables, smart cities, and distributed energy resources means businesses are redefining the future based on customer requirements,” says Robert Quinn, Partner, and Head of the Industrial Practice in Odgers Berndtson’s Toronto office.
One of those is Ontario-based Alectra.
“The unprecedented and rapid transformation in the global energy sector is being driven by consumers wanting more choice in areas such as home energy systems and technological innovation. There is also the rebalancing of the grid through decentralization, digitization, decarbonization, and democratization,” explains Alectra’s Chief Executive Officer Brian Bentz.
Alectra’s utility business holds approximately $5 billion of assets and delivers electricity to more than one million customers. It also has an Energy Services & Solutions Company (ESS) which in turn has business units including solar generation and smart meter implementation.
“There are very different cultures. There is the project management focus on safety and reliability in the utility arm and more customer and technology focus in the services company.”
Bentz continues, “ESS is more agile, but the way we manage the grid also needs to change. We have to build a grid which is not a one-way power flow but an ‘Internet of energy’ to meet the demands of the new prosumers.” [Essentially consumers who become involved with designing or customizing products for their own needs].
Alectra needs leaders who understand these dynamics.
“At one time, our leaders were focused on asset management skills. Now they bring the lens of innovation, technology and customer focus,” he says. “We look internally but also draw from sectors like blockchain and cyber security and find leaders able to provide new customer solutions,” he adds. “We are looking at IT start-ups and other industries which have gone through similar transformations, like telecoms.”
Renewables and energy efficiency
German utility group E.ON split its business in 2014. Its power generation and global energy trading activities became a new unit called Uniper, leaving E.ON to focus on renewables and energy efficiency.
“The public is more energized about climate change, decarbonization and pollution,” says Chris Norbury, HR Director of E.ON UK.
“The pressure to move from carbon to renewables is enormous and it requires different capabilities and ways of thinking.”
“In the new world, the customer is everything and it gives us new purpose and pride to do good for the planet.”
Employees and leaders need to be reskilled. “We have invested in accredited learning and are using the [UK’s] Apprenticeship Levy to improve skills in areas such as cybersecurity and customer operation,” Norbury says.
Look outside for talent
E.ON are also making key external senior hires when they need niche strategic capabilities.
“We want people who can use their experience to help us with smart solutions for customers,” Norbury states. “On the retail side it hasn’t been our heritage to deal with customers via digital channels so again we need different IT expertise. Putting capital investment in a power plant is different from the more agile and iterative spend we need for customer platforms.”
Finally, in the oil and gas sector, firms are also making changes. For example, BP has developed digital twins of every production system to improve optimization and promoted more agile decision through cross-functional teams.
This article is from the latest ‘Culture’ edition of the Odgers Berndtson global magazine, OBSERVE.