Part of Grid Network »

The Grid Professionals Group covers electric current from its transmission step down to each customer's home. 

Post

Pandemic Unleashes Utilities’ Potential

image credit: Photo 31570586 © Shutter999 | Dreamstime.com
Paul Korzeniowski's picture
B2B Content producer Self-employed

Paul is a seasoned (basically old) freelance B2B content producer. Through the years, he has written more than 10,000 items (blogs, news stories, white papers, case studies, press releases and...

  • Member since 2011
  • 1,436 items added with 489,579 views
  • Mar 8, 2022
  • 352 views

“Out of adversity comes opportunity,” said Ben Franklin. The pandemic created the most significant challenges that energy companies ever faced. Today’s utility management teams need to heed Franklin’s advice in order to position their companies for success in the future, according to EY.

The COVID-19 pandemic dramatically reshaped CEO agendas. Before it, many energy companies slowly and cautiously responded to new imperatives. That is no longer an option. The pandemic shrunk life cycles, reshaped business processes, and increased competition. Consequently, the trajectories of thriving and surviving companies are diverging rapidly.

The Road to Success

The path to strength may seem counter intuitive: utilities need to invest more during these turbulent times. The health care crisis shifted transformation from an important consideration to an urgent one. Sometimes because they had no other choice, utilities invested in new technology, like cloud, mobile, and social networking, and quickly updated inefficient legacy business processes to modern, digital, frictionless interactions. The differences between the two are becoming more pronounced and more important to corporate vitality.

Over half (58%) of thrivers accelerated their existing transformation in response to the pandemic. As a result, they are already pursuing a growth agenda, which will help their organizations in the future. They are betting that technology will provide them with a strong foundation: 61% plan to undertake a major new transformation initiative and 68% plan a major investment in data and technology. These CEOs also plan to spend more on transformation over the next three years.

A Change in Thinking

In addition, their rationale for investing in such projects has changed. These investments are not going to be offset by cost reductions for the most part, with nearly half citing investor support in these initiatives even it diminishes their near-term financial performance.

In addition, CEOs are shaking up the human dimensions of their enterprises, such as talent, leadership, organizational structure, and culture and purpose. The majority of thrivers (68%) have at least one people-related transformation priority, and 15% have two or more people priorities. These programs emphasize improving employees’ skill sets, improving collaboration, and creating more decisive mindsets.

In contrast, most survivors (54%) slowed their existing transformation priorities and focused on cost reduction. Where thrivers are moving quickly ahead, survivors are still retooling, a process that will put them in danger of falling behind market trends and possibly reaching obsolescence.

The result is a significant difference in future outlooks among utilities. The paths of thrivers and survivors should diverge even further in the future: 79% of thrivers are projecting growth in three years; only 7% of survivors are. As a result, the survivors’ future is murky.

The pandemic forced a quick and dramatic transformation for energy companies, one that divided them into camps. Those utilities that embraced digital transformation are set up for success in the future; those that did not will realize less growth and perhaps imperil the business. Consequently, the onus is now on management to ensure that their organization moves to the former category and not the latter.

 

Paul Korzeniowski's picture
Thank Paul for the Post!
Energy Central contributors share their experience and insights for the benefit of other Members (like you). Please show them your appreciation by leaving a comment, 'liking' this post, or following this Member.
More posts from this member
Discussions
Spell checking: Press the CTRL or COMMAND key then click on the underlined misspelled word.

No discussions yet. Start a discussion below.

Get Published - Build a Following

The Energy Central Power Industry Network is based on one core idea - power industry professionals helping each other and advancing the industry by sharing and learning from each other.

If you have an experience or insight to share or have learned something from a conference or seminar, your peers and colleagues on Energy Central want to hear about it. It's also easy to share a link to an article you've liked or an industry resource that you think would be helpful.

                 Learn more about posting on Energy Central »