Energy companies are balancing rapid transformation while navigating the impact of this shift on leaders and their teams. The move toward renewable energy and the adoption of new technologies requires a different skill set and mindset from employees. To remain relevant and innovative, energy companies must embrace a culture of agility, collaboration and innovation while attracting and retaining top talent. Below, we share six key takeaways from Egon Zehnder's 9th Annual Energy CEO & Board Leaders Breakfast, which focused on transformation and how it impacts recruitment, retention and executive development, as well as the culture of companies.
Team dynamics trump the strengths of individual leaders.
With the energy transition as a moving target, the panelists highlighted the importance of finding the best talent for their organizations while ensuring that they fit well with their teams. Leaders today need to be intellectually curious, willing to challenge ideas (constructively) and above all be collaborative. Panelists noted that it’s important for leaders to recognize that the functionality of the team is just as important as doing their individual jobs, and you need to be willing to cut your best player if they can’t play as a team.
For privately held companies, it’s also important for management teams to believe there isn’t a single owner of successes and failures and that they feel supported by their investors. Creating an environment where it’s OK to communicate bad news and ask for support is critical.
Transformation is even more difficult when your company is performing well.
When there is a clear case for change, such as a loss of investor confidence or poor share performance over a sustained period, it’s easier to gain buy-in for a transformation. If your company is performing well, it can be hard to convince stakeholders that it’s time for change. This is when communication becomes key. A panelist shared how his company took the time to explain the new strategy to the workforce, how the company would get there and connected it to their daily tasks. The added benefit to these communications was that it led to a spike in employee engagement, as workers felt like they could clearly see how they could contribute. It was framed it as an “energy addition” not an “energy transition.”
Regardless of the circumstances that led to the transformation, companies must be prepared for a considerable time investment. One panelist shared that proper transformation always takes longer than expected and is usually measured in years not quarters.
You can balance profit and purpose.
The panelists agreed that it was a “both and” and not an “either or” situation when it comes to profit and purpose, especially in the energy transition. It is possible to achieve target returns and have a positive impact by reducing carbon in the energy mix. Companies will need to seek a balance between energy security and transition, managing the systems of today while pivoting to those of the future.
Board members’ noses must be in deeper than before, and CEOs must be prepared for more scrutiny.
The classic “noses in, fingers out” boardroom mantra is evolving, with directors needing to have even deeper engagement with the executive team and bring broader skills sets and experiences that enable them to constructively challenge management. This was viewed as a positive for most CEOs, as they can rely on directors’ past experiences and insights to navigate the complex decisions faced today.
Partnerships are as much about risk mitigation as they are about attracting capital.
The importance of aligning teams with the right pool of capital and managing risks in partnerships was another key takeaway. In new energy, these partnerships are driven by risk management – ensuring the right parties are at the table to minimize the challenges. In addition, these partnerships should be true collaborations, leveraging expertise across the value chain.
CEOs must also now have partnership building among their skills sets and be able to effectively collaborate with investors and communities.
Creating a culture grounded in psychological safety starts with the CEO.
One CEO panelist shared that he proactively reaches out to employees at all levels, asking them questions and working to understand what is and isn’t working, then demonstrating that he is listening and working to make changes. Another panelist added that showing vulnerability is a sign of strength and that leaders shouldn’t be afraid to show their human side.
Equally important is recognizing that while it is essential to give and receive feedback, everyone receives it differently and that leaders may need to adapt their communication styles in order to be heard and make the leadership team as effective as possible.
Lastly, CEOs must care for themselves in the same way they look after their people to sustain their personal energy as leaders. Each of our panelists noted that they make time for mental and physical health through exercise and spending time with their families and friends.