How Change Management Shapes the Future of the Energy Sector
The energy sector is in a state of flux. Today, change management in the energy sector isn’t a nice-to-have, but a must-have for several reasons:
Political influence
As governments control key factors that shape the global energy landscape, geopolitical developments, and policy decisions can have a big impact on oil and energy markets.
These critical policy areas include support for conflict-affected energy regions, climate and clean energy ambitions, trade relations between major economies, and management of geopolitical tensions.
Consequently, changes in any of these domains can send ripples through the globally interconnected energy market. Without an effective change management strategy, this can affect employee engagement and productivity levels.
Technological shifts
The energy industry is undergoing a major shift as it moves from fossil fuels to renewable energy sources, adopting eco-friendly production methods to reduce carbon footprints.
Companies must update their legacy systems and adopt new technologies to navigate this transition successfully.
Technological advancements, like automation, data analytics and digital transformation help improve efficiency and the ability to adapt to energy market changes.
Regulatory compliance
Governments worldwide are introducing regulations to encourage the adoption of clean energy and decrease carbon emissions, forcing energy companies to adapt their operations, which leads to new processes, systems and other impacts on employees and stakeholders.
As government and society increasingly prioritize sustainability and corporate responsibility, the energy sector faces impending privatization and stricter environmental regulations, which will require timely, widespread adoption across the workplace.
Market changes
The energy sector is undergoing a huge transformation with the global transition to renewable and sustainable energy solutions. Fluctuating oil prices are also reshaping market dynamics and intensifying competition within the industry.
While not all changes affect people’s work, incorporating a change management strategy to your organization can support changes to job roles and location, compensation, systems, compensation and process updates.
Organizational changes
The energy sector is bracing for a wave of company and customer consolidation, mergers and acquisitions, and cultural shifts as it adapts to emerging market conditions and technological advancements. As a result, energy companies are changing their business models, strategies, operations and processes.
These changes directly impact employees' work. Failing to effectively manage the human aspect of these changes can result in project setbacks, increased costs, employee burnout, internal resistance and diminished returns on investment.
This is where change management in the energy sector comes in. By providing clear communication and the right training, reducing uncertainty, and building a supportive work environment, change management helps energy companies navigate market shifts while supporting their workforce through these changes. Because energy companies don't change—people do.
Why the Energy Industry Is Investing in Change Management
Once known for its conservative approach to adopting new operational models, the energy sector now finds itself at the center of major transformations driven by global demands for sustainability, increased regulatory pressures, and rapid technological advances.
Energy companies today recognize the need for a holistic approach to managing these transitions.
Former state
In the past, the energy sector relied heavily on project management, focusing primarily on technical implementation while often neglecting the human aspect. This oversight led to resistance, confusion, and poor stakeholder engagement, making it harder to implement new initiatives.
At Sunflower Electric, a previous ERP implementation nine years earlier left a negative impression on employees. The "ghost of projects past" contributed to resistance and skepticism when the company embarked on a new ERP project.
Future state
Today, there’s a growing understanding that effective change management must encompass both the technical and human sides of change.
Sunflower Electric's successful ERP implementation, which incorporated Prosci change management strategies, shows the value of focusing on the people side of change.
The company is now building enterprise-wide change management capabilities, with executives, managers and employees embracing the Prosci ADKAR Model.
Transition strategy
Energy companies increasingly apply structured, research-backed change management processes to bridge the gap from the current state to the desired future state.
Sunflower Electric's transition strategy involved a holistic approach, including training employees at all levels, engaging Prosci Advisory Services, and acquiring an Enterprise Change Management license.
The Prosci Methodology offers a proven approach to enable the people side of change and deliver organizational results.
It consists of three key components:
By applying this methodology, energy companies can effectively manage the human aspect of change, drive adoption, and achieve desired business outcomes.
The Prosci Methodology
Your Successful Change Journey Begins With Prosci
Implementing structured change management practices can significantly boost success rates for energy projects, making them up to seven times more likely to meet objectives.
Correlation of Change Management Effectiveness With Meeting Project Objectives
The energy sector faces unique challenges like market volatility, geopolitical issues, and rapid technological advancements. These challenges call for a flexible yet structured change management approach.
Effective change management in the energy sector goes beyond simple communication. It involves engaging deeply with stakeholders to identify root causes of resistance, prepare and equip people for change, and support successful transitions.
Our Prosci 3-Phase Process bridges the gap between individual and organizational change by providing a structured, scalable approach:
Phase 1 – Prepare Approach
Prepare the change management approach by defining success, impacts and the approach needed to achieve success.
By developing a customized, scaled change management strategy with sponsorship and commitment, we position the change for success.
Phase 2 – Manage Change
Develop specific plans to move impacted individuals and the organization through their ADKAR transitions, and then measure, track and adapt performance. The purpose is to get impacted individuals and groups on board with the initiative or project by equipping them for the change through target actions and support.
Phase 3 – Sustain Outcomes
Achieve the project's benefits and focus on sustaining the outcomes. Review performance to assess where you are now, and then activate sustainment by determining what is needed to ensure the change sticks.
Finally, transfer ownership by identifying who will assume responsibility and sustain the outcomes.
The purpose is to reach the desired outcomes from the project by ensuring adoption and then aiding the organization in sustaining the changes.
