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Energy in Conversation: Business benefits of diversity
POWERful Women, a professional initiative to advance gender diversity within the energy sector, recently reported that 50% of the top 80 UK energy companies have all-male boards of directors. The gap is particularly stark in the global oil and gas industry, with women accounting for only 25% and 17% of middle management and senior leadership roles, respectively (Boston Consulting Group, 2017). The biased representation of company boards in the energy sector not only does a disservice to women and other minority groups based on ethnic, national or sexual identity, it also misses out on significant opportunities for the companies. Research indicates that diversity of workforce can lead to an increase in skills and capabilities, an increased ability to attract and retain staff, and the introduction of a wider perspective (Energy Barometer 2018).
What are the main obstacles to diversity faced by the energy sector? How can we overcome these obstacles, and increase diversity in energy companies?
EI CEO Louise Kingham speaks with Keith Anderson, CEO ScottishPower about the benefits of diversity in the energy workforce, with specific insights into the experience at ScottishPower. This conversation took place at a conference hosted by POWERful Women on 23 May 2018 in London. Watch a clip of their conversation here.
Louise Kingham (LK): As somebody who is in a position of leading in the industry and being able to drive some of this change, we are really delighted that you have been able to make some time to have a bit of conversation around some of these issues. Keith, I guess I’ll start with ‘why is this important to you’?
Keith Anderson (KA): I have two answers to that question, one personal and the other one related to work.
The work bit is quite simple and quite easy. If you look at world-leading organisations, you see that they all have a diverse makeup in terms of their business and their employees; they’re trying to bring the best talent into their companies and they want people coming in with different backgrounds and different mindsets. So, it tells you that if you want to run a successful company, you need to bring diversity into your organisation. Make it reflect your customers, your stakeholders, and what you want to do as a company. From that point of view, this is just a complete no-brainer. It makes absolute sense that we should all look at doing this.
And then from a personal point of view, I’ve got four daughters. They’re all brilliant in their own way. None of them are going to be engineers; I tried, really hard [laughs]. But…it doesn’t matter if you look at the energy sector or other sectors across the UK, they all need to change and do something. As a father you want the best opportunities for your children. As they go up through their careers, you want them to be able to do and have access to everything they want, not to be blocked and not to be held back. And therefore, it’s absolutely incumbent on people like me, and people in a position of influence and authority to actually start making changes and drive those changes through.
LK: I concur with that as a mother of one daughter, rather than four. If [our work on diversity is no longer needed] by the time she’s at work and making her career choices, we’ll have won. So, your daughters will trail-blaze and get there before mine, but it would be a great place to be.
So, understanding why it’s good for business; why do you think then, across sectors, not just the energy sector, that we’ve just been so slow, that progress has been glacial up to now?
KA: I think that some of it is cultural, and it will take time to change. A lot of companies are also a bit guilty of trying to tackle the easy things, or what they see as being easy, which will take an awful long time to make a change. I will give an example: [like] lots of other companies, we are talking with primary schools. We’re trying to get young girls interested in engineering, in what we do, in renewables etc. It is critical to the long-term future of the industry to talk to schools, but if that’s all we do, it’s going to take 25, 35, 45 years for that to have an impact.
What we’re not doing is making some of the harder and more direct changes. I think we need to tackle the fact that, within our companies we probably all have layers of management that don’t consciously block things, but by the nature of what they do and how they work, they are putting people off in terms of career advancement. I think there’s a lot we can do about the way we advertise jobs and the way we talk about the work environment. I suspect, if I spoke to 40 or 50 managers in our organisation and asked them about flexible working arrangements, they’ll all tell me, “It’s a brilliant idea and I fully support it. However, it doesn’t work in my team. Because in my team, we all need to be here, and I need to know who’s doing what.” And it’s just one of these things entrenched in our management culture and training. Managers supervise staff on the basis of inputs, looking at, ‘you turned up at nine o’clock, you left at five o’clock, you went for lunch, ticking the box, fantastic.’ As opposed to looking at the output. That’s the big cultural training shift; we can’t expect managers to change overnight. We need to train them how to manage in the right way. And that’s going to take time. But it’s those things that we need to start doing now and driving through, because they will make it much easier for people to manage their career and their work environment. And that’s not a male-female thing; it’s about how we run companies, how we make it more flexible for people, and how we make things more possible for people.
Additionally, over the next 10 - 20 years the industry’s going to go through wholesale change. There are massive challenges and boundless opportunities for companies in the digitalisation of the sector, electrification of transport and decarbonization of the heating system. The changes will open our market up to an awful lot of tech-savvy, digital-savvy organisations. The Apples, Googles, Amazons of the world already behave very differently from us, and we need to catch up incredibly quickly. Otherwise, we will be left behind like dinosaurs, and deservedly so. That’s why we need the best, brightest people coming into the company. That’s why we need to encourage diversity, and different ways of thinking and working. The analogy I quite often use about the way we should think about the changes that are coming to the industry, particularly the retail end of the market, is a little bit like what happened to telecoms. If you go back 30 years ago, people used to buy telephone calls. Then, all of a sudden the entire industry shifted. Now you buy a bit of technology that gives you access to everything and anything: entertainment, information, data. None of you buy telephone calls anymore. I suspect if I asked anyone in this room to tell me how much does a telephone call cost, none of you would know the answer. In fact, most of mobile phone companies tell you that telephone calls are free. They’ve basically made their core infrastructure and their core product value-less.
