The modern electric grid is recognized as one of the greatest inventions of the 20th Century: It has given right of way for every technological innovation that followed. We are now entering a new era of transformation in the energy industry that will give rise to innovations ranging all the way from greater efficiency to saving our planet.
Great leaders rise amidst great circumstances. Successful leaders are able to overcome the established assumptions of their time, the accepted rules of their industry, and the belief systems of their peers.
We compared the average age of an S&P 500 company, and the subsidiaries that make up the S&P 500 Power and Utility companies. The energy transformation could be made even more challenging by the inertia of century-old assumptions about the industry.
The utility industry is largely made up of 100-year-old companies with 100-year-old business models inside a 100-year-old industry. Today’s utility leaders will have to make a choice: to lead the 101st year of the existing industry, or the first year of a new industry. Choosing the latter means redefining the set of assumptions to operate from. They will succeed in building a new future by breaking out of the inertia of previous generations.
Today, the industry is fueled by uncertainty. There are questions around the role of natural gas as a transition fuel, nuclear generation, and unaligned national policies on the role of fossil generation. Traditional fleet management and planning do not seem to fit a rapidly changing future. Who is to say what the generation mix will look like 100 years from now?
Successfully solving these issues opens the door to a new energy future. Failure to solve these issues will likely render companies obsolete.
There is a clear fork in the road. Leaders can take the opportunity to lead a future they define. Or they can follow the current path of someone else’s making— an extension of what has been.
The leaders who differentiate themselves and their organizations will do so because of their ability to translate their grand ambition—their bold vision for transformation—into the hearts, minds, and behaviors of their teams and people.
In our experience with the utility industry, we have discovered a pervasive mindset that will inherently hinder a CEO’s ambition to lead a new energy future: The energy future is uncertain.
Uncertainty is a given in today’s business reality. What was true yesterday may not apply today. This uncertainty has shown up across the energy sector in different forms, including titles of panel discussions from prominent industry events:
- Natural Gas: A Bridge or a Destination? (2019 EEI Annual Conference)
- Decarbonization: The Big Question (ETS19)
- The Utility of the Future: Disrupted or Disrupter? (ETS18)
- Pathways to Securing Our Energy Future (2019 AGA Executive Conference)
- Cybersecurity: How Can We Be Ready? And Ready for What? (GridFWD 2019)
- Who Will Actually Build the Real DERMS? (GridFWD 2019)
Mindsets keep existing assumptions and beliefs in place—after all, the mind is ‘set.’ It can be difficult for an organization to execute a new strategy with speed when a common mindset of uncertainty exists, and a legacy of success suggests staying the course.
There is a solution, and it starts with leadership. The CEOs and senior leaders we’ve worked with have challenged themselves to develop a bold vision of the future—a vivid, high-definition picture of the end state—and then enabled the people in their organizations to alter their mindset and organize themselves to deliver. These leaders bring everyone along with them into the vision, even when it initially doesn’t look possible given the current set of assumptions and beliefs.
Success, then, comes from systematically translating the bold vision into the entire company, top to bottom, by enabling people to see the existing mindsets, move out of them, and create new solutions and pathways.
Ultimately, CEOs with the ambition of building the new energy future will be interrupting the inertia of the past and walking their people out of the mindsets and assumptions of the past 100 years of success. The leaders in the organization can then execute the future vision together.
While technological breakthroughs are needed, transforming the mindsets of the people is the key to leading the future.
Great leaders rise amidst great circumstances; they are known for the new futures they create. They overcome the established assumptions of their time, the accepted rules of their industry, and the belief systems of their peers.
The new energy future for our world already exists in the minds of leaders—it will be realized by those who choose to articulate and boldly lead the future they define.
“There are risks and costs to a program of action. But they are far less than the long-range risks and costs of comfortable inaction.” -John F. Kennedy
