Metering & Smart Energy International spoke with Pallas Agterberg, strategy and innovation director for Dutch utility Alliander, as part of our Leadership Insight Series.
The interviews in this series include leaders in some of the world’s biggest companies: examining their leadership style, and giving them a chance to share their specific thoughts on the development of the utility sector globally.
Agterberg is director of strategy and innovation, having joined Alliander in 2007. Before that she was a self employed change manager in different sectors, combining organisational change with business development and digitisation.
What do you consider as the top attributes of a successful leader?
I’d like to talk about leadership from a company perspective and less from an
individual perspective, if I may? It’s about leadership in terms of the energy transition and economic transition and this is a specific type of leadership because it’s related to a changing world that is very much optimised. If we look at the energy transition, change leads to uncertainty, and despite the fact that you know the changes coming there is always the question of how you act upon it.
In terms of leadership it’s a long-term focus that is most the perspective of where you as a company are headed. For instance, if you are a distribution company and you distribute electricity and gas, you can consider the changes from a purely organisational perspective and you can work on the premise that you want to keep your network active for as long as possible. That is one perspective. However, the other way of looking at it is from a leadership perspective and questioning “why are we a distribution company?”.
Our basic mission is to make sure that everybody in our area has access to affordable and reliable energy. If you look at it from that perspective, it changes the question to “what do we need to do to ensure that everyone has access to affordable reliable energy?” This opens us up to entirely new opportunities. It requires thinking from a completely different perspective before you can even begin to see your options.
This may be a difficult option to pursue as initially you may need to continue operating as you are doing at the moment – and this is not just related to the energy industry – but I think to any economic sector where you need to come to a higher level of insight before you can see the options.
Which of these values from a leadership perspective do you feel you embody?
I was just talking about values from a company perspective because it was very important for us as Alliander to take that step and not just have a good operational result but to focus on what the values were that we wanted to represent as a company. From a personal point of view in terms of leadership, you need to understand that there are all types of perspectives around the change that is happening. It is vital that you know that you cannot know everything; that there are many perspectives and that it is impossible to know it all.
Respect for other opinions is what makes you go further. Opening up for other insights is what makes the change happen.
As director for strategy and innovation for Alliander, how do you share the vision for what needs to happen in a traditionally very conservative environment?
This is always the difficult part. When I started, we had just unbundled and this unbundling was a consequence of legislation. At the same time, there was a significant lack of trust from the public toward energy companies. However, energy is seen as a public service and it was from this that we reach the insights that our public values need to be upfront for everyone and everything.
Inside the organisation, people see the organisation differently to how outsiders might.
For instance, if you work on a network, you work on the network and the company values are not necessarily a big focus area. There are other areas within the organisation, for example where the teams like to try new things, so innovation is not necessarily a problem – however the challenge is always how to implement the innovations.
Implementation means that you have to change something, so while there are always innovators within a company, there are also people who wish to maintain the status quo and who wish to work in an environment with very little change.
As part of our initial discussions we determined that as a company we would like to be more sustainable, opening up for sustainable energy. This is where the differences between people are seen – for instance, the differences between those that are interested in sustainable energy and those that are basically just interested in maintaining the network as they always have.
What we finally did was to create new businesses, separately organised from the installed base, creating new options through new businesses. In the process, we unintentionally created some friendly competition between the businesses.
About two years after we started this transformation, people started to wonder why the ‘old’ business couldn’t innovate as well and the staff started to get excited about doing new things. The internal competition really helped to drive the change.
In your current role, and in your career generally, what would you consider to be your greatest strengths and/or weaknesses?
I think my greatest strength is that I am able to have a helicopter view and look at a situation from very many different perspectives, be prepared for change and start new initiatives. I think being open to new ideas is one of my strengths.
I do this by creating stories and driving inspirational views on a new future. However, this is also my weakness because if you are considered a dreamer there is a tendency for people to say “yes, the inspiration is beautiful, however now let’s get back to work” and there is always a challenge around getting things implemented.
I do not much like details and I do not like long meetings and discussing it all through.
I am more a “this is what we are heading for and I wish you all good luck” type of person.
