Category : HR Business Synergy
sharmanalin@indianoil.in
Net Zero has become the buzzword in today’s VUCA world, with every major company announcing its Net Zero goals and trying to lead the energy transition. The Net Zero term itself is not new, with references being found as early as 1971, The term also found references in even the cartoons. The energy companies are at the forefront of this energy transition and have the onus to lead the world from polluting molecule-based energy systems towards low-carbon emission sources.
However, the path towards the energy transition is riddled with multiple problems, one of the critical ones being human resources and how to lead them through the journey of energy transition itself.
Cultivating leadership, utilizing frameworks, adopting Agile and investing in startups may be some of the methods to make the elephants dance.
The term “Net Zero” first came into general parlance in 2015 during the famed Paris Agreement, wherein it became a key goal in the climate negotiations. NetZero appears to be a phenomenon which has recently gained traction, but is it?
Running Google Ngram for the term “NetZero” results in startling results with the earliest reference to the term as early as 1971. On diving deeper, it is observed that the usage, however, was not linked with climate net zero. It was only by the 1980s that scientists and policymakers began discussing the need to balance emissions with carbon sinks to stabilize global temperatures. This laid the groundwork for the modern understanding of Net Zero.
With the foundation built, concepts of protecting Mother Earth, saving the environment and “NetZero” started getting mingled with the thought process, folklore and even the cartoons.
Almost every 90s kid who had access to Cartoon Network has in fact, watched the first-ever NetZero show aired – “Captain Planet”.
Even the intro song had a bit of NetZero in it:
Captain Planet, he’s a hero; gonna take pollution down to zero
More often than not, the folklore and cartoons actually depict the instantly prevalent mindset of humanity in general.
As per McKinsey and Company:
Net zero is an ideal state where the amount of greenhouse gases released into the Earth’s atmosphere is equal to the amount removed.
As per the United Nations:
Put simply, net zero means cutting carbon emissions to a small amount of residual emissions that can be absorbed and durably stored by nature and other carbon dioxide removal measures, leaving zero in the atmosphere.
Can the presence of carbon be this volatile for the atmosphere? Can it really change the core functioning of Mother Earth? Can the core building block of all the life and non-life forms also become the slow poison for its own creations?
What is a blessing in moderation can be a curse in excess
Very similar is the case with the current environment and the story behind the curse of carbon.
The great minds of Earth have indeed found a high correlation between the presence of CO2 and the impediments of Mother Earth – Enhanced Greenhouse effect, climate change, Ocean Acidification, and Disruption of the Ecosystem.
The most important metric to estimate the impact of excess carbon on the mother earth is the average temperature rise as compared to the pre-industrialization levels. Though there is a lot of variability associated with this unit in terms of its association and other parameters, however, it is important to note that 195 nations pledged to hold the Earth’s temperature to “well below 2 degrees Celsius above pre-industrial levels,” and going further, aim to “limit the temperature increase to 1.5 degrees Celsius above pre-industrial levels”, thereby adopting the matrix of measuring average temperature of Earth.
Subsequent to this, there was an enhanced push towards attaining carbon neutrality and making the artificial activities Net Zero in terms of carbon emissions.
However, things are not going as planned!!
In May 2023, the WMO[1] issued a report that projected a significant likelihood (66 per cent) that the world would exceed the 1.5 degrees Celsius threshold in the next four years. This breach would likely be driven by human-induced climate change, combined with a warming El Niño — a cyclical weather phenomenon that temporarily heats up ocean regions and pushes global temperatures higher.
To hold the planet’s long-term average temperature to below the 1.5-degree threshold, the world will have to reach net zero emissions by the year 2050, according to the Intergovernmental Panel on Climate Change (IPCC).
The storyline of Captain Planet revolves around 5 crucial elements identified to save the world – “Earth!” “fire!” “wind!” “water!” and “heart!”. In the storyline, 5 individuals owned one ring each giving them distinct control over one of these elements. The superhero – Captain Planet can be summoned only when each of these five individuals chooses to combine their powers to rescue Mother Earth.
While each of the elements has its own unique properties and importance in the storyline, the element of heart was the pivotal one which weaved each of the others together into a formidable being.
After the Paris 2015 accord, the entire world has come together to save mother earth, with large traditional organizations starting to transition into sustainable beings.
In the current sense, the power of the heart can be associated with the most important resource after time – the human resource.
It won’t be very wrong to state that almost all of the carbon emissions originate in the process of making energy. As per a recent UN Emissions Gap Report, 68% of CO2 emissions originate from the production of energy. The importance of this number is exemplified by the fact that fuel for energy generation is being sourced primarily from Coal as well as the Oil & Gas companies.
It hence becomes increasingly important for the key energy providers of the globe – the energy fuel providers to transition themselves and more importantly, lead the entire energy transition journey for the world.
The energy transition is not just a technological challenge but a people-centric transformation as well, wherein passion and possibilities are tasked with fuelling innovation and growth.
Human resources to a company is what software is to computers. No matter how much computational prowess you have cultivated, the entire thing becomes a complete waste if you do not have the proper software to operate it.
