The perfect storm: Leading through disruption in Australia's energy sector

“As our sector faces unprecedented disruption, capable and inspiring leaders will play a pivotal role in driving the energy transition and securing our industry’s future success.” – CEO

“We need our leaders to be equipped to overcome complex challenges and lead our teams to deliver sustainable energy solutions promptly and responsibly.” – EGM Delivery

“The energy transition presents the ideal platform, and imperative, to build our leadership muscle and come out stronger.” – EGM People & Culture

Each of these fictional perspectives emphasises the opportunity for energy business to strengthen capability of leaders today, the better to shape the future of their organisations and industry. 

Nous’ energy and leadership experts, supported by our Energy Advisory Council, recently reflected on the most crucial requirements of leaders in the energy sector, building on recent pieces that have reflected on leaders in the broader sustainable development sector and in financial services. We identified five areas that have grown in importance in recent years, given the urgency and complexity of Australia’s energy transition and the demands it places on energy businesses.

It is crucial that the energy sector expand its talent pool and that leaders play a key role in this. Historically dominated by a narrow demographic – often characterised as 18-year-olds in flannel shirts who like to grab a beer after work – the sector now faces a labour shortage that demands a broader, more inclusive approach. 

Diversity isn’t just a moral imperative. It’s increasingly a business necessity. The energy transition requires innovative problem-solving, which thrives on diverse perspectives. By bringing in individuals from varied cultural and professional backgrounds – not to mention more women – organisations can tap into a richer array of ideas and solutions.

There is an added practical dimension to this argument. The touchpoints of energy with consumers and communities are expanding. A more diverse workforce will better understand the range of customer personas and community needs, which is critical for navigating the energy transition.

But diversity is not just about representation. It’s also about integration. Nous is currently partnering with an energy distributor to cultivate a safe, respectful and inclusive workplace by engaging with leaders and people at all levels to build a common understanding of what this looks like and why it matters. It is clear that leaders must create environments where diverse voices are not only heard but also valued. This requires a shift in organisational culture, one that prioritises collaboration and openness over traditional hierarchies.

Disruption breeds uncertainty, and uncertainty often leads to fear. For leaders in the energy sector, this means grappling with a workforce and a public that may feel anxious about the future. Empathetic leadership is crucial in this context. Leaders need to engage people through change, maintaining trust while exciting them about the possibilities ahead.

The energy transition will require many segments of the workforce to fundamentally change what they do and how they work. It will also require customers to embrace change and engage with their energy usage in new and different ways. Leaders have a crucial role to play in leading this change, by setting a direction and engaging hearts and minds.

Empathy, however, is not just about soft skills. Leaders must understand the emotional and psychological impacts of change on their teams and stakeholders. This includes recognising the unique challenges faced by employees who interact directly with sceptical communities or navigate the complexities of new technologies. A large energy business that Nous is working with is currently tackling this through leader-led engagement to define team-level behavioural commitments. This work aims to cultivate empathy within teams, positioning leaders to drive this from the front. 

The energy transition is rife with wicked problems, which is to say with challenges so complex that they defy straightforward solutions. In this context, fostering a culture of experimentation and adaptation is essential. We need to try things, learn from them, and adapt.

However, due to factors such as the significant degree of regulation and the inherent risks of energy sector work (physical safety concerns for individuals, network reliability for communities), the sector is cautious by nature. The challenge, then, is to differentiate between operational risks, which must be tightly managed, and those strategic risks, where a higher appetite for experimentation is warranted.

Leaders must take calculated risks in areas like new product development, pricing models or customer engagement strategies. For example, in the Consumer Energy Resources (CER) space, this might mean pioneering innovative and integrated offerings across generation, storage, flexible demand, energy optimisation technology and aggregation to create new value streams for both customers and the business. These kinds of moves inherently carry uncertainty and a higher risk. The key is to balance these two imperatives, and to create an environment in teams and organisations where it is safe to experiment, and to fail, under the right conditions.

This balance is particularly critical given the high stakes of the energy sector. An experiment gone wrong in this space has the potential to take down Australia’s eastern seaboard. Leaders must therefore cultivate a nuanced understanding of where and how to take risks, ensuring that innovation does not come at the expense of safety or reliability.

The energy transition demands a level of integration that many organisations are not yet equipped to handle. Historically, energy companies have operated in silos, across technology, operations, capital delivery and customer teams often working in isolation. While many organisations are working hard to break down silos, the energy transition creates an increased sense of urgency to address this.

Leaders need to adopt a systems mindset, which means thinking holistically about how different parts of the organisation – field operations, digital teams, data analytics – can work together seamlessly. We recently wrote about the shift towards a systems thinking, in which the traditional, linear way of thinking about the energy ecosystem is increasingly giving way to one that sees it as a web of interconnected value.

The shift also requires a cultural transformation. It’s about fostering a sense of “one organisation,” where everyone is aligned around a common purpose, with a clear understanding of the key connections required across diverse parts of the business.

Perhaps the most complex challenge for energy leaders is navigating the competing demands of diverse stakeholders. From regulators and industry partners to customers and employees, each group has its own priorities and expectations.

In this sense, leaders need to act as translators, interpreting the complexities of the energy transition for each stakeholder group, making it relevant and understandable. This is particularly important for customers, who may be aware of the transition but struggle to grasp its implications for their daily lives.

Nous recently supported a major energy business develop its strategic advocacy plan. A unanimous view across technical, strategy, finance and regulatory leads was the need to invest in ensuring the businesses’ leaders understood and felt comfortable in their informal advocacy roles communicating with stakeholders.

Emotional intelligence is once again key. Leaders must empathise with where each stakeholder is coming from, even when their demands conflict. It’s about finding common ground and building trust.

What sets energy leadership apart from other sectors? The answer lies in the unique combination of complexity, impact, and visibility. While every sector faces disruption, the scale and urgency of the challenges in energy are unparalleled.

This is what makes the transition such a pressing leadership challenge. It requires leaders who can harness diversity, lead with empathy, foster innovation, think systemically, and manage competing stakeholder needs. These qualities are not optional: they are essential for navigating the complexities of this moment and shaping a sustainable future.

Get in touch to discuss how Nous can support you build the capability of leaders in your business.

Connect with Simon Guttmann and Anita Sarris on LinkedIn.