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Strategic Priorities – Energy

Strategic Priorities – Energy

The research was conducted with participation of 163 global Energy CEOs from Australia, China, India, Italy, Germany, Japan, France, Spain, UK and US.

Andy Steinhubl

Principal, Strategy Leader, Energy & Natural Resources



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Energy CEO’s survey responses reflect the uniquely challenging times presentedby today’s markets for energy players across the value chain. While capital markets insist on dividends and growth, the recent severe downturn in oil prices, coupled with elevated global economy and demand pressures and escalating regulatory requirements, affect all energy segments and present CEOs no easy path.


Thus, Energy CEOs reflect dual priorities to both develop new growth strategies, aswell as reduce cost structures and increase cash flow from operations. Consistentwith these priorities, the top challenges they indicate include the needs to strengthenprocesses and achieve operational excellence, while responding to ongoing regulatoryand market changes in order to ensure financial growth.


Given these tumultuous times, it is not surprisingly that a majority of chief executives inenergy are focusing their time on leading their companies in rethinking their strategies and business models. Asset and business portfolios are being evaluated rigorously to assess fit, including current profitability, upside potential, and having the competitive advantages and position necessary to drive current and future margins. The imperative to drive competitive advantage is leading companies to consider the cost and value impact of their products and services on customers, and whether their business model propositions to customers offer a strong enough solution. The use of alliances and M&A is escalating to create more compelling solutions as well as capture cost reductions through synergies.


Looking ahead, CEOs are seeking to balance risk with the need for new business models to drive growth, recognizing that challenging times require new approaches .And they anticipate thereafter shifting their focus from setting new strategies toensuring their execution.

Which of the following issues have the biggest impact on your company today? Global economic growth, Energy prices, Regulatory environment, Health care reform, Base erosion and profit sharing tax reforms (BEPs), Information protection/ cyber-security, Geopolitical risks, Currency rate volatility, Disruptive technology, Talent pool
What are the strategic priorities for your organization over the next 3 years? Consolidating, rather than expanding; Implementing disruptive technology; Articulating our vision/culture; Articulating our vision/culture; Merger or joint venture; Fostering innovation; Stronger client focus; Greater speed to- market; Increasing cash flow from operations; Reducing cost structure; Developing new growth strategies; Geographic expansion; Promoting and advancing the company (marketing, PR, speeches, etc.)
What are the most critical challenges you expect to face as CEO over the next 3 years?; Ensuring financial growth; Focusing on operational excellence; Expanding geographically; Streamlining our processes; Adapting to government regulation; Managing reputational risk; Ensuring financial health; Strengthening our brand; Spurring innovation; Understanding changing customer expectations; Change management; Development of human capital; Becoming a more data driven organization; Maintaining, strengthening consistency of corporate culture
Which of the following areas/functions will be most transformed over the next 3 years?; Operating model; Strategy; Business model; Marketing and sales; Operations; Product mix; Distribution channels; Manufacturing; Customer base; Management structure
Which C-level functions will become more important to your organization over the next 3 years?; Chief operating officer; Chief financial officer; Chief information officer; Chief marketing officer; Chief strategy officer; Chief innovation officer; Chief compliance officer; Chief security officer; Chief client experience officer; Chief human resources officer; General counsel
Which of the following are you devoting capital to in the next 3 years?; Geographic expansion; outside home country; Business model transformation; Expanding facilities; Advertising and marketing/branding; Geographic expansion; within home country; Acquisition of a business; Increased employee compensation and training; Internet of Things, machine to machine technology, industrial Intranet or other aspects of technology; New product development
Do you feel adequate attention is being paid to achieving cost efficiencies?
If you were to ask your top government official to focus on one of the following issues in the next 3 years, what would it be?; Increasing energy independence; Reducing regulatory complexity; Reducing regulatory complexity; Fostering innovation; Global fair trade; Improving conditions for low to middle class; Improving conditions for low to middle class; Reducing geopolitical risk/terrorism; Investing in education, skills development training; Focus on simplification of corporate taxes; Immigration reform

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Increasing energy independence at 33 percent is the highest while immigration reform is rated the lowest at 3 percent.

How comfortable are you with your current business model?
Looking at the next 3 years, what statement best describes the company you lead?; We will be largely the same firm we are today; We are likely to be transformed into a significantly different entity
Please indicate your level of concern in terms of the following; Your competitors’ ability to take business away from your organization; New entrants disrupting your business model; Your products/ services relevance 3 years from now; Keeping current with new technologies; Loyalty of your customers
As CEO, which of the following best describes your past, current, andfutureinvolvement in strategy and execution?; strategy; strategy/ execution; execution

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