I’m not saying that’s definitely what’s going to happen to our sector. But if you have that kind of change coming through, where in effect the core product of electricity becomes a background commodity, and the world moves forward into how do we deliver and help you get from A to B, from the electrification of the transport system, how do we help you run your home through smart devices and through smart metering, then we’re selling a completely different proposition. But we’re also competing with completely different companies, and again that’s why we need to get different people into the company and it’s why we need diversity.
LK: As somebody who’s running a big organisation, I hear some ‘horror’ stories of people whose companies have these policies [you talked about to encourage diversity], and it all looks on paper like it’s happening. But actually, in their experience it isn’t happening, and they’re looking at the door thinking, “This company is just not for me.” What are the kinds of barriers in big companies, and what are the routes through for talented women? How do they call that out and try to be heard, in a system which is a big piece of machinery, when you’re sitting there as a leader of a big organisation? And how do you [Keith] find out about that if that’s going on?
KA: We’ve got a lot to learn. And part of the power and the purpose of the [Energy Leaders’] Coalition is that we actually start sharing and learning from each other, and pushing and challenging each other as well, because I’m sure there’s much more we can do as a company.
Some of the things we’ve started doing is setting up a network and making all sorts of diversity networks available. They’re run by people in the business who want to take part and make changes, and it gives them a voice to raise those ideas and those concerns. I sponsor the networks to allow them to raise issues and bring ideas forward. And most of what’s happening just now is not them raising issues, concerns or horror stories, but bringing forward ideas about change, doing things differently, ensuring open interviews, and ensuring that the candidate list for senior jobs and the interview panel has a gender balance. Those are all things that are easy to fix. They’re all absolutely within the control of the organisation and the company. I’m sure there are some horror stories out there, but we haven’t had many of them coming up through that route.
What we’re finding the network very useful for is bringing forward ideas and different ways of thinking. One concept that has come forward is to go beyond mentoring and coaching, to appoint sponsors for people, so that every senior woman or woman who is on the high talent list has an actual sponsor, to help them manage their career and to make sure they get all the opportunities they deserve. We’re also trying to make sure that we give some of the middle management women in the organisation the encouragement they need to go for the next big step. In the last two or three months, we’ve put Lindsay McQuaid in as Chief Executive of the renewables business. That’s probably the first ever female chief executive we’ve had in the company, which is good. It’s also quite horrific [that she’s the first] – but it’s a step forward.
Furthermore, we need to change the way we write job descriptions. There are some simple things in there that actually put people off. Because we tend to use quite aggressive, male-dominated language, which makes people think you have to work in a certain way to be successful if you want to go after that role. We need to change that language. We’re trying to make sure all the interview panels have a proper gender balance, and we’re hoping that those things will start to gradually change the culture in the company, make people more aware of the culture, and it will also change the results coming out of those interviews and out of those jobs.
The other great thing is that gender pay gap reporting is getting people talking. The whole topic of gender and diversity in our company has gone through the roof. There are people talking about it all the time, in terms of jobs, and careers, about who’s on the talent lists and succession lists. But we need to transfer that thinking and the nice talk into changing some practical things. Otherwise, it’s just nice conversations. But I am determined that we will make those changes and will see the benefit of that come through.
LK: You mentioned the Energy Leaders Coalition and being part of that. Why did you say ‘yes’ when we asked you to be part of that?
KA: Because I want to learn from other people. We don’t have all of the right answers, it’s as simple as that. I am helping kickstart a chief executive’s mentoring scheme in Scotland. We’ve got 20 chief executives from some of the biggest companies and biggest institutions in Scotland. And it’s a mixture of males and females who have all agreed to mentor three to four senior women from another company, to help them think of how they advance their careers. One of the things all of the chief executives who have taken part have said is that they also want to turn it into a forum where they can share ideas and learn from each other’s experiences, because there’s a huge amount for us all to learn. I think the Coalition will be good for that. I think it’s also good because it challenges you. If you’re on a coalition and there are ten other people on it, you don’t want to be bottom of the list next time the gender pay gap ranking comes out. A bit of healthy competition’s a good thing. A little bit of embarrassment factor is a good thing. It pushes people and encourages people. We need to use every tool and every trick in the box to push this through.
LK: And I think it also gives us an opportunity to start sharing some of the good stories. Whilst we’ve all got our heads down trying to make this agenda real, we’re not doing as much of that, which probably we should be.
KA: Yes. We need to emphasise the positive. There’s a huge amount of good stuff going on: setting up the Coalition; companies are already doing a lot of work; the gender pay gap reporting itself; setting up things like the CEO mentoring scheme; all of these things are gathering momentum and shifting it the right way. And at the same time, you still have a lot of work to do, all the way back down to primary school level, to try and make our sector look more attractive and more interesting.
LK: And it kind of feels now like the timing’s good. I don’t know if you feel that as a CEO, with all the external drivers that are coming at you, when you look at the business, the investors, stakeholders, communities, customers, do you get a sense that the time is now, it’s just no longer acceptable to not be tackling this properly?
KA: Absolutely. And again, for the industry, for our company, I think that’s an opportunity to be seen to be doing something right. As an industry, we would quite often make ourselves a bit of an easy target, because of some of the things we do and some of the things we’re involved in, for people to criticise us. Well, here’s an opportunity to show a bit of leadership, and actually take a step ahead of other sectors out there. And we have a lot of advantages against those other sectors. Because this industry is going to go through so much change, there are so many opportunities to bring people into our sector: those with digital skills, with different social backgrounds and social skills. That’s a fantastic opportunity. And we need to go and grab that with both hands. I think this is an absolutely fantastic time, in terms of the general environment and atmosphere around these issues, to do it… My view is that the next two years are going to be tough and really difficult. We have price caps, a real transmission renegotiation, difficulties with onshