I spent a half day last week with the CEO and senior management team of a large global energy company.
They engaged me to provide them with insight on the trends which will impact the global oil, natural gas, energy and distribution sectors in the years to come.
It was a small, intimate get-together with about 40 senior executives; I provided my insight into the trends that I believe will have the most impact. That was followed by about an hour of very intense, deep probing discussion; I obviously stirred up some creative thinking within the group.
While not going into the specifics, the broad brush strokes of what I covered off included my observations that they should be thinking about these issues.
- presume massive market disruption: Think GoogleCar: don’t limit your view of the future as to what might transpire. The future of any industry will likely bear no resemblance to the industry structure of today. Future competitors will probably come from completely outside of an existing industry. Challenge every assumption that you have about the future.
- prepare for significant transformation: realize that existing insurmountable challenges are simply a big opportunity to someone else. Someone, somewhere, is going to figure out how to plug hundreds of thousands if not millions of small, local, home based renewable energy sources into the energy grid. It’s mostly a computation/mathematical issue: the energy grid was not designed for two way electricity transmission, and so there will have to be an intense amount of computational dynamics to structure a solution. Result? An organization that is a master of massive computational capabilities — and hence, grid management — might very well be the new energy company of the future.
- find opportunity in scientific rapidity: we’re in the era of global collaborative knowledge generation, and R&D is rapidly externalizing. The infinite global idea loop means that scientific discovery is now happening faster than ever before, which provides for more product and market opportunity. Innovative organizations plug in, ensuring that all staff are in tune with the rapid rate of scientific advance that surrounds them, and are prepared to ride new emerging ideas as soon as they begin to emerge.
- capitalize on skills fragmentation: the war for talent will define future success. We’re entering a time of massive skills specialization and ever smaller knowledge niches. As I covered off in my keynote to a global financial audience in the Cayman’s, it’s the organizations that can build a culture, structure and flexibility to attract and retain skills that will find the key to success in the high velocity economy.
- structure for volatility: extreme volatility is the ‘new normal.’ If you have the capability to quickly adjust strategy, structure, plans, skills, projects and teams, you’ve got the right stuff for the new world of constant change.
- prepare for business intensity: innovative organizations plan for more rapid entrance and exits from new markets. They do so through flexible structure. Partnership takes on new role in era of exponentiating, fast complexity and the rapid emergence of new opportunities: if you can scale up, you can win big.
The Economist Intelligence Unit recently noted that “the ability to swiftly adapt to change represents the greatest challenge manufacturers face in creating long-term value.” That’s the bottom line for innovating in the high velocity energy industry.