All posts by hindfarag

How Clear is Your Vision?

A well-articulated vision can be your most important tool for creating positive employee and client experiences, hence maximizing financial growth. But surprisingly, in many successful organizations the top leadership vision for the future is an area of ambiguity for the majority of employees.

Only “22% of employees strongly agree the leadership of their organization has a clear direction for the organization.” according to Gallup’s State of the American Workplace Report

The lack of clarity around your vision can be most detrimental to optimal employee and client experiences. Spending a little bit of time on clearly articulating your vision and establishing alignment around it can go a long way in maximizing potential for your people, your organization, and you. Here are a few examples:

  • Results that exceed expectations. A clear vision offers guidance as to where the organization is heading and its key pillars for getting there. This creates space for employees to take initiative, going above and beyond their stated goals to serve a bigger purpose while realizing their potential.
  • Prioritizing clients. If developed properly, a well-articulated vision is constant reminder of who you are looking to serve and what makes you unique for them. It offers the foundation for developing and implementing strategies that optimize the client experience. As a result, your people are motivated to operate as a single team that is responsible for creating better and better client experiences.  
  • Attracting and retaining top talent. High potential talent is typically looking for ways to align their capabilities and ambitions with a fulfilling and promising future. Sitting there and doing as told becomes underwhelming for them so quickly. A clear vision that allows them to reach for the stars is a big part of what they need to fuel the growth of your organization and stick with it.

Developing or revisiting and communicating your future vision may seem like a cumbersome effort that delays operations and delivery. Honestly, doing it right doesn’t typically take that long for an already successful organization. Yet, it multiplies your success in ways that could even be much beyond your own imagination.

Connect with us and let’s discuss our approach for facilitating visions development, articulation, and alignment using a simple format.

Energy industry leaders: beware of your blind spots!

Lessons from our executive coaching and leadership advisory work

It’s well established now that the energy industry is somewhat a lagger when it comes to innovation, diversity, equity, and inclusion (DEI), and attractiveness to Gen Zs or young talent in general. Through our work as an energy industry executive coach and leadership advisor, my clients and I have identified some common blind sports that seem to be partially behind this delay.

Our executive coaching, leadership development, and strategy consulting clientele come from the different industry sectors: oil and gas, utilities, renewable energy, and consulting practices. Some of these segments are younger and more dynamic than others. So they may score more highly in innovation, DEI, and attractiveness to the younger generation. But the blind sports that we list here are useful for improving profiles across the different segments.

Identify and address your blind spots

Before you review our list, we suggest that you consider blind spots that you’ve identified for yourslf as potential hurdles for innovation, DEI, and succession planning.

We have identified three common blind spots where leaders show up as lacking balance or awareness, and hence too closed off to embrace innovation, diversity, and exponential growth.

Balancing trust and competency

This appears to be a challenge for executives who have identified a close circle of employees that they clearly trust more than most other employees. The result is typically a wider perception that useful information and growth opportunities mostly go to members of this inner circle. Some may view this as favoritism and others may feel that it renders their leader blind to the real potential within their organization. The leaders we work with benefit from becoming more inclusive in their interactions and casting wider nets for engaging about new opportunities.

Balancing authority and influence

Expecting employees to do what they are told to do is getting old. In best case scenarios, they will exactly deliver what they are being asked to deliver to avoid unfavorable outcomes. The most innovative, ambitious talent starts looking for fulfilling roles elsewhere. They seek leaders who are strong influencers and open up the space for people to grow. This motivates them to go beyond implementing the visions of their leaders into taking ownership of the future. This is where innovators find room to grow and surprise their leaders with results that they themselves haven’t envisioned.

Clarity and accuracy of DEI-related communication

“We don’t have an issue here. We’re a pretty diverse organization. Look around you!” Assuming that DEI is just about gender and racial diversity may very well suggest to your employees that you don’t know what you’re talking about. Equity and inclusion have become far more important than diversity quotas and they can easily drive your diversity numbers up. Also, most top executives are not DEI experts. I would start by letting the experts collect and analyze the data and empower employees to share their experiences. An accurate picture of the state of DEI and a clear plan can go a long way in reinforcing your credibility as a leader and restoring faith in your organization.

Which of these resonated with you or with your experiences with other leaders? What can you do about them?

The trick with blind spots is that they may be noticeable for everyone around us but impossible to notice for us. This makes them a quick win in any professional development journey.

Contact us today to schedule your complimentary strategy session and discuss your strategy for identifying and addressing your own blind spots.

Things that Leaders Say: Unintended Consequences

Leadership is practiced through communication. Small things that leaders say make all the difference in employee morale, productivity, and loyalty. It all comes down to compassion and messaging. Feeling respected, valued, and challenged motivates every talented and committed employee to stick around and do their best. On the other hand, capable employees know their worth pretty well. And if you treat them with disrespect or lose their trust, they will quit either silently or physically.
The more leaders understand how their communication is received, the more intentional they can be about their impact. To offer some examples, I go through some things my managers have said to me throughout my career. The outcomes of these messages ended up being very different from their initial intentions.

