The energy sector, one of the cornerstones of the modern world, is in a constant process of evolution. Today, technological, economic, geopolitical and regulatory forces are driving massive, rapid change. Overall, in an area that has been traditionally risk adverse, there is a growing need for next level CEO leadership—leaders able to not only manage and lead through ongoing disruption, but capable of making make sense of and adapting within the constantly changing, hugely complex landscape they are operating in.
What it will take to thrive and to succeed in the evolving energy environment will differ a lot from what has been required in the past. Irrespective of the business strategy adopted, a fundamentally new approach to leadership will be required.
The Key Capacities for Future Energy Leaders:
There are four key areas where new CEOs will need to be developed to excel and lead energy companies into the future:
How to Unlock Next Level Energy Leadership
Fundamentally, what must happen in the energy sector is that leaders need to change and expand their mindsets to take on a complexity-informed approach. These leaders do not come ready-made. They must be discovered and carefully developed.
In an outcome analysis of our work, our assessment approach has proven to predict executive performance with up to ~90% accuracy. We’ve found that having good leaders isn’t good enough. Today’s challenges require more. When executives reach higher levels on Egon Zehnder’s competencies, revenue grows. We’ve also found that for above-average growth, companies need a critical mass of senior executives with superior levels of leadership. To belong to the top quartile of growth companies, at least 40% of the senior executives must excel in critical competencies.
Getting to a point of expanded leadership capacity requires an intentional investment in assessment and development. Upon uncovering a leader’s potential, their growth is greatly enhanced by our experience with and commitment to their vertical development.
In the past, development centered primarily on horizontal development and therefore on adding to the relevant knowledge, skills and competencies which sharpen what leaders know and what to do. This way of supporting leaders has served well for a long time and continues to. Still, as the world is becoming increasingly less predictable and more complex, increased attention to the vertical development of leaders’ underlying thinking patterns has come to matter more.
Vertical development refers to advancement in a person’s capacity to deal with complexity and therefore aims to influence how leaders conceive ideas and how they understand the world and themselves. So, in addition to considering which competencies best enable leaders to perform, we now need to keep developing and expanding their identities to show up differently, more emboldened and ready to take on and lead others through the many challenges of the increasingly uncertain realities of business.
It is this immersed attention to their vertical development that prepares leaders to show up differently today, take on the advanced competencies and new capacities required, and to courageously meet the challenges looming ahead.
It is clear what energy CEOs will need in the future, both in terms of leadership competencies as well as the development methods to help them reach these goals. It is a matter of putting the time and resources into meeting these marks. Now is the time to look ahead and to begin the process of transforming the leadership of the energy sector. Incumbent CEOs and boards must invest time and energy into looking deep within their talent pipeline and among external hires to evaluate who has the most potential to become the next, best leader for the organization. It is this deeply focused, immersed succession planning work over several years that will bear hugely rewarding organizational results.