The challenge is further amplified when one has to operate in a VUCA environment, wherein the technology is volatile, the future is uncertain, the operating environment is complex, and the goals themselves are ambiguous.
The ability to handle the challenging VUCA environment is rare and as with all rare things – needed now and in large quantities!
But can the big and influential companies of the globe embrace the change? Do they even have the cultural and management bandwidth to embrace innovation?
IBM’s transformation from the verge of bankruptcy to becoming a leading force in the technology industry is a testament to the power of leadership, cultural renewal, and strategic reinvention. In the early 1990s, IBM faced significant financial difficulties, a declining market share, and an identity crisis as technology evolved faster than the company’s ability to adapt. However, through bold decisions and an unwavering focus on change, IBM not only survived but redefined its role in the industry.
Leadership was central to this transformation. The company recognized that incremental change was not enough; it required a fundamental shift in direction. By focusing on customer-centric solutions and pivoting away from its reliance on hardware, IBM invested heavily in software, services, and consulting. This shift represented a move from selling standalone products to offering integrated solutions tailored to client needs.
Equally critical was the emphasis on cultural transformation. IBM shifted its internal culture from hierarchical and bureaucratic to more agile and adaptive. The company focused on collaboration, innovation, and empowering employees to think and act beyond traditional roles. This cultural renewal fostered an environment where continuous learning, upskilling, and adaptability became central to IBM’s DNA, enabling the workforce to meet the demands of a rapidly changing industry landscape.
The traditional energy source has been molecule-based, wherein the companies typically scour the belly of Mother Earth to dig up the precious molecules which then undergo mechanical and chemical changes for releasing energy.
These molecules which are used for energy generation have the presence of huge amounts of carbon – in fact coal is a form of carbon itself and crude oil contains large chains of Carbon and Hydrogen. The combustion of these molecules releases a significant amount of carbon dioxide and mind you, here we are not taking into account the significant amounts of emissions associated with the very extraction of these molecules.
Just to give you a perspective, the emission profile of India’s electricity grid stood at 713.44 gCO2e/kWh of electricity, which is almost 1.5 times the world average of 481.46 gCO2e/kWh. Clean and developed countries such as Norway and Sweden have much cleaner grids with emission profiles lower than 50 gCO2e/kWh.
It is hence important for the energy suppliers of the world to undergo a significant shift in terms of their operating modalities. Such a monumental change for a company is not very easy. One can simply expense CAPEX to get the latest tech and toys, but where would they get the knowledge base and the mindset to operate them?
For organizations undergoing an energy transition, the lessons from IBM are highly relevant. The shift to sustainable energy sources and carbon-neutral operations requires not just technological upgrades but also a cultural and strategic overhaul. Success lies in a leadership that can articulate a compelling vision and foster an inclusive culture where employees are motivated and equipped to embrace change.
As with IBM, the energy sector’s transformation depends on its workforce’s ability to adapt and innovate. Reskilling, continuous development, and fostering new competencies are paramount. A people-centric approach to this transition, combined with leadership that prioritizes sustainability and strategic reinvention, can enable even the largest organizations to thrive in a low-carbon future. The energy transition is not just a challenge; it is an opportunity to build a more sustainable and innovative future.
Indeed, people are at the core of the energy transition and skilled, adaptable, and innovative employees are highly important in implementing green energy initiatives.
A. Agile Leadership & Mindset: For the uninitiated, “Agile” is a methodology and mindset for managing processes and projects and was created in 2001 by 17 software developers. ‘The Agile’ in the words of my Agile professor, “Agile is a mindset”!. The Agile manifesto is the foundational document of Agile and speaks about four core fundamental values of this methodology:
Though agile as a management framework was created primarily for software companies, it has risen as a mindset and framework for managing projects, particularly in environments that require adaptability, collaboration, and fast iteration. In an interesting discussion, I was pleasantly surprised to find that hardcore business processes such as M&A[2] also find usage of Agile for managing complex merger projects.
Agile is like the jazz of project management—free-flowing, adaptive, and all about improvising to hit the right notes at the right time. It’s less about rigid choreography (aka detailed step-by-step plans) and more about syncing with the rhythm of change, all while keeping the audience (your stakeholders) happy.
There is a very thin line between an organization embracing an Agile mindset and getting stuck in the chaos of firefighting. People often mistake the hustle of firefighting as the continuous feedback loop of the Agile mindset. However, both concepts are poles apart and the latter has to be followed in spirit so that it does not get transformed into the former.
Daily Scrum is also a pivotal element of Agile, however, the teams have to be mindful that the daily scrum[3] of 15 minutes means 15 minutes only – it should not be transformed into a free-flowing heavy metal concert!
If executed religiously in its spirit, agile as a management framework makes tremendous sense for organizations undergoing energy transition.
B. Developing a Stepping-stone strategy: One of the leading management consultancy firms – Bain & Co provides insight on how the companies can win while embracing the energy transition. Their approach for developing a stepping-stone strategy talks about an effective three-step process –
The last two steps require a detailed introspection of the company to analyse internal capabilities and identify the most important ways to win.
