The utility industry is experiencing a period of profound change, one that is moving companies to look and operate far differently than in the past. Industry leaders are facing, and will continue to face, new challenges in this new dynamic and evolving environment. The external pressures transforming the industry include:

  • A profound change in talent — the loss of a large part of the workforce due to large numbers of retirements; new skills required of employees to keep up with new technologies; and a high demand for engineers.
  • The evolving dynamics of the energy market — increased pressure from the government and customers for better, cleaner energy sources — set against the backdrop of fluctuating demand.
  • Widespread security challenges — the growing threat of cyber-war and other attacks on power grids, and the investment required to defend against them.
  • Increased competition in the industry — new players in individual markets, dynamic pricing models and industry consolidation have emerged in response to deregulation.
  • New capital requirements — increased pressure to rebuild power grids, replace aging support systems and infrastructure, and invest in emerging technologies such as smart meters.

To meet these changes, utilities are moving away from being the traditional, slow-moving, “safe-bet” investment companies that were once characterized by steady and predictable financial returns, and generated by solid, slow-growth. Instead, every utility must now redefine not only its operating and financial models, but also its model for human capital. It’s all up for grabs.

Addressing these challenges requires transformational leadership, a style of management that is best represented by thinking strategically, innovating, and engaging and inspiring others.

In the utility industry, transformational leaders must be visionary. They must be focused on the end goals and must be able to incorporate a greater use of cleaner, renewable energy. New definitions for success in the industry will be established by these leaders. They must be nimble and competitive in the face of industry consolidation, as well as be agile enough to navigate the numerous regulatory and competitive uncertainties facing a once-stable industry. Finally, transformation leaders must be able to lead a diverse workforce, with decades of experience doing business a certain way, in new directions.

As transformational leaders think about human capital and their talent management priorities, they will consider:

  • What can we do to ensure knowledge transfer since so many of our key people will soon retire?
  • How do we source, hire, and retain the talent we need in light of the skills gap faced by our industry?
  • How do we keep our workforce engaged and productive when they feel besieged by change?

“Transformation leadership is making everything about the movement, not you. Be public. Be easy to follow.” — Derek Sivers

To help answer some of these questions, Towers Watson recently partnered with Oxford Economics to conduct a worldwide study of talent, “Global Talent 2021,” in order to identify and understand the full range of practices, trends and challenges needed by leaders today. Specifically, this research identified four critical leadership competencies that reflect the key attributes of transformational leaders that will be in highest demand through 2020:

  • Agile thinking: being open and flexible to new ideas and processes, quick to understand situations and prepare multiple scenarios;
  • Global operating skills: understanding the nuances of different cultures, how to manage diverse individuals, and how to get business results in any environment;
  • Digital business skills: making business predictions, and operating in a technical and virtual world; and
  • Relationship building: working collaboratively and creatively with others, and considering the audience when communicating.

Unfortunately, these leadership competencies are in short supply. Organizations will have to compete vigorously against the rest of the industry to identify, hire and retain these leaders. There is, however, an alternative — to grow and groom transformational leaders internally.


As you read this article, you may ask, “Do I have the right stuff to be a transformational leader?” In response, you should consider the degree to which you show sincere interest in the well-being and success of the people on your team, and that you act in accordance with your organization’s values. To ensure that you thrive — and help your team thrive — ask yourself whether you have embraced the future in the face of the profound challenges facing the utility industry.

With that said, ask yourself the questions below to assess the degree to which you — and others in your organization — are transformational leaders. If you answer “no” to any particular item, follow the suggested behavioral examples so that next time, you can respond with a resounding “yes.”

1. Do you inspire your team? Are others willing to “walk through walls” for you?

• Convey passion and enthusiasm for the organization’s vision, mission and goals; make it exciting for your team.

• Provide verbal praise both publicly and privately.

• Support others when things go wrong. Understand and respond to others’ concerns to gain their commitment to ideas.

2. Do you show consideration for others’ development needs? Do you authentically care for your team?

• Demonstrate that you understand other’s concerns and interests by actively listening; restate and confirm what you have heard.

• Conduct regular discussions regarding people’s career and development interests.

• Be an advocate for others by engaging in learning activities.

3. Do your direct reports have clear goals? Are these goals well-articulated and communicated?

• Take the lead in ensuring your team members have specific, measurable and results-focused performance goals.

• Regularly assess each person’s performance against those goals and communicate achievements.

• Provide constructive, behavioral feedback and support to each person regarding their performance.

4. Do others understand the organization’s objectives and how their goals fit into the bigger picture?

• Regularly mention the organization’s vision, mission and strategy when speaking with others.

• When delegating or discussing one’s objectives and tasks, tie it back to the organization’s purpose.

• Create an environment that is inclusive rather than exclusive.

5. Do you encourage others to think differently about situations, rather than go with the “tried and true?”

• When faced with a common situation, challenge others to think how it can be handled differently.

• Encourage others to think outside the box and try new things, even if it involves taking a risk.

• Provide recognition for new approaches and innovative ideas by providing helpful feedback even when things do not go well.

6. Would others consider you to be a role model for the organization? Do you lead by example?

• Transformational leaders “walk the talk.” That is, their behaviors and words are appropriately and ethically aligned.

• Portray the values of the organization and the behaviors you want others to exhibit.

• Act consistently and calmly, regardless of situations, so that others can easily predict your behaviors and decisions.

Transformation leadership is about implementing a vision, while establishing and nurturing a stimulating, forward-looking work environment. It’s also about treating people as individuals and allowing for the personalization of roles and maximizing talent. Virtually all leaders shape and set business strategy and objectives, but transformational leaders guide and inspire employees at all levels to meet and exceed business goals. They inspire by articulating the company’s vision with confidence, not fear. Last, they embody the organization’s brand and model its values through their actions.

Your ability to be a truly transformation leader will determine how successful both you and your company will be in navigating the constantly shifting and evolving dynamics of the utility industry.

Do you inspire your team? Are others willing to “walk through walls” for you?






de Wetter

de Wetter






Terry Carik, Ph.D. is a senior consultant within Towers Watson’s talent management and organizational alignment practice. Passionate about helping organizations and their employees be more effective, she has 20 years of experience in both consultant and corporate roles. Located in Chicago, she has worked with a variety of clients in the areas of selection, assessment, performance management, succession management, coaching, training and team development.

Catherine Hartmann is a senior consultant in Towers Watson’s Southern California compensation practice. With more than 18 years of human resource consulting experience, her assignments have included working with Fortune 1000 organizations in the energy and utility, pharmaceutical, finance/banking, technology and entertainment industries. Catherine’s specific areas of focus are analyzing and designing total reward strategies, developing global/national job and salary structures, building compensation and performance management programs, and conducting employee research.

David de Wetter is a senior organization effectiveness consultant in the Dallas, Texas office of Towers Watson, a leading global human capital consulting firm. He has 25 years of experience effectively implementing strategy through people. He helps organizations align strategy and structure with objectives, helps them develop and implement human capital programs and enhances human resource capabilities through strategy, structure, and metrics.