1. “What would we do if you get hit by a bus tomorrow?”

My manager here was trying to express his desire to mitigate the risk of losing me given my unique capabilities and contributions. But he actually made me feel like I didn’t matter. I started looking for my next opportunity.  It wasn’t long before I left for an employer that I felt would sympathize with my family and me if I got hit by a bus! Making employees feel like they don’t matter could be one of the biggest mistakes a leader can make. And doing so with high potential employees can be most drastic. This statement above is still leaving a bad taste with me 19 years after I parted ways with this manager.

2. “Thanks for pointing out that your compensation doesn’t match your value and contribution here. I definitely agree. Let me look into it!

I had brought up with our business unit leader that my pay was too low for my qualifications and performance levels. His response made me feel like I was being valued and appreciated. I ended up staying, made some of my best contributions, and followed that leader to his next job. And it was because of the trust he gained with his honesty and respect rather than the salary raise he offered me later.

3. “I am sad you’re leaving us but happy that you’re being pulled into an exciting opportunity rather than being pushed away by us!”

In this situation, I had submitted my resignation after accepting another exciting opportunity. This response from a leader that I looked up to was pretty inspirational. When I was ready for my next career move later, I reached out to my ex-employer and returned later for a much better opportunity under that same leader.

Inspirational leaders say things that their people keep carrying to other jobs and companies. This leader was more than reassuring during a major transition. It has also been helpful for many of those I work with and coach. My clients probably all heard me ask them whether any of their decisions were push rather than pull-based. Consider this question: what have you said to inspire your own team that they can carry around your organization and elsewhere?

4. “Prepare a presentation to demonstrate to us your ability to complete your work on time.”

Rather than appreciating and leveraging my impact on people as a leader, my manager assumed I was spending too much time on the people management side of my job versus project deliverables. He didn’t ask about the status of my deliverables. This conversation basically drove me to prepare my resignation. I later was able to find a much more senior and influential leadership role with a company whose leadership made me feel respected and trusted.

The assuming leader could easily be the least effective leader. Making inaccurate assumptions based on what you see on the surface is a solid de-motivator of people. Staying curious and inquisitive would have been much more useful in this situation for working together on assessing and closing any performance gap. But assuming lack of delivery based on scattered observations is one of the quickest ways to disengage your employees and demotivate them. Ask yourself one question: to what extent are you successful in making your employees feel like you are partners in success versus a police-person and suspects?

5. “We have an important role for you to play in a new job,” in reference to a much more limited and limiting role

My manager mentioned this only when I said that I’d read between his lines that he was hiring my replacement. I was actually on the interviewing committee for another role and I had to guess that the intention was to replace me. Apparently, some of my colleagues had known about it while I didn’t. The interviewee himself knew about it. I could not trust my manager or his managers after this incident. Regardless of how suitable the role he described was for me, I didn’t feel safe anymore continuing to work for that company. So I started making plans for my next career move and resigned soon after.

This is very common. Many leaders tend to choose confidants from their teams that they share their plans and preferences with. Other employees are left to read between the lines. The confidants may know much more about an employee’s situation than the employee themselves. This is a shortcut to losing the trust and respect of that employee and everyone who’s watching the leader do that. It is also usually where confusion and rumors begin. Transparency, on the other hand, is a leader’s best friend. It helps with mitigating attrition, disengagement, and poor performance.

And one last thing to say…

Nothing beats being honest and respectful to be the best versions of ourselves as leaders. There are definitely limitations to how far we can go in making our people happy. We may not be able to get them where they want today. And they’re probably willing to accept that as long as we acknowledge how far along they’ve come, what’s next, and what it means for them. Finally, nothing beats committing to do your best for your people. In return, they’ll commit to doing their best for you, your organization, and your clients.

Leaders: Hedge your Motivation Position Now!

The Great Resignation, Silent Quitting, Disengaged Employees- Why?

Motivation might have become the rarest commodity for employers, hence the Great Resignation, Silent Quitting, and disengaging employees. This is probably the first time in our lifetime to remain in one collective trauma after the other for almost three years and counting. Many have lost loved ones in the process and others ended up with lasting health effects from COVID. And a good majority is feeling less financially secure with growing inflation worries. Also, almost every industry is experiencing some major disruptive transformations: Environmental, Social, and Governance (ESG), energy transitions, climate change, digital transformation, supply chain crisis, and Diversity, Equity, and Inclusion (DEI), to name a few!

The motivation crisis may be bigger than the energy crisis, the environmental crisis, or the supply chain crisis. Because only when we have motivation are we able to address these crises. And some crises may actually be caused by the lack of employee motivation. Amidst all these disruptive challenges, many employees seem to be losing their motivation to stay employed or at least do their best. But this problem is not without a solution. It takes authentic engaging leaders.