This is my way of working but it can also be a weakness. However, I have learned that if I do the inspirational part, others can do the implementation. At the end of the day it’s all about creating the right team to support you.
When you were going through the transformation process, how did you motivate your team – specifically when they were feeling demotivated and had low energy or were questioning how and why all of this was necessary?
Because I know that I cannot know everything and I cannot see everything and people have different perspectives, and different networks, by bringing them together and discussing what is happening you are opening up for new insights and new initiatives. I always try to provide context around what the challenges are, and what can be done, and this creates space for the team to act.
Did you ever have a day when the team said they wanted to give up?
Not the team as a whole, but there are always people who have been trying something new for so long and it’s not working. But the way that I coach people in that situation is by reminding them that there is always something else. Even if you have a long perspective on the horizon, there are so many parts – and if you focus on just one project or one way of doing things, then you will be disappointed. But if you can see that there are so many other directions you can follow, there is always more and it is a huge world of not just adventures but also possibilities; so don’t be disappointed if something is not working, try something else!
One of the things I do is when a new person comes into my team is I do not give them any instructions. I tell them to take some time, discover where their passion is and determine what they can bring to the team and what they think is important for the project. This is very difficult for them, because it is not an instruction at all and because people expect to be told what to do.
That way, they know if they do a certain thing you will be happy with their performance...
The first six months for anyone new to the team are very difficult.
However, in the end, all of them come with their own ideas, with their own solutions or challenges; so remember that if you keep going where your passion is you can really make a change, you can really make a difference. If you just do what somebody else asks for, it’s much more difficult to drive change and innovation.
How did you keep the momentum going if people were coming into the team without clear instructions? Most of us are used to working in fairly structured environments, so how do you still reach and achieve your objectives?
If you give the openness and the space, everybody who comes into a space likes to show that they are pursuing these objectives.
And in many cases people bring a different perspective on how to approach or achieve these objectives.
So, you would share your objective and your vision and then encourage them to see how they fitted into achieving that objective?
Yes, although in many cases they came to me with completely different ideas, which was good.
For instance, they came with all sorts of technical challenges and one of the team members said they wanted to get more detail around social innovation. I didn’t understand why and what we would get out of that. But this thought process led to a project within the Netherlands led by consumers, whereby we were asking people how they would like their neighbourhoods to look 10 years from now and they started to co-create and design their own future. So, this was a completely different perspective that I hadn’t thought of.
The team took the project one step further and said “if you have an idea of what you would like your neighbourhood to look like in the future, how about how you would like it to look now?”. For instance, we asked people to envisage how they thought their neighbourhoods would look without natural gas and they came up with ideas and these have led to a serious approach to working with neighbourhoods on the energy system.
It has led to a national perspective that changing the built environment is not just about instruments of energy efficiency or isolating your building or putting regulations or subsidies in place. By working together with the neighbourhoods, we have looked for new ways to heat their buildings, etc.
This can be from a district heating or all electric perspective, but so far we have 10 neighbourhoods working on these types of plans, and it’s a completely different approach and I would never have had that idea.
How do you balance the challenge of being focused on achieving objectives and allowing people sufficient space to pursue blue sky thinking?
I take a strategy perspective which means that you mustn’t ask for focus in the early stage – of course you need focus – but later on in the process. So it’s a process of opening up, getting new ideas, sorting them out and you weave in focus from a management perspective.
Ideally, you are also in a situation where you have a strategy department, and funds for innovation in your budget. It is very important to have budget set aside for innovation. Very few energy companies have sufficient budget allocation for innovation – which is very normal for energy companies – but energy is changing and we need to change with it. Note, for instance, that Facebook allocates almost 20% for innovation, whereas utilities allocate 0,1%–0,5% of their budget for innovation.
It is important to manage your innovation budgets in order for you to be able to pursue effective projects – I would suggest starting with a lot of them which are smaller and which will help generate ideas. From there you determine which require larger investments and that helps drive your focus.
If we can move a little bit more toward what is happening within the sector specifically: being the person who drives innovation within Alliander, where do you see the opportunities going forward? I imagine your perspective is a little bit different to that of a traditional utility executive?
