Leadership Matters

Perspectives on the key issues impacting senior leaders and their organizations
January 28, 2021

Making Professional Sense of Today’s Energy Reality

News flash: The energy transition is underway! While this is not really a surprise, it is a reality today, and leaders in the energy industry must account for its widespread implications. In markets across the globe — for example in Houston, where I'm based, 30 percent of the local economy is related to the oil and gas industry — the effect is palpable. On one hand are political, environmental and financial headwinds unlike any other time for the traditional oil and gas industry; on the other hand is a continuing and accelerating shift to the use of cleaner, predominantly renewable sources of energy that are attracting investment at major scale.

The most common question we hear today from board directors and managers in the energy industry as they confront this environment is, “How can I professionally grow as the oil and gas industry’s challenges continue growing?” Below we look at three answers to this question.

  1. Embrace the future.

    Accept reality: embrace energy’s future for what it is. First of all, fossil fuels are not going away quickly. Even as noncarbon energy increases as a portion of the energy supply, IHS Markit estimates that these sources will still only make up 12.6 percent of the energy market by 2030. That said, the push for new energies is a responsible step, if nothing else than for diversification’s sake. Just as the U.S. onshore sector experienced extraordinary interest and investment that led to fast growth and innovation during the shale revolution, the green economy is having its day now. Proceed with caution, yes, but proceed nonetheless. The technological and infrastructure developments being spawned by today’s era will be with us for generations to come.

  2. Expand your knowledge.

    Find the common areas between what you do know and do not know. For example, environmental, social and governance (ESG) is a hot topic across the economy, and energy is no stranger to its wide-ranging effects. If you are a leader looking for “white space,” being up to speed on these critical concepts can enable you to advance in the market you are serving — be it public or private.

  3. Create opportunities from crisis.

    Seek ways to differentiate or reinvent yourself. For example, if you are an executive with an engineering background and specifically skilled to work within the traditional energy value chain, then now is the time to double down on your natural curiosity and make some intentional decisions about career moves and transitions. Is this year to consider relocating for the right role? Perhaps. Is the directorship opportunity or P&L responsibility smaller than hoped? Maybe that’s okay, if it opens up more opportunities down the line. Can your existing skills be applied to an adjacent sector? Quite possibly. Questions like these are thought-starters for positioning yourself for future growth and market upside. Take some risks. Do not idle.

For energy, we believe that the next few years may feel a bit like the upheaval of 2020. Hydrocarbons will remain in the crosshairs, and renewables opportunities will continue to spread. Equip yourself with the right perspective to thrive in this reality.

Based in Houston, Chad recruits and advises leaders in the energy and technology industries.