The boom in the energy sector has injected excitement and opportunity into companies across the industry. We convened a panel of sector leaders during our annual Energy CEO & Board Breakfast to discuss the energy transition, the role of AI, succession planning and talent development, and the importance of feedback for CEOs. Here are the highlights of the discussion.
Maintaining a Long-term Outlook Amid Uncertainty
Energy is a long-cycle business, and decisions need to be based on a long-term strategy. CEOs emphasized the importance of not getting distracted by day-to-day “noise” and focusing on long-term fundamentals such as global population growth, economic development, and energy demand trends. "We need to challenge ourselves and to make sure that we don't get too caught up in groupthink or the events of the moment," a panelist emphasized. “Think about what is going to happen in 20 to 30 years’ time.”
Another leader shared that taking a long-term view has been crucial in rallying the organization behind the hydrogen and clean energy initiatives. The CEO emphasized that achieving these goals requires time and a steadfast approach, as there are no quick fixes. By laying out a bold vision and maintaining focus amidst industry fluctuations, the company is successfully executing its strategy, ensuring a secure and sustainable future in the hydrogen sector.
In addition to a long-term orientation, panelists noted the importance of staying true to your organization’s mission and values as your north star, especially with the widening geopolitical divides across the globe. “I feel a bit like we’re in the first Star Wars movie with Luke Skywalker in the final scene. Things are blowing up, and you need to use the force and stay on target,” one CEO explained. “I can't do anything about the things blowing up in different places, but I can stay focused on our mission and our values."
Another panelist added, “We have to remind our people, our boards and ourselves that we are not countries, and we are not political parties,” a CEO emphasized. “We have fiduciary responsibility to our shareholders and our customers and our employees, and it's pretty easy to get lost with that these days.”
Feedback for CEOs: Cultivating a Culture of Transparency and Trust
Receiving and acting on feedback is crucial for effective leadership. The panelists shared their strategies for gathering feedback and fostering a culture of transparency and trust within their organizations. "During a leadership program, I once asked how a CEO gets true 360-degree feedback. And the answer is that you don’t. You're always getting a biased view, whether it's from the board or the management team,” a panelist shared. “For me, it's crucial to get close to the organization and focus on creating a culture where people feel safe to challenge you with different opinions.”
Others agreed, with one executive adding, "Spending time at the front line is a great place to get direct, unfiltered views on how the company is tracking.” This hands-on approach helps leaders stay connected with their teams and understand the challenges they face.
Another leader emphasized the importance of creating an environment of psychological safety for employees to share their thoughts and concerns. "If people feel safe and believe they can challenge you, then you're going to hear valuable information," they explained.
The panelists also discussed the role of external feedback mechanisms, such as board members and industry peers. "Having a small network of trusted advisors who are not involved in your future plans can provide sharp and valuable feedback," one executive shared. This external perspective helps leaders gain insights that may not be apparent from within the organization.
The Role of AI: Driving Innovation and Efficiency
Artificial Intelligence is revolutionizing industries, and the energy sector is no exception. The panelists discussed how AI is being leveraged to improve decision-making, enhance safety, and drive operational efficiency. "We are trying to put all digital solutions, including AI, into a human-centric approach to make better decisions regarding safety and maintenance," one executive shared.
The integration of AI into business processes also brings ethical considerations to the forefront. "There are ethical issues to consider, such as whether to disclose the use of AI in customer interactions," another leader pointed out. These considerations are crucial for maintaining trust and transparency with stakeholders.
Moreover, AI is seen as a tool for enhancing productivity and innovation. "We've challenged our team to be 10% more efficient using AI," an executive said. “We've got a small team with a sandbox where we encourage them to experiment on what we could do from a safety and operational standpoint to work better and smarter."
It’s also essential to offer employees the opportunity to upskill to fully leverage the emerging opportunities. "There is a huge amount of excitement within the organization, and we want to ensure this excitement translates into opportunities for upskilling,” a panelist shared. “We run a program focused on digital and AI, empowering our employees to explore areas of interest. About a quarter of our team has already gone through this process. This approach is helping our employees get better equipped and apply their new skills to their work, resulting in significant benefits for the organization."
Succession Planning: Building the Next Generation of Leaders
Succession planning emerged as a pivotal theme during the discussion. One executive emphasized the importance of identifying talent early in their careers to ensure they receive the necessary experiences to be competitive for executive roles. "It's crucial to give potential leaders exposure across the breadth of the business," they noted. This approach not only prepares individuals for future leadership positions but also ensures that the organization has a robust pipeline of talent ready to step up when needed.
Another CEO added that it is also important to evaluate carefully what the most fitting paths of exposure may be for future chief executives. “Our company is changing, and maybe the way I was brought up in the company is not the right way for the next candidate. Maybe the next candidate needs to be exposed to different experiences to ensure that they will succeed in the new environment.”
The panel also stressed the idea that future CEO candidates need to really want the job, especially as it is a 24/7 effort and will impact not just them but their families as well. But they added that this total investment of self brings with it tremendous possibilities to make a real and lasting impact. “There are so few opportunities like this, where you have the ability to take the pen and change the future of a company or an industry," a panelist shared.
Holding the CEO Accountable as a Board Member
The discussion shifted toward the importance of board members and their role in supporting CEOs while holding them accountable. One executive emphasized the value of having diverse experiences among board members, noting how insights from different industries can help think about risks differently. They highlighted the need for board members to challenge the organization and share their backgrounds to contribute effectively.
Another leader shared their perspective on CEO accountability, emphasizing the necessity of clear, objective goals and quantifiable results. They remarked, "Only your mother cares about the reasons; everybody else cares about the results."
Embracing Change and Leading with Vision
The insights shared by the panelists underscore the importance of adaptability, innovation, and strategic resilience in navigating the complexities of the modern business environment. By focusing on succession planning, leveraging AI, driving the energy transition, and fostering a culture of transparency and trust, industry leaders can position their organizations for long-term success. As one executive aptly put it, "We are the architects of the future of our companies and industries. It's a fabulous job, and we must embrace the opportunities and challenges that come with it."
