Do you we have an Energy price crisis?

We are living a period of oil crisis are we not? This past week the pressure seems to have subsided with a drop of the world market price to a lower level of 125 US dollars the barrel. Forecasters are still maintaining that very soon we shall strike the level of 200 dollars the barrel. Energy or Oil crisis we are all aroused to the issue, we are all concerned. Is it enough? More importantly what are we doing about the crisis? What action each one of us at micro level, macro level, and as a community is taking? Crying over spilled milk and talking about it over the media only raise our conscience to the issue. Does it move us to action?

A bunch of toads were thrown in a pot of warm water. A fire was lit under the pot to warm up slowly the temperature of the water. The toads developed high adaptability to adjusting to the change in temperature. At first, as the temperature rose, they enjoyed the nice and warm environment. The toads felt good, relaxed and even sleepy. Later the temperature became so warm that the toads though they realised the forth coming deadly temperature, they could no more jump away from the pot.

Are we not still in the crisis in spite of the recent adjustments? Do we have to experience another dramatic surge in the price of energy to spur us to action? Does the temporary lull in the rising curve of the price blind our long term visibility? Do we have the acumen to address the issue timely and move to action?

I found a recent article written by E. Ted Prince addressed to business leaders on the subject, from which we could learn. Here are some extracts:

Companies need to identify leaders such as these as a high priority in order to bring human capital solutions to the oil crisis. Ultimately any disruptive environment is a human capital crisis. The crisis will eventually be addressed and solved. The issue is who will address and solve it most rapidly and in the best manner. This will occur through having leaders who, among all the other qualities needed to lead successfully, must also possess high business acumen. This is the challenge for leaders and their HR and LD executives.

Explore three channels:

1. Ask HR and LD to develop an oil-focused human capital action plan based on implications of the oil crisis. In the plan, cover selection, recruitment, on boarding, development, and assessment. Contrast what is happening at present and the areas that need to be changed to meet the challenges.

2. Improve your people’s capability to respond to the oil crisis by developing and implementing a business acumen assessment and development program for managers and executives. The program should focus on assessment of business acumen and on its development to prepare managers and leaders for the new financial and value challenges posed by the oil crisis.

3. Develop new oil-focused succession plans and planning. Stress capabilities that will enhance your ability to address the crisis and choose those managers best suited to confront these issues. We also suggest:

  • Prepare an HR impact statement
  • Redesign recruitment criteria for new hires and promotions
  • Redesign on boarding programs
  • Run a simulation on one aspect of the oil crisis
  • Integrate acumen approaches with oil issues into LD programs
  • Organize an oil crisis workshop
  • Develop business acumen courses in corporate universities aimed at oil crisis and addressing it creatively
  • Organize an “oil literacy” seminar for high potentials and other leaders
  • Establish a human capital crisis team to address the oil crisis issue
  • Redesign structures to enhance capability to deal with the crisis
  • Prepare recommendations for changes to TM to address crisis
  • Hire people with an understanding of oil industry in certain key positions.

Template for Disruptive Change

This issue is not only about the oil crisis—we will soon face more crises whose nature will be unpredictable. All we can do is to prepare and anticipate that crises incorporate challenges that require leaders with exceptional business acumen, independent of their other leadership qualities. So leadership developers need to address the issue of how these challenges will also be addressed and faced.

Answer three questions: Does the leadership template cope with disruptive change? Can the template lead to higher shareholder value? Does it have formal ways to assess the financial and value creation impact of leaders in measuring response to disruptive change?


#1 Oli on 08.11.08 at 6:56 pm

I agree. The market of energy is in dire need of disruption.
Why is oil the only viable energy source for things like transportation?

By viable i meant mainstream and in mass production. Alternative energy sources are due to change the market as we know it.

That said, I think that planning and organizing is one thing, and a necessary step to get over the oil addiction, but ‘doing’ is the crucial step in making things happen. Know any good team of engineers?

#2 Oli on 08.11.08 at 8:38 pm

The danes look like they are leaders in that area:

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