The energy sector needs new kinds of leaders
18/11/2022
The expanding energy sector needs multidisciplinary expertise
The energy industry has traditionally been the land of technical people. The CEOs have typically had technical education, e.g., M.Sc. in Engineering, and have worked in the energy sector all their lives.
In recent decades, however, a change has started in the energy sector, which reflects the CEO’s profile. The previously well-concentrated and regulated industry has fragmented, and business has become two-way: energy is no longer only produced, sold, and distributed to consumers, but consumers can also act as energy producers.
Since the start of the transition, technically oriented leaders have been joined by economists and environmental leaders, as energy production is often linked to the economic, environmental, and climate change debate. The fact that the energy industry is likely to turn step by step into a software world, where customer behavior and energy flows are managed and controlled with the help of smart technology, will add requirements to the profile of the future CEO. Therefore, professionals from the business, marketing, service, and IT sectors may also compete for management positions in the energy sector.
A new type of CEO handles the networks
The broad-based and diversified energy sector has become an exciting workplace for different people: there is plenty of need for different educational backgrounds and work experiences. The previously regulated industry is starting to resemble ordinary business, which consists of value chains and networks.
When looking at the industry’s upheaval now and in the future, the CEO profile is built on versatile work experience. Of course, the director candidate must be familiar with some aspects of the energy sector, but it is also good to have experience in other sectors. For example, an energy sales company benefits from strong B2C and brand expertise, a service company from good technology, software, and commercialization expertise, and a production company from a broad understanding of the utilization of renewable energy.
The most important thing is that the director candidate sees the analogies between different fields and is familiar with the network-like business with plenty of partners at different levels.
The cooperation between the Board and the CEO determines success
CEO selections of companies in the energy sector are mainly the responsibility of corporate boards. So far, the energy sector does not seem to have the courage to new types of CEOs on a large scale. Many boards are stuck in old traditions and do not dare to renew the CEO’s profile, looking to the future.
When we participate in the executive search for the energy sector’s top management, we seek different candidates for board interviews. In this way, the board can consider different candidates and their added value. At the time of decision-making, boards often play it safe. Still, the time for new types of leaders is coming: the development of a company operating in a changing industry can accelerate if the decision-makers have enough courage to choose in a new way.
The most important thing for every leader is the cooperation between the board and the CEO. If the board does not stand behind the choice, it will be difficult for the leader to succeed. The best results will be achieved when the energy sector boards sharpen and become even stronger and take a more active role, like the export industry. In this way, the CEO gets appropriate pressure and sufficient support to implement the company’s strategy, and the company’s success in the changing market situation is possible.