In 2023 we have seen significant changes with 1.1 trillion invested globally on energy transition project  and the IEA has seen a significant uplift in renewable capacity that they see renewables over the next 3 years no only taking on the increase in demand for energy generation but also taking on capacity that was previously provided by fossil fuels.
However, are we moving quickly enough?
There many MBA case studies of companies faced with external changes to their environment who did not move fast enough namely blockbuster and Kodak.
Kodak invented the first electronic camera in the 70s and had electronic camera and was making big investment in the new technology. However, it did not want to cannibalise its film sales….
Could this be what might happen to some of the IOCs now?
Orsted who moved from a fossil based company to a renewable based company have 2 key lessons on the change
1. It is exponential and leaders need to work hard to stay ahead of the change
2. It happens faster than you expect in their case 10 years when they had planned for 30 years
Most energy companies are planning on Hydrocarbons being part of the mix for the next 30-50 year what if this was a third of this ie 10-20 years how could leaders approach things differently and increase their levels of readiness?
Here are 4 things all leaders should focus on:
Operating model: how does it need to change? What does the future look like and what are the steps to that? How can you design your operating model to enable faster decision making and skills development
Middle management: the survey results indicated these have the least confidence in the do ability of the transition. Engaging them will be key to accelerating the energy transition
Resource allocation: both people and money, there is a conflict around investing in known highly profitable projects in mature energy sector vs in the newer technologies of the energy transition and renewables. Capital allocation risk management processes need to be adapted so that the more strategic projects can compete. This also applies to how people are allocated which may require an organisation design to allow people to move more freely between projects. Monitoring of the allocations and how value is generated is also important to ensure the allocation in practice is aligned to the strategy
Future workforce: 85% of jobs that will exist in 2030 don’t currently exist , this is probably even greater in energy given the degree of change. Leaders need to coach, invest in skills and develop their people to develop the workforce of the future. In addition there is a big influx of people from new industries bringing new thinking and ideas which is key. It will be critical to bring together these people with people who have been in the sector for many years. These types of diverse teams are challenging to work in jet produce exception results and solutions which is what is needed to deliver the energy transition, they will need exception leaders to guide them and support the team members.
 Bloomberg NEF Energy transition investment trends 2023
 Research from the institute of the future
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