What does authentic and engaging leadership look like?

You may also be struggling with your own motivation as a leader. And you probably know that you and your organization are not alone in this search for passion, excitement, and motivation. So how can you get some of that motivation back while we’re all still in the middle of the storm? It’s your opportunity to flex your leadership, stakeholder engagement, and change management muscles in new ways. Here we share some tricks that worked for our clients and their teams.

  • Purpose. Ensure the clarity of your true purpose behind doing what you’re doing and how it aligns with your employees’ values. This will take a methodological approach to communicate and explain this purpose across the different layers in your organization.
  • Vulnerability and Authenticity. Show up as an equally struggling human being that doesn’t have all the answers despite being at the top of some ladder. Also, don’t shy away from sharing some of your own unpleasant personal experiences and how they make you feel.
  • Empathy. Take (rather than fake) genuine interest in how your people feel, what they’re going through, and how you can all help each other. It’s becoming more and more difficult for people to follow leaders who seem like they don’t care about them.
  • Professional Help. Seek and offer to your people help in the form of  peer-to-peer mentoring and coaching, as well as therapy, counselling, and coaching support from independent professional services.
  • Learning. Acknowledge that none of you has ever gone through a similar experience in the past and raise the bar for learning and development within your organization, starting with yourself. Set the examples in acquiring new skills and capabilities for a new normal.
  • Challenge. Redesign organizational structures and roles in ways that challenge every employee to take responsibility for mitigating newly emerging risks and taking advantage of new opportunities. Take the time to match people with work that excites them and helps realize your vision and strategic goals.
  • Accountability. Hold yourself and your most senior leaders accountable for meeting your own goals before you hold your employees accountable. Ensure that the general perception within your organization is that reward is directly tied to performance.
  • Comradery. It’s not about who’s at the top anymore and unless people feel you are in this together it will be almost impossible to keep them motivated. Have fun with your people and encourage two way communication. If you want them to be motivated by your messages and actions, start by allowing them to motivate you!

How about you? What are you doing to keep yourself, your team and/or organization motivated?

If you’re having to tell your people to work more hours, it’s time to revisit your own leadership practices!

At the beginning of the Mental Awareness Month this year, I would like to draw the attention of leaders to the importance of creating a work environment that prioritizes employee physical and mental health. Relying on financial growth and career progression opportunity alone to motivate people means that they work for you because they have to, not because they want to. Many leaders wonder why their people aren’t bought into their visions and giving their best. People will only do their best in environments where their mental health is not being jeopardized through a series of unreasonable requests or disrespect. As I typically say to my clients, try a little more compassion and kindness.

I was discussing this with one of my favorite clients a couple of weeks ago and he drew my attention to the fact that it took two. As the CEO of the organization, he pointed out that if your “senior leaders are constantly under delivering and hurting the business you may yourself having to pressure them to work harder and put in more hours.” After a short conversation we agreed that feeling the need to manage your employees’ time and workload is a symptom for a bigger issue that requires addressing. Start asking yourself about the balance your work environment provides, mainly related to the following:

  • Competence. How do you feel about the ability of those who constantly under deliver to address the responsibilities you’re assigning to them?
  • Support. To what extent are you supporting your team with their enablers for success?
  • Accountability. How effective are your management practices in establishing and enforcing accountability?
  • Consequences. To what extent do you, your leadership team, and other employees bear the consequences of your own lack of commitment?
  • Engagement. How would you rate the actual buy-in of your vision and why it makes sense for people to do what you’re asking them to do?

Typically, the answer is some combination of all the above. So making everyone work much harder will make the problem fester longer and result in dissatisfaction among those who are actually delivering. If you ask me what to do, I would say do what my client and I are doing: identify and resolve the actual problem(s). And while you’re doing that don’t forget to give your employees the best wholistic employee experience which would encourage them to give you their best performance. Otherwise, they’ll keep doing what will secure their paychecks and protect them from any headache noncompliance may cause.

Photo by PhotoMIX Company: https://www.pexels.com/photo/white-sitting-behind-counter-under-television-518244/

The Resignation is GREAT, but are your strategies great enough?

Like many business leaders, many of my executive coaching clients are concerned about their ability to stay afloat, let alone grow in the face of the increasing risk of employee attrition. We can claim that this post-COVID19 phenomenon has caught us by surprise. But we will soon be out of excuses. The global trauma that we all been going through remains a wake-up call for many. And many of your employees may very well wake up to the fact that they do not want to be working for you!

However, it seems that many leaders are still handling the Great Resignation in a reactive manner that falls short of addressing the tectonic shift that it is. Working through this situation with several of the executives I coach, I have become familiar with the temporal nature of this challenge. Therefore, different strategic options emerge different time frames. Below I offer a framework for a more proactive approach for handling the retention challenge.