An example of such a framework is depicted herewith:
Though the applications of the framework can be challenging given the details required for its effective application, the fruits are promising. The framework has the power to analyze the internal health of the organization and furthermore, the actors of the framework can be tailored to meet individual company’s requirements.
The importance of following frameworks, in other words, discipline is highly important when chasing the goal of energy transition. As per the Energy Transition Index – 2024, published by the World Economic Forum, the transition readiness is led by the developed countries – indicating the stricter regulations in these economies.
C. Cultivating Leadership: Strong leadership is crucial for organizations to successfully navigate the complexities of energy transition. Leaders drive a compelling vision, outlining clear goals for reducing emissions, adopting renewables, and achieving net zero. They ensure alignment between organizational objectives and the global need for sustainability.
Effective leaders also create a culture of innovation and agility, empowering teams to develop and implement cutting-edge technologies like green hydrogen, carbon capture, and renewable energy systems. By fostering adaptability and encouraging collaboration, leaders position organizations to seize new opportunities in the evolving energy landscape.
Furthermore, leadership builds resilience by equipping teams with the skills and mindset to address challenges, such as policy shifts or market disruptions. Cultivating leadership ensures that organizations not only embrace change but actively lead it, turning the energy transition into a competitive advantage.
D. Investing into Startups: Investing in Startups is an ingenious way for the organization to accelerate their growth and specifically for the traditional energy companies to become nimble-footed. Startups allow organizations to harness innovative technologies and fresh ideas that may not flourish internally. In the space of energy transition, Startups can bring about cutting-edge solutions such as renewable energy systems, battery storage, hydrogen technologies, and carbon capture, giving organizations early access to game-changing technologies.Additionally, partnerships with startups foster agility and experimentation, enabling companies to pilot new technologies at lower costs and risks. This approach also builds ecosystems of collaboration, leveraging the entrepreneurial mindset of startups alongside the scale and resources of established organizations.
Energy majors such as Chevron, Shell, BP, Equinor and others have dedicated Startup funding mechanisms with a fund size from $ 200 mn to $ 1.4 bn. These investments are done through a dedicated Startup investment company in many cases with 30 people dedicatedly working towards scouting, investing and growing these Startups. The areas of focus comprise of core value chain as well as Renewables, AI, IoT etc. Such dedicated focus demonstrates the level of importance given by the key players to Startups.
To make elephants dance, organizations must master a choreography that blends agility, strategy, leadership, and innovation. Agile leadership provides the rhythm, enabling adaptability and collaboration in a rapidly changing environment. Stepping-stone strategies, and following transition frameworks, provide a structured yet flexible roadmap to navigate the complexities of the energy transition. Strong leadership ensures that this dance is purposeful, inspiring teams to embrace sustainability and innovation as core values. Finally, partnering with startups injects the nimbleness and creativity necessary to keep the momentum alive. Together, these elements create a harmonious performance, proving that even the largest organizations can move with grace and purpose toward a net-zero future.
In the grand ballet of sustainability, even the largest elephants must learn to pirouette. The energy transition is not just a technological leap but a cultural waltz that requires the rhythm of startups, the choreography of agile leadership, and the unwavering beat of passionate human resources. As the world inches closer to its net-zero goals, the question is no longer whether these giants can dance, but how gracefully they can glide toward a greener tomorrow. After all, in this electrifying performance, the spotlight is on those who can innovate, collaborate, and lead the charge with a spark of creativity and a twirl of purpose. The stage is set, and the music is playing—now, let’s make these elephants tango!
In the words of Captain Planet – “The Power is Yours!!”
References:
Jr., L. V. (2002). Who Says Elephants Can’t Dance?: Inside IBM’s Historic Turnaround. Harper Business.
McKinsey & Company. (2024, October 24). What is net zero? Retrieved from McKinsey & Company: https://www.mckinsey.com/featured-insights/mckinsey-explainers/what-is-net-zero
Peter Guarraia, E. E. (2024). Winning in the Energy Transition, One Step at a Time. Retrieved from Bain & Company: https://www.bain.com/insights/winning-in-the-energy-transition-ceo-sustainability-guide-2024/
Price, J. (2024, September 4). Captain Planet: The Complete Franchise' To Hit on DVD on October 15th! Retrieved from Iconvsicon: https://www.iconvsicon.com/2024/09/04/captain-planet-the-complete-franchise/
Statista. (2024). Electricity generation emission intensity in selected countries worldwide in 2023. Retrieved from Statista: https://www.statista.com/statistics/943137/global-emissions-intensity-power-sector-by-country/
United Nations. (2024). For a livable climate: Net-zero commitments must be backed by credible action. Retrieved from United Nations: https://www.un.org/en/climatechange/net-zero-coalition
WMO. (2024, June 5). Global temperature is likely to exceed 1.5°C above pre-industrial level temporarily in the next 5 years. Retrieved from WMO: https://wmo.int/news/media-centre/global-temperature-likely-exceed-15degc-above-pre-industrial-level-temporarily-next-5-years
[1]World Meteorological Organization
[2] Mergers & Acquisitions
[3] Scrum is one of the many frameworks of Agile deployment
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Good article very informative