Attracting and retaining leaders to overcome industry challenges

by Ted Konnerth, Egret Consulting Group

Attracting, training and retaining the most talented individuals for leadership positions in the electrical and electricity industries is paramount to driving innovation and profitability. Amid a sea of changing technologies, companies aim to develop or insert the right leaders to help them adapt and re-evaluate a new age of labor force demographics and legislation, among other evolving industry elements. It may be a challenge for utilities to attract and retain talented leaders. The industry is in early stages of a sizable renaissance. Utilities must identify leaders with the talent and insight to address these changes.

How do utilities find and keep the best and brightest people?

New Technology, Legislation and Competition Complicates Recruiting

Utilites are witnessing early stages of a sizable renaissance in the form of new technology, legislation and competition. From a rapidly changing legislative agenda of subsidies for alternative energies, to the push for smart metering technology, to grid expansion complexities and the media hype paid to net zero adopters and clean energy, it might be difficult to identify the types of leaders necessary for the future electricity industry.

Executive leadership teams need to accept that they are now seeking different talent to address changes. Talented new leaders must have a handle on how the industry is changing, as well as how those changes affect their organizations. There is a talent pool from which to recruit that understands the technology, legislation and channel changes within the industry; however, the problem is that utilities are competing with other high-tech industries such as telecom, electronics and alternative energy. Companies within those industries are far more adept at attracting technologically savvy talent than traditional utilities. They are recruiting from top universities and programs and extracting talent from technological hotbeds such as Silicon Valley and the Raleigh-Durham Research Triangle.

Legislation Affects Training and Company Development

The elimination of the Edison bulb, which most consumers have accepted, has impacted utilities. In addition, federal energy codes and investments have impacted the growth of alternative energies, battery development and energy codes. New energy codes and investments will drive the market for years.

State and local influences impact alternative energy “˜s growth. In parts of the Midwest, a two-year waiting list exists for new solar or wind facilities to connect to the grid.

New, talented leaders in the industry must have a broad understanding of the federal, state and local influence affecting growth and development.

Changes Shaping Industry Training

Leaders in power distribution equipment manufacturing, such as Schneider, ABB and Eaton, are focused on training and developing multiple channel solutions. Schneider and Eaton have their own internal energy service company that can promote, install and sell equipment to end-users. Most of their business bypasses legacy distribution partners. This would have been unheard of a decade ago. Launching these internal businesses had required much support; training programs changed significantly to meet this shift in promotion, installation and selling strategies.

The growth of direct current (DC) power distribution has also been significant. DC power distribution enables the development of localized power generation–often with alternative energies–that largely lives off-grid. This change has been rapid and significantly impacts product development, building design and downstream product changes. For example, computers can be powered directly via DC, saving the power loss from rectifying alternating current (AC) to DC. In addition, investor-owned utilities (IOUs), some of which aren’t high on the growth of off-grid power generation and distribution, could develop innovative programs to sell and install off-grid DC power generating solutions to datacenters and other industries, establishing a software as a service (SaaS) revenue model for ongoing maintenance and service contracts.

Growth Challenges

Utilities need to keep several obstacles in mind during the training and recruiting process as they pursue growth strategies:

  • Regulation barriers impacting grid additions,
  • Environmental impacts,
  • Land access,
  • Rights-of-way issues,
  • Availability of capital to finance grid expansions, and
  • Utility commissions’ control on rates to support growth.

Challenges Attract the Most In-Demand Leaders

People change companies for growth opportunities and challenge; they rarely change companies solely for money. Industry executives tend to move to companies for growth reasons such as increased responsibilities, larger scope or an equity role in growing the company. Many also have hopes of making a difference in an organization. Utilities must understand and acknowledge that the need for a challenge is a key motivator for many recruits. They must encourage and hire people with the right ideas and right mentality to move the company ahead.

Offer a Variety of Compensation

Executives expect different forms of compensation. Companies working within the utility industry should take note and offer compensation incentives that match this desire. They should offer bonuses, stock options, equity rights and deferred compensation plans, among other variable forms of reimbursement. This is important when attracting talent and when updating contracts or offering promotions to rising leaders you want to retain for a long time.

Track Your Success: Use Retention Statistics to Gauge Employee Satisfaction

It is important to use retention statistics to gauge your employees’ happiness and how engaged they are within the company. Before rushing to human resources to inquire about organizing a survey, however, realize that most employee satisfaction surveys tend to be fraught with experimental flaws. If the annual turnover rate is near 10 percent, your business is considered a good place to work. In addition, because turnover is healthy for a company, trying to drive turnover below 10 percent isn’t necessarily good for business.

Talented Leaders Want to Grow with Talented Growth Companies

The recession had an interesting impact on talent mobility. Top talent endured years of downsizing and seeing peers removed from the company. They’re ready for a fresh challenge. They’re receptive to growth, innovation, an opportunity to make a difference and adequate compensation for their contributions to the company.

Be Smart About Forward Thinking

Offering challenges and variable compensation can help attract top talent, but staying on top of what’s new in the industry will help retain the best. Trying to keep talented executives on board only through stock options and other golden handcuffs likely will keep tactical people, but won’t entice the most creative or strategic people in the industry. Golden handcuffs or non-compete agreements often retain employees who have outlasted their productive years. Top talent wants to be associated with companies that adapt to stay fresh and ahead of the curve. Utilities need to create new markets, new products and new ideas to keep the most innovative individuals on board.


It’s too time consuming. Furthermore, as the cost of electricity shifts from a flat rate pricing structure to a dynamic pricing policy that better reflects generation cost, consumers will find it too complex and taxing to optimize energy use. An intelligent algorithm instead will incorporate these factors and provide a mechanism to automatically adjust consumers’ settings based on comfort levels and electricity costs.

Analytics resulting in automation extends beyond just the thermostat. Imagine if electric grid operators could better forecast electricity consumption. If they knew that the fleet of Teslas in a particular neighborhood was automatically scheduled to charge from 1:30 to 4:30 a.m., electricity providers would know the total consumption per automobile, as well as the rate of charge.

With solar cells becoming more cost effective, distributed generation’s effect on the grid contributes another data set to the smart city predictive model. With natural gas prices forecasted to remain low due to the large volume of reserves, it is believable that local electricity generation from products such as Bloom Energy may completely disrupt the flow of electrons throughout a smart city. Electron flows are no longer as simple as one-way into a home or business. Once local generation becomes more pervasive, electricity pricing likely will become dynamic. For cities and consumers to adapt to this new system, pricing must be a data element to incorporate into the demand model. The killer app is the one that allows consumers to never think about energy costs, but instead have energy consumption optimized automatically. Integrating a wide array of sensors with consumer habits and lifestyles will create a sophisticated real-time model that enables smart city inhabitants to gain significant cost efficiencies effortlessly.


Ted Konnerth is the founder, president and CEO of Egret Consulting Group — a retained search firm specializing exclusively in the electrical industry. Ted formerly served as the global vice president for sales for Cooper Lighting and holds a Ph.D in psychology.

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