Yes, that is something I have found to be true. The thing is – and this is a point I raised right at the beginning – as long as you look at your challenges from only your company’s perspective, you will have a very one-sided view of what is going on. You need to look at it from an entire system perspective. If the system is changing it means you need to find a new role to support it.
The way the system is changing is that new technologies are much more decentralised than previously, so you are able to generate power everywhere. We came from a situation where there was centralised production and where you needed transmission and distribution to enable power usage. The new system we see is that solar is getting cheaper, you can generate energy from biomass or gasification, and generation options are growing. We are moving to a CO2 limited economy and as things change there are other types of symbiosis coming into play, and there are millions of different actors that are looking for new solutions. The industry as it was is not the industry as it will be.
Instead of starting with the attitude “how can I optimise it for my benefit?” I am looking at it from the perspective of “how is it changing and how can I be part of that change?”.
I think this is the fundamental difference in thinking about how your company can be part of the future energy system and this changing world. If you consider all of these actors you realise that there is so much work to do yet, and instead of looking at where the opportunities are, too many companies are busy defending their position.
What I always advise is that “it is not necessary to stop what you are doing right now; do it as well as you can, as long as there is demand” but you should also start working on new things and allow these a chance to grow. If your new opportunities turn out more viable than your current business, then you change. Change can take maybe five or 10 years – it doesn’t all have to happen now, but you do need to try new things.
Be open to a new future.
From a future perspective, what do you believe the technological focus will be?
There is not just one. The major thing with technology is that anything is possible.
There is already large-scale renewable energy generation, and for the Netherlands, offshore wind generation is very important.
This is going to grow rapidly, but I also see a trend whereby electric vehicles will be more than just vehicles; where they can be connected to the grid and be both a vehicle and a storage system.
In some countries, they are offering free energy in exchange for access to the battery and there are energy suppliers who believe they can make money by utilising the battery and exchanging ‘cheap’ energy for ‘more expensive’ energy. In other words, they are able to make money due to their flexibility and as a consequence they can give away the energy used for charging the cars. This is a situation where we could see a car manufacturer becoming an energy supplier, so things are really changing.
I have also heard of water suppliers who, in new buildings or complexes, are not connecting the internal sewerage to the external system but are utilising the sewerage to produce energy for the building or the complex.
These are just some of the changes that we are experiencing. The amazing thing is that there is not just one solution, as it will be a combination of a lot of things.
So, don’t just choose one type of technology – storage, production, distribution – it’s all changing. It can be more, it can be less – nobody knows.
On the distribution grid, for instance, one of the major challenges will be the growth of decentralised wind and solar and the increase of electric vehicles on the network.
This will grow rapidly and I can imagine in 15 years from now that one third of
distributed energy will be for charging electric vehicles. If you add that up it means you may need to double or perhaps triple the network you have now.
But if on the other hand, as solutions from vehicle manufacturers and local energy arise, the network may be used even less than it is now. So, do we face a future where we use the existing network less than we currently do or where the use of that network triples? I believe that in some areas we will need to triple the existing network infrastructure and capacity, yet in others the network will be used less than at the moment. However, we don’t know which areas this will affect yet so we are investing in all sorts of data and measurements in order to have a clear idea of what is happening and utilising a ‘just-in-time investment’ strategy, otherwise we will not be able to handle this.
How does this affect your strategic direction?
Our most important strategic direction is still to make sure that everyone has access to affordable, reliable energy. That is our compact and when we consider our future, we want to make sure that energy will be affordable and prevent expensive investments that might not be necessary. We are also creating new asset management tools to make this possible. We see many smaller companies for which a big investment in innovation is just too expensive and we believe there is an opportunity for us, and for them, whereby we can exchange some of the tools that we develop for managing our grid and potentially sharing the costs. This is one of our strategic goals: to innovate and to find partners that want to be part of that innovation.
What is the most important takeaway for utilities from our conversation today?
My message is “Look at the opportunities instead of the threats; turn challenges into opportunities; and always go back to the purpose behind your company – why are you there?”.
I think for most energy companies their reason for existence is to provide people with access to energy and if we focus too much on profits we will end up losing our customers. In the past, we operated in an environment where it was impossible to lose a customer because they had no other option, but there are now so many options and these will continue to increase – so focus on why you are there and grab the opportunities! MI
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