The energy sector is in turmoil. Energy companies are in a painful process of restructuring their companies. This week a young professional at RWE/Essent shares her experiences. She sees a company that is shedding its old state-owned utility feathers. She also sees a company that tries to get on top of the game again by implementing new innovation strategies. Whether it will succeed is another matter. “This is still a conservative sector of old men in gray suits. “ This article is part of the Power Talk blog by Hendrik Steringa hosted on Energy Post.
“I found the previous article on Power Talk about Nuon to have a negative connotation. I found it hard to judge in what position this person had worked within Nuon. I also got the impression that he was a frustrated former employee. That kind of frustration I saw a lot when I started working at RWE/Essent (Essent is the largest energy producer in the Netherlands and a full subsidiary of German energy giant RWE, editor). There was a reorganisation underway and the atmosphere on the work floor wasn’t really pleasant.”
“People are just uncertain during reorganisations. One needs to deal with “the change curve”. Meaning, there are a lot of emotions, emotions that build up inside people and that sometimes overflow. That manifested itself in inaction, anger or sadness. But at some point I noticed there was a turning point when people realised that they, voluntarily or not, had to leave the company, or that they were staying and started putting effort in moving forward again.”
Employees who work with coal fired plants and who are fully committed to their work find it extremely painful that many people speak so negatively about coal
That frustration is not only a result of the internal reorganisations. She continues: “At the generation division [RWE generation], for example, people feel terrible about what is going on now. They find it terrible that power stations operate at a loss and that the plants are being closed down. Employees who work with coal fired plants and who are fully committed to their work find it extremely painful that many people speak so negatively about coal.”
“Employees of the generation division were very upset when invitations for the New Year’s party were sent out. How could anyone celebrate when times were this bad? A while ago I talked to an RWE employee who observed a change amongst the RWE staff over the past five years. No longer do they dare to be proud of working for RWE, because of the negative image that is depicted in the media. Previously, RWE was seen as the backbone of the economy, they were proud to be a part of that. Now they feel they are the bad guy.”
Shedding the old DNA
“Essent used to be a government-owned utility. At times this can still be noticed. Some older employees have been working at Essent for over 30 years. They have experienced the transition from a government-owned utility to a commercial company. But the history does not just disappear from the DNA of the company and the people. Perhaps this has to do with the characteristics of the energy sector. Energy is a basic need, and therefore the energy sector remains a highly regulated sector. This limits the company in its commercial activities.”
“People at RWE/Essent are now fully aware of the necessity to search for a new role as an energy company. But what that means exactly is still quite abstract”
“There are quite a few people that had to leave the company during the reorganisations. Nevertheless I believe that we can do the job with fewer people. As I said earlier, you noticed that the company still had elements that remained from the time when Essent was a public company with a lot of bureaucracy. In my opinion, several things could really be done quicker and more efficient.”
“That is exactly what I see happening now. This process is being steered throughout the whole company by ‘House in Order’, an internal consulting branch. Looking at effectiveness has become more important with a focus on cost reduction. Results will be made measurable in order to make timely adjustments. Meetings for example are shorter these days and more action-oriented. There is a tight agenda and appointments are tracked through a decision and delivery list. Previously I noted that meetings were often not very concrete and could also last much longer without any clear result. The ‘House in Order’ concept is so successful that it was also introduced at RWE in Germany. ”
Innovation takes centre stage
“The company is under pressure because of the rapid changes in the sector. RWE/Essent is working hard to adapt to the new reality. But there is still a lot of work to be done. We need to change faster, innovate and launch pilots. This is quite difficult when you are used to working with large power plants”.
“Each division within Essent used to have its own people working on innovations but that was too fragmented. Now this is centralised and placed in an innovation division with a staff of about 20 people. Entrepreneurs were hired but also people from the telecoms sector. That sector went through a similar transition as the energy sector is going through right now, where decentralisation and data play a key role. These people take this experience with them, is the idea.”
“This new division is headed by a director of innovation who reports directly to the board. They have created distance between the business division and the innovation division. The reason for this is that the business division solely looks at the returns of different activities within the company. Obviously for innovations this is not always clear straight away. The idea behind all this is to provide the innovation efforts with as much room to maneuver as possible and to create a safe environment for pilots.”
“At one point I noticed that I started thinking like the company. I also noticed that I started to defend RWE/Essent in discussions”
“People at RWE/Essent are now fully aware of the necessity to search for a new role as an energy company. But what that means exactly is still quite abstract. It is clear though that we have to broaden our market role because the margins of the new business models are low. The former CEO of Essent [and until recent Chief of Innovation at RWE, editor] Erwin van Laethem, directed innovation efforts towards technology that offers people smart energy solutions at home. RWE Innovation is working on this very hard now. But people within the company hold quite different opinions on whether RWE should be a technology company or not. It would be great if RWE could take up this new role, but there is still a way to go.”
The new generation: a feel for sustainability not essential
Although RWE/Essent had to let go of quite a lot of employees, it is still investing in a young generation of employees. About her reasons for working for RWE/Essent she tells the following: “Why work at RWE / Essent? I wanted to work at a large company and Essent invests in young people. That appealed to me. My father told me not to work for a company that is not doing well. But I am glad that the energy transition is a hot topic now. A lot is happening within the company. I am learning a lot.”
“To have a feel for sustainability or the transition is helpful but not essential if you want to work for Essent. During my application at least I was not explicitly asked about it. Of the young professionals there are some who think that sustainability is important and who are also working on it. But there is only one I know who is truly involved in the energy transition. For this person it is a strong driver. The topic is discussed sometimes amongst the young professionals but certainly not on a daily basis. Most find the topic interesting but are more interested in doing their jobs well.”
“You have to understand that a significant share of the professionals have little to do with energy. There are after all many positions within the company that have nothing to do with the core business of the company. Finance and HR for example have absolutely nothing to do with energy. The people who work there are professionals in the field of Finance and HR. They could just as well be doing their work in any other sector. ”
About how she sees her future at RWE/Essent she says: “At one point I noticed that I started thinking like the company. I also noticed that I started to defend RWE/Essent in discussions concerning the companies’ role in the transition. [This year RWE/Essent started operating a large coal fired plant in the north of the Netherlands,editor.] This while I do not see myself working at Essent for the next 30 years. The energy sector is still a conservative sector of old men in gray suits. I will move to another company or business sector when I am ready for a new challenge. The job I have now, I could do at another company just as well.”
This is the fourth article in the Power Talk blog series hosted on Energy Post. For the other articles, and for more information, see here. The name of the interviewed person is known by the editor.