Immediate: the Departing Employee Matters

The fact that there is a mass exodus from the workforce, some of which without immediate reentry, can just be a symptom for bigger issues. Also, your leavers my continue to be good resources for you. Therefore, consider the following:

  • Take the exit interviews seriously. Beyond being an HR formality, they are an opportunity to learn about challenges to talent retention in your organization. They will be helpful for reducing your attrition rates.
  • Avoid burning bridges with the departing employees. They are important future human resources for you. Your brand as an employee and a business will benefit from their word of mouth. Also, you may be able to establish contract arrangements with some of them to help with easing off the workload and sustaining your operations while you figure out longer term solutions. And, you may stand a chance of attracting your top talent back!

Short-term: Beware of Similar Decisions in the Making

Your exit interviews will provide you with a foundation for understanding the attrition risks you could be facing. Next, I recommend that you engage managers and employees, establishing partnerships to address some basic questions?

  • Who’s next? Who else may be having similar concerns to the leavers and, thereby, contemplating similar decisions?
  • Do you want to retain them? What can you do to retain them?
  • What are the morale and workload implications on those who may be happily choosing to stay with you?
  • What are some creative resource solutions to rationalize the workload?

Medium-term: Work Ethics Matter More Now

Another phenomenon that is emerging is that some employers may now be rushing to refill the open positions so fast that they forget to check on the candidates’ work ethics. In less drastic cases, they may sacrifice the cultural fit. What my clients have learned is that they may loose more time through the damage that a misaligned employee may cause. Eventually, they will have delayed their recruitment of  ‘suitable’ candidates by the few months it takes to recruit, hire, and fire the wrong candidates.

Long-term: Time for Leaders to Play Catch Up

The world has moved on from the “because I said so” leadership style and it’s time for leaders to play catch up. The Great Resignation is here to teach us a few leadership lessons. Leaders now are constantly being challenged to sell the idea of employment to their employees- let alone the idea of working for their organizations and each of them in person. This is probably the subject line for another blog. But what we know for sure is that two sets of long-term strategies must be in question now by most organizations:

  • Talent acquisition, development, and retention strategies
  • Leadership selection and development strategies as well as the key performance indicators (KPIs) to measure success and keep leaders accountable

And, finally let’s keep in mind that “human” resources require authentic and compassionate human leadership that values them and prioritizes their fulfillment and growth!

Whether you’ve been directly affected by the Great Resignation or not, its disruption of workforce dynamics will affect every organization and its leadership. To discuss what it means and how to be more proactive about it, contact us to schedule your free strategy development consultation.

 

Diversity and Inclusion as an Enabler for Great Leadership

On this International Women’s Day, let’s talk about empowering leaders not women because they need strong and diverse partnership now more than any gender ever needed help

It’s time to shift the global mindset around women issues. Regardless of the roles they play in families, communities, businesses, and/or governments, it has become crystal clear that women can be astonishingly resourceful, insightful, and powerful. Even in the most disadvantaged or traditional communities, matriarchs have been known to have transformational impacts on their tribes including the most mature and strongest male leaders. Organizations and communities that deprive themselves of real contribution from women could be depriving themselves of not only opportunities to grow but also their chances of survival. It’s like turning off half of your brain or one side of your body and expecting to compete with those who bring their whole bodies or brains to every situation.

Historically, many of us come from communities that held matriarch leaders in high regards. But, we’re having to fight some long battles in modern times to secure seats around the table as women leaders. Now more than ever, new and different risks and opportunities are facing community, business, and state leadership everyday. This diversity in challenges and opportunities requires diversity in thought and approaches. Yet in many circumstances we find ourselves having to justify the need for inclusive leadership. And we still address women issues from the point of view of solving problems for women and empowering them. Effective and successful leaders understand that they are not going to be able to conceptualize and realize grand visions just by surrounding themselves with people that look, think, and interact like them. They look to empower themselves with improving diversity and inclusion (D&I) at the top levels.

“A good leader can engage in a debate frankly and thoroughly, knowing that at the end he and the other side must be closer, and thus emerge stronger. You don’t have that idea when you are arrogant, superficial, and uninformed.” Nelson Mandela

As eloquently put by Nelson Mandela, great leaders seek diversity in thought and get excited about engaging in debate and growing collectively in the process. They understand that by inviting differences in opinion, approach, and human interaction style they will be able to expand their opportunities and mitigate their risks more and more creatively. The opportunity costs of homogeneity in leadership can be very high and many of us have observed them first hand. I believe that improving gender diversity and inclusion will require a mindset shift around the way we approach leadership development and assessment. Realizing our full leadership potential going forward is going to mostly hinge on a leader’s ability to leverage D&I as an enabler for their own growth and success rather than an objective in and of itself.

Starting with vision, we have long entered a world where leaders are differentiated by their ability to develop and realize visions that go beyond their individual imagination or the imagination of those with similar backgrounds. A key question for leaders to consider is: to what extent have women and other diverse groups with different backgrounds influenced your vision?

When it comes to strategy, regardless of whether a leader is be empowered by D&I or not, their competitors, vendors, and clients probably are. Leaders would benefit from continuously asking themselves if they are at least at par with their competitors and vendors in terms of the diversity of expertise they attract and truly leverage. Another important question is about the extent to which members of leadership teams represent current and potential market niches. Much money is being left on the table by leaders that refuse to build leadership teams that match the diversity of their clients and competitors.

And of course the importance of communication to successful leadership cannot be overstated. Effective communication takes listening to what’s not being said in addition to what’s being said, which can be very challenging. Another challenge is getting your message across as a leader in ways that motivate an increasingly diverse workforce and attract an increasingly diverse client and investor base. In today’s complex world, it’s practically impossible for a homogenous leadership team to master communication without the contribution of leaders whose genders, backgrounds and experiences prepare them to communicate differently.

I’m sure much of what I shared here is not shocking. But what’s shocking is the fact that we still talk about helping women much more than we talk about helping leaders and organizations through attracting more insightful, powerful, and resourceful women.

Lessons for Leaders: What has 2020 told us about 2021?

In bidding 2020 farewell, the world has been filled with hope that the suffering of 2020 will come to an end as the year came to an end. But it is no secret that the world doesn’t necessarily go through a factory reset on January 1. This is not all bad news though. The turbulent ride that 2020 was has given us certainty about the uncertainty of our present and future! Things are going to remain volatile for a long time.

Now we can stop guessing

Most of the risks that leaders and strategists typically incorporated into extreme future scenarios in the past ended up manifesting one way or the other in 2020. You probably remember when extreme strategic scenarios reflected one or two of the following combinations:

  • A serious global pandemic resulting in major lockdowns and geopolitical disintegration
  • An oil market crash and major global economic downturn and restructuring
  • A breathtaking digital transformation connecting human communities in new ways and threatening personal privacy and security
  • An expedited energy transition supported by breakthroughs in alternative energy and storage technologies
  • The expansion of the virtual workplace, and exponential growth in ecommerce
  • Increasing weather volatility and natural disaster occurrence

Many of these risks are here to stay. And even if the pandemic situation is resolved in the next year, many of its implications are long-lasting if not permanent. Of these, we have identified five themes that appear to be most critical for strategizing for success in 2021 and beyond. Several of these have already been discussed in previous articles over the last couple of years, as noted below.

1. Energy Transitions, ESG, D&I and the Human Race’s Search for Purpose

We clearly are at an interesting stage of development as a race. There is a rising sense of consciousness over how what we do and how do things impact our environments and the lives of other people and creatures. This is especially true for most millennials and Gen Zs who tend to at least partially evaluate employers and product and service providers based on their approach to diversity and inclusion (D&I) and environment, sustainability, and governance (ESG) issues. Employers are also now being increasingly challenged to align jobs and assignments with employee purpose.

By the same token, the investment and regulatory communities are gradually withdrawing support from entities whose operations are believed to simply pollute the environment or reinforce bias and discrimination. There is no going back from this and regardless of how much we may want to argue against it, financial and economic metrics along won’t be sufficient going forward.

As we discussed in a previous article, sustainability-oriented business models will have better chances of winning in the new normal. This, together with the demand shifts described below will continue to accelerate the transition of the energy system away from the domination of fossil fuels. The pace of this transition is still being debated. There is growing conviction among many including oil and gas supermajor that we are already beyond peak oil demand. This is a huge departure from the previous consensus that it wasn’t going to occur until the late 2020s – mid 2030’s.

2. The Expansion of the Virtual Workplace

The technology that supports remote working, team building, and leadership solutions had been here for some time. But the imperatives of social distancing in 2020 drove significant investment in and utilization of digital applications for establishing virtual workplaces. In the middle of the year, major tech companies like Google, Facebook, and Twitter began making announcements that their employees would be allowed to work from home permanently. Leaders have now had experience with the remote workplace concept and developed more appreciation for its positive impacts on efficiency and effectiveness. My earlier article on employee and leadership behaviors in the new normal describes shifts that drive the expansion of the virtual workplace beyond COVID into the next normal.

3. Freelance Work and Small Business Sector Growth

Empowered by technology and challenged by economic downturns, freelancers are finding flexibility and security in establishing multiple sources of income. On the other hand, employers, and especially other freelancers and small businesses are increasingly finding it more cost effective to rely on freelancers. This is especially the case for temporary or intermittent resource and unique skillset needs. In 2019, about 35% of Americans freelanced and it is estimated that 43% were freelancing by the end of 2020. Also, freelancing tends to be favored by younger generations, with 53% of Generation Z (18-22 years) freelancing by 2019. By 2027, some expect that freelancers will make up more than half of the U.S. workforce.

