The corporate energy manager’s role is changing beyond being expected to deliver breakthrough energy cost reductions. They also must be knowledgeable on a range of volatile risks and their effects on markets and operations throughout the world. They need to be up to date on a range of rapidly developing energy. All this must be tied together in effective short-, medium- and long-term energy plans.
Energy management is sometimes broadened to include sustainability, a phrase too often vaguely defined in terms of scope and depth. Interaction with customers, directors, investors, employees and other stakeholders is increasingly demanded. Companies realize the need to establish the role of a fully empowered energy manager and seek candidates to fill it. This has pitfalls that can jeopardize success.
Before the personnel search begins, some basic characteristics need to be defined. To be effective, the corporate energy manager must engage most company departments, including finance, manufacturing, engineering, marketing, government relations, and environmental health and safety to develop and execute breakthrough energy strategies. The role also will interact with a range of outside stakeholders. The position clearly needs the endorsement of the CEO and staff.
An appropriate reporting structure is the first challenge. If the role is to be the strategic one outlined so far, it should report either to the CEO or a direct report, and be positioned to lead the energy strategy from technology, efficiency, environmental and economic standpoints. This is recognized in theory, but practice often is very different. Companies struggle with overcoming decades of conditioning that energy management is mainly focused on voluntary efficiency programs, is predominantly technical and has little to do with energy purchasing, environmental risks and choices of manufacturing technologies. The resulting organizational placement is at odds with the expected scope, limiting potential for success.[pullquote]
The next challenge is finalizing the job description. As the understanding of the true scope emerges, its potential to affect deeply the way many departments operate becomes clearer. The fear of loss of autonomy, also known as protecting turf, tends to dilute the position’s authority and accountability. This might result in a position description with high levels of new strategic accountability, but it leaves the final decisions firmly with the existing company power structure. This further limits the possibility for success.
The choice of reporting line and degree of authority ultimately influence the recruiting profile, salary range and future career prospects. This inevitably means the pool of candidates will be the traditional, technically oriented energy managers, whose expertise often is more suited to delivering voluntary efficiency programs effectively than to redefining the corporation’s long-term relationship with every aspect of energy use, supply and environmental impacts. This leads to a self-fulfilling prophecy: the position’s status, remuneration and authority define the recruiting pool, and the pool ultimately defines the role as looking more like the past than the future. Using organizational benchmarking can help reduce this risk. A qualified recruiting consultant can be valuable in keeping the company aligned firmly with the position’s transformational nature.
Even companies that recognize the role’s new demands often come up dry. This is hardly surprising. An effective energy manager is, by definition, a highly professional generalist, able to integrate the operational, economic, environmental, social and regulatory aspects of energy now and into the future. The energy manager also will have the management skills needed to operate credibly at the highest level in the company and elsewhere. This profile isn’t one that has been developed traditionally either by our academic institutions or traditional career paths.
Energy education generally is specialized, with a strong technical focus that rarely encompasses investment planning and operating risks. While there are some curriculum changes in the recent past, most education around energy is narrowly focused and doesn’t encourage a wider systemic view of energy. It’s relatively easy to find expertise in the components of the energy system, but hard to find the candidate with both an integrated view and appropriate career experience.
Faced with this reality, often the best choice is an existing internal leader having appropriate managerial skills and credibility at every company level. While not ideal, this might be someone not currently working in an energy-related field, an aspect that might not always go down well with existing staff. Given the strategic scope of these positions, the need to backfill focused skills will be needed anyway. In the absence of a strong internal candidate, external recruiting focusing on senior level skills and credibility will be the way to go, supplemented as needed by team skills and structure. In either case, the senior-level positioning and accountability will vastly increase the pool of suitable candidates.
Done right, this is a role that can change the competitive balance for a company. It’s time to get serious about the recruiting and career development process.
Peter Garforth is principal of Garforth International LLC, Toledo, Ohio. He can be reached at [email protected].