The energy sector is currently going through one of its most turbulent and transformational times. The “Energy Crisis” has become a news bulletin staple and remains one of today’s major challenges.
Change in the energy sector has been relentless. Companies have been forced to react to an increasing number of challenges:
- Compliance with new regulations
- Increased customer concerns and demands
- Swiftly meeting price caps and pricing guarantee schemes
- Supporting the drive to Net Zero and transforming operations to become more sustainable.
Each of these challenges will have a human impact on how employees work (e.g. change to processes, new skills required etc.), so the willingness and ability of people to change is a key driver in landing change quickly.
So, how can organisations in the sector embrace the volume, complexity, and abruptness of today’s turbulent times in a more structured way?
Change becoming constant
Change is not unique to the energy sector. Every industry has had to adapt in recent years due to external factors such as the Covid-19 pandemic, and varying customer demands, whilst delivering huge internal transformation programmes themselves to remain competitive. These programmes vary in nature, but many of our clients invested in new operating models, launched new customer products & services or digitalised their internal systems and customer channels.
The energy sector, however, has had to deal with one of the highest levels of regulatory change – change that has been forced upon them. While other sectors can focus on their non-regulated change programmes to develop their business, the energy sector has been required to prioritise the implementation of mandated change.
For larger organisations, transformation can be more challenging, with legacy systems, workforces that need to be retrained and new skillsets required from engineering-type organisations. Smaller or ‘challenger’-type organisations are more agile, thus able to embrace change more quickly, using newer systems and with a less cumbersome structure, enabling them to make decisions and act faster.
The main challenge facing all energy organisations is how to deal with the pace of change – they simply can’t slow down and need to keep up with a fast-evolving world!
Trends in the Energy & Utilities sector
Working closely with our clients in the Energy & Utilities sector, we witness first-hand how the industry is adapting and transforming every day. Here are some key trends we see impacting organisations:
Change fatigue
With current market pressures, change and adaptation is being forced on companies at an ever-increasing regularity, with little ‘quiet-time’. People often feel fatigued.
Volume of regulatory change
Abrupt regulatory change, for example the Energy Price Guarantee Scheme and Energy Bills Support Scheme, are forcing organisations to act quickly. This, combined with increasing customer vulnerability and the significant rise in the cost of living, is placing further pressures on organisations to react and support their customers.
The impact on ‘people’
With increasingly diverse and multi-generational workforces, organisations need to ensure all employees are prepared for, and adaptable to, change.
Focus on the consumer and vulnerability
Suppliers are expected to do more to help, but their profit margins are not increasing.
The huge value of adequate change management
Change management is defined by PROSCI, a global leader in change management practices, as “The application of the structured process and set of tools for leading the people side of change to achieve a desired outcome”. Change management is more than just ‘comms’ – it requires a structured, but flexible and tailorable approach to support individuals through a period of complex transformation, so they can transition from their current state to their desired future state.
The organisations who invest in change management see higher returns on investment (ROI) and increased employee engagement not by imposing, but by creating a desire to change in their workforce. PROSCI’s Best practices in change management research consistently shows that initiatives with excellent change management are six times more likely to meet objectives than those with poor change management.
By ensuring change impacts are assessed, interventions can be deployed to arm people with the knowledge and ability to change, and resistance to change can be better managed. Trialling new interventions, refreshening approaches, and tailoring for the audience can limit the impact of change fatigue. Put simply; investing in a structured change approach means desired outcomes are more likely to be met.