By contrast, the small business sector contracted in 2020 as a result of the COVID health and economic crisis. But the outlook for small business growth in the next few years remains strong with millennials and Gen Zs continuing to show preference for being their own bosses. In addition, barriers to entry are now lower in many industries as the digital transformation is availing new analytic and business networking capabilities that may be much easier for smaller and newer entities to leverage.

4. Major Demand Shifts Driven by the Technologically-Empowered End User

End users are being empowered by technology in a few ways, as I elaborated in an earlier article. These include the growing availability of information about products, services, and providers as well as the easier access to a wider variety of providers. This together with the expansion of the virtual workplace, and the growth of freelancing work and ecommerce are already driving significant shifts in demand for many commodities. Understanding and predicting such demand shifts can be very tricky but is absolutely critical for succeeding in 2021 and beyond. In the energy sector for example, the transformation in end user demand already drove profound shocks in the industry in 2020 as discussed in our article about energy demand transition. When combined with an expedited energy transition, demand shifts can change the landscape for oil and gas players indefinitely.

The airline and hospitality industries had already seen first order impacts from this dynamic in earlier years. Customers not only have access to information about their choices, but also have access to technologies that allow them to connect with family, friends, customers, and business associates without having to travel. Of course, these industries have been even more dramatically impacted throughout the COVID crisis.

5. The Humanization of Human Resources

Having been reinforced by the COVID experience, the overall wellbeing of employees is gaining importance as a driver of talent attraction, retention, and engagement. Pressure is mounting on leaders to demonstrate compassion and trust and approach their people as holistic human being, prioritizing their mental and physical health and family lives. As I discussed in another earlier article, there is near consensus that the leader of the future will only succeed if they consider employee fulfillment and purpose foundational to their people policies and strategies.

Now what?

Many of the events of 2020 were harsh for sure. But we were taught that it would not be impossible to grow and even win in this environment. The uncertainties that continue to materialize so rapidly before us present not only new challenges but also new opportunities. Success now requires new strategies that understand how each of the themes discussed here impact the overall business climate including customers and prospects, competition, and current and prospective employees.

Contact us to learn more about how we partner with executives to revisit their strategies and develop resilient leadership teams for winning during a historical juncture in human history.

What has the April 2020 experiment told us about the energy DEMAND transition?

Last year in September, we wrote an article on the challenge of meeting aggressive environmental goals while ignoring the demand side of the energy equation. Energy transition and climate change policy and investment initiatives had thus far been focused on reducing our reliance on fossil fuels in energy supply to control carbon dioxide (CO2) emissions. But our relentlessly growing consumption of energy across the globe had made meeting aggressive emission reduction targets near impossible. The COVID-induced reduction in energy demand has more than demonstrated the significance of demand in realizing aggressive emission reduction targets. In its early days, COVID19 successfully delivered an energy transitions experiment, proving that these goals are only attainable through transitions in not only energy supply but also energy demand.

A quick analysis of the EIA July 2020 Monthly Energy Review reveals some key insights about the fast arriving transformed future that are critical for energy industry leaders and policymakers to consider when making strategic choices. In April 2020, the U.S. went through a somewhat effective energy transitions experiment. The outcomes have clearly been far from pleasant for the industry. But they offer some important insights about what it takes to for energy transitions and related climate change goals to be met and how they will affect fundamentals for players along the supply chain of the energy industry.

Sustainability and Climate Action Plans that Don’t Address Demand Growth are Just Plans

In April 2020, the U.S. energy industry saw the most meaningful reduction in its monthly carbon dioxide emissions in over five decades. CO2 emissions from energy consumption were about 8% lower than in June 1982- the lowest monthly emission level since January 1973. Many have rushed to thank recent innovations and investments in renewable energy technologies for the acceleration of energy transitions. But renewable energy production in April was actually lower than its monthly average over the last three years. Total primary energy consumption, on the other hand, dropped to levels not seen since September 1989 suggesting that demand contraction was the major driver behind the reduction in emissions.

The Sectoral Transition in Energy Demand is Pacing Up

COVID19 lockdowns, stay-home orders, and social distancing guidelines this year restricted human mobility to levels probably not seen in several decades. Fortunately, the digital transformation had delivered technologies that are making business continuity and social connections still largely possible. We now rely on technology much more expansively to engage socially, run businesses, and buy and sell everything and anything from home. This translated into much larger consumption declines in the transport, industrial, and commercial sectors compared with the electricity and residential sectors.

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In April 2020, the residential and electricity sectors represented a total of 46% of primary energy consumption versus 41% last year. As productivity and performance concerns around remote working and virtual meetings get addressed, it is unlikely that we will ever return to our previous norms of travel by air, sea, or land. The COVID19 experience has inspired leaders to think differently about resource allocation. Many major tech companies have extended their remote working policy until next summer and some announced that employees will now have the choice to work remotely indefinitely. This means that the energy demand transition from the commercial and industrial sectors to the residential sector, and from transport to electricity could continue even post COVID19. This trend could only get multiplied as a result of the transition of consumption from oil to electricity with the proliferation of electric vehicles. As a result, oil consumption may never return to its pre-COVID19 levels which suggests that “peak oil” may already be behind us.

