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Strategic Leadership

Get ready for fundamental changes.

Fortnightly Magazine - May 2010

In almost all business and non-profit environments, change is occurring at an accelerating pace. In the electric industry—which used to be stable—we are seeing major changes too. Utilities face growing ambiguity as well as increasing paces of change, uncertainty and complexity. As Irene Sanders stated in Strategic Thinking and the New Science , “[t]hat the future will be different from today is given. What we struggle with is our desire to know how it will be different and what we can do to influence it.” 1

For organizations, strategic leadership is defined as enhancing an organization’s sustainable competitive advantage or enduring success. 2 Strategic leaders must first understand change before it occurs. When change comes as a surprise, it takes enormous energy and resources to identify and implement an effective response. Surprise changes also create some huge disconnections throughout an organization. What’s needed by strategic leaders is foresight. As Sanders states, “[f]oresight is the ability to see what is emerging—to understand the dynamics of the larger context and to recognize new, initial conditions as they are forming. With foresight, we see the future as it is taking shape.” Strategic leaders have the ability to influence the future by responding to, and influencing, what’s emerging.

What key trends will the electric utility industry see during the next five to 10 years? The answer is that we can expect many changes and challenges in workforce and talent acquisition, energy supply, customer needs, globalization and organizational focus.

Talent Acquisition

Utility executives already know that more than 50 percent of the industry’s workforce likely will retire in the next 10 years. This goes along with 46 million baby boomers in the United States retiring in the next 20 years. Unless companies take action, these workers will leave and take with them their collective experience, wisdom and knowledge. Futurist and consultant James Canton suggests making a serious commitment to using technology and mentoring programs to capture the wealth of wisdom in these retiring baby boomers. 3

Talent—skilled, innovative, high-technology savvy people, irrespective of nationality—will be the lifeblood of every organization. Talent will become the most important strategic asset. Finding that talent will become more difficult as many utilities already are experiencing that problem. In the United States, talent shortages will be worst among managers and skilled people in technology, science and other innovation and service jobs. Already there’s a shortage of electrical engineers. Canton predicts the biggest challenge will be finding high-tech, skilled people from a global talent pool. Employers will find it necessary to go outside the United States to find the right workers, unless immigration doors open.

Strategic leaders in the utility industry will assess their entire work force to see where talent shortages will emerge. They will determine what innovations will drive businesses in the future, and will make plans to secure the needed, talented people. That includes stepping up efforts to work with universities to ensure they’re offering the needed programs and attracting

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