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Nuclear Revolution

How to ease the coming upheaval in the nuclear power industry.

Fortnightly Magazine - July 2008

The U.S. nuclear power industry is caught in a vise. On the one hand, the industry stands on the brink of a great resurgence. The need to reduce carbon emissions has made clean nuclear energy an attractive option; the Energy Policy Act of 2005 included a number of incentives for the industry; and approximately 30 applications for reactor units are expected to be filed with the Nuclear Regulatory Commission by the end of 2009.

On the other hand, just as the industry prepares to expand dramatically over the next decade, it faces a yawning talent gap. A 2005 study by the Nuclear Energy Institute found that half of the industry’s employees are over 47 years old, and more than a quarter of nuclear workers already are eligible to stop working. Meanwhile, as the baby boomers retire, there will be far fewer available replacements with nuclear knowledge.

Given these demographics and the resurgence of nuclear power, executives will pursue a number of different strategies to bridge the coming talent gap. Some of those strategies entail seeking leaders from largely unfamiliar sources both inside and outside the industry—leaders who bring with them different leadership styles. In any organization, a new leadership model has profound implications for the company culture. Call it “revolution from the top.”

Companies that fail to recognize this revolution’s potential to disrupt the organization, as well as the opportunities that such culture change offers, risk impeding their progress precisely at a time of enormous expansion. But by understanding the threats and advantages associated with each potential source of new leadership, companies can begin preparing now to absorb the inevitable culture shockwave and make the most of their new leaders’ promise. More specifically, they can adopt some proven approaches to acquiring and assimilating new leaders. These best practices significantly can reduce the risks involved with tapping unfamiliar sources of talent, help the new leader achieve a soft landing, and minimize destructive cultural disruptions while enabling needed culture change.

New Leadership Sources

There are four strategies—with accompanying cultural implications—that nuclear power companies are likely to pursue to compensate for the coming dearth of talent. These strategies are: looking internationally; buying talent through mergers and acquisitions; promoting talented young insiders; and bringing talent from outside the industry.

U.S. utilities might go abroad to find seasoned leadership in countries that have extensive experience with nuclear power. The European Union has a total of 147 reactors in operation. Among the EU countries, 59 of those reactors are in France, which relies on nuclear power for 80 percent of its energy. Twenty-three reactors are in operation in the United Kingdom, and 18 in Germany. Outside the European Union, significant experience is found in Japan with 55 units,

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