The Role of Natural Gas as a Bridging Fuel Cannot be Ignored

It will take some time before we have fully figured out ways to manage our energy appetite, de-link economic growth and energy demand growth, or further expedite investments and innovation in renewable and storage technologies. The recent blackouts of a struggling electric system in California demonstrate why natural gas generation will still be important at least until sufficient storage capacity is in place to mitigate the intermittency of zero carbon generation and maintain reliable operations.

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In April 2020, when U.S. carbon emissions from energy consumption hit historic lows, natural gas consumption actually rose by 2% compared with April 2019 while consumption of all other sources (including renewable energy) declined. This was driven by the sectoral energy demand shifts described above: transport to electricity, and commercial to residential. Also, new efficient gas-fired electric generation continues to displace coal-fired generation. As a result, our energy consumption mix saw a larger contribution of natural gas compared to 2019 at the expense of petroleum and coal. This trend may not be indicative of the eventual destination of energy transitions but of the path to get there.

And Finally Understanding and Predicting Demand under Different Scenarios is Imperative for Success

It is unfair to argue that anyone could have predicted something of the nature and scale of the COVID19 crisis and its implications on the energy demand transition. But forming alternative views on the demand dynamics expedited by COVID19 was not out of reach, because they had been evolving for some time. Digital technologies had been enabling businesses, employees, and customers in new ways for some time. Sustainability and climate change goals had been getting more aggressive, and investment in related technologies had been pacing up for a couple of decades. And the abundance of cheap natural gas resources in the U.S. has positioned it for its temporary bridging role some time ago.

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As has been evidenced thus far this year, and especially in April, the progress made on energy transitions and the digital transformation increases the energy industry’s vulnerability to demand uncertainties- especially for oil and gas players. There are multiple sub-regional and global dimensions that we haven’t discussed here but will remain highly relevant and volatile. The ability to formulate and embed various energy demand scenarios into top level/big picture decision making will differentiate the winners not only in the long-term, but also in the short and medium terms as experienced this year already.

The April 2020 experiment, while painful from an economic and public health point of view, was a nice joined up energy supply and demand case study on what it takes to achieve aggressive carbon emission reduction goals. And regardless of our position on the science of climate change, as industry leaders we would all benefit from understanding demand transition dynamics and their implications on our business.

Contact us to discuss how we can partner to better understand transformational trends in your industry and strategize for evolving leadership within your organization to ensure winning in disrupted reality.

Transformational Leadership: Top 5 Traits and Top 5 Limiting Mindsets

This decade is already proving to be much more intimidating to the status quo than the previous three or four decades at least. And disruptive forces are challenging leaders in new ways across different industries. In the energy industry for example we are having to navigate three major transformations concurrently: the energy transition, the digital revolution, and diversity and inclusion (D&I). Environment, social, and governance (ESG) are top on the agendas of major industry players globally. Much of this has been expedited by this year’s events, especially the COVID19 outbreak and the growing concern about racial divide issues.

Building our transformational leadership muscle is now a ‘must have’ for those who are looking to pivot their businesses for wining in a disrupted reality. Leaders that had already aligned their overall visions with the digital revolution have been better able to run operations more effectively and efficiently during lock-downs. The resultant relatively safe and stable experiences for employees and customers in turn translated to favorable financial outcomes. Likewise, leaders that had already developed strong D&I brands for their organizations had better chances of avoiding the negative implications of perceptions about their bias on their sales and financials. And, oil and gas industry leaders that had already pushed their energy transitions/ESG visions forward probably felt more optimistic about the future of their organizations in the face of the recent oil price shocks.

But what does it take to excel as a transformational leader? And what traditional mindsets block the realization of transformational visions?

Top Transformational Leader Traits

Throughout my experiences in patterning with transformational leaders, I have observed that those who are able to excel in orchestrating major organizational shifts share five traits:

  1. Influential and engaging. Transformational leaders understand very well that they can’t go it alone. Their success hinges on their ability to engage stakeholders around common visions and well aligned strategic roadmaps. This may require a different balance between command-and-control and collaborative leadership styles compared with what worked in the past. In addition to securing buy-in and commitment to the vision, an effective stakeholder engagement approach establishes a safe environment for feedback solicitation, and innovative idea generation.
  2. Perceptive and insightful. Transformational leaders are insightful observers of events and developments within their businesses, industry sectors, and the wider economy. They tend to be highly talented in connecting the dots, realizing trends and identifying opportunities prior to others. They don’t have to be subject matter experts (SMEs) themselves but they know how to engage SMEs and translate their analyses and opinions into commercially relevant insights and drive results accordingly.
  3. Adaptive visionary. While being visionary is a valuable leadership trait in general, leading through transformations calls for a different type of visionary, the adaptive visionary. The adaptive visionary makes it a habit to check their vision against major internal and external developments as well as the views of experts and thought leaders within and outside their organizations. The highly disruptive nature of our times calls for dynamic rather than static visions and supportive strategies. The adaptive visionary is able to imagine and re-imagine the future under different likely scenarios as soon as early signposts emerge or are brought to their attention.
  4. Commerciallydriven. Many major projects and organizational change efforts end up running above budgets and schedules. I am sure some of us feel that most if not all transformational initiatives miss their deadlines and exceed their budgets. They may also place pressure on the financial performance of the organization’s core business by leaning on its resources. Keeping an eye on the commercial priorities of the core business is top on the transformational leader’s list. In addition, understanding and managing the direct commercial outcomes of the organizational change under different potential constructs of the future is foundational for their success. This includes adopting solid approaches to identify, quantify, and mitigate risks in the short-term let alone the long-term.
  5. Strategic risk taker. Massive transformative disruptions naturally bring new and completely unimaginable risks, some of which are actually hidden opportunities. Winning takes leaders who are not only proficient in identifying and navigating risks but also make some bold strategic choices. They understand that the risk of inaction can be much higher than the risk of action in disrupted world. Strategic risk taking at the top is also important for inspiring a culture of creativity and innovation across the organization.

Regardless of the scale of the disruption and the nature of the journey, my clients and I find ourselves leaning more on these traits as we partner on leading successful transformations. Pivoting into new modes of growth takes a dynamic approach to balancing these five traits, while constantly prioritizing effective stakeholder engagement and teamwork. I hope this is not a surprise!

Top Leadership Mindsets that Block Transformations

Over the last decade, I have had many opportunities to partner with leaders on achieving their ambitions to pivot their businesses into growth in a disrupted industry. This included supporting energy transitions visions, evolving analytics to elevate an organization’s brand along its value chain, and redesigning structures and roles to prepare for major transformations. Throughout my experiences I have identified five legacy leader mindsets that tend to block transformative efforts:

  1. Direct returns-based assessment of new initiatives. In many instances, leaders find themselves working too hard to protect the successes of the past. This mindset only considers the direct revenues of new initiatives and ignores highly likely risks to core business revenues as the wider economy transitions away. It also ignores other opportunity costs associated with unfavorable transformation outcomes for conservative leaders compared to bolder competitors. Being outpaced by competition is one of the easiest ways to to hurt your brand and your core business results.
  2. Deterministic leadership cultures. This is somewhat linked to the first mindset. In an industry that had historically been lucrative like O&G for example, a deterministic mindset that assumes the continuation of past trends could easily become the norm. As major transformations unfold, long-term trends are constantly disrupted. Deterministic mindsets can lead to the handling of disruptions as short-term inconveniences rather than lasting shifts. This can easily result in facing the risks of a transformation without sufficient preparation and missing out on its biggest opportunities.
  3. Traditional competitive assessment. When I ask leaders about the competitors to consider when re-envisioning their future, they mostly list their past competitors. In most of the cases and after a little bit of digging, my clients and I find some big surprises. Traditionally, their competitors were entities that provided similar produce and services to theirs. During major disruptions, most players are transforming their businesses and customer mindsets are changing so rapidly. New competitors emerge, potentially doing very different things but customers could easily be putting them side by side with some traditional offerings for picking a winner. Understanding who competes for your customer’s attention during a major transformation is paramount to success.
  4. Job description orientation. This mindset is common among leaders with a track record in climbing the corporate ladder and typically aspiring for the next move up. During transformations, they struggle with the lack of clarity and their struggles become contagious across their teams . This is a first for us all! And no job description or annual objectives will spell out what it takes to come out on the winning side of the energy transition, digital transformation, D&I transformation, or even the COVID19 disruption. Regardless of the size of your team or business function, leaders could benefit from finding ways to thrive in uncertainty while staying aligned with overall corporate visions and values. Limiting your own imagination and creativity will only limit creativity and innovation within your team.
  5. And the winner is the silo mindset. This is perhaps one of the most common barriers to any organizational change effort. The ‘what’s in it for me or my team’ foundation for decision making and resource investment can therefore be extremely limiting. The transformations reshaping the future of humanity today are all intertwined, inter-disciplinary, cross-sectoral, global in scope and extremely large in scale. Leadership teams will float together or sink together. The desire to stick to traditional product or service definitions, organizational structures, and team boundaries is an implicit decision to struggle throughout the transformation and remain a follower of transformational leaders rather than one of them.

There are other mindsets that tend to block transformational breakthroughs. And like the five most common ones they are mostly related to the human tendency to stick to tried and tested methods. Consistently staying the course has its merits during more stable times. But when we are trying to chart a new path the balance will need to be tilted toward creativity, innovation, flexibility, compassion, and alignment.

Contact us to learn more about how we partner with executives to build their transformational leadership muscle and identify and make the necessary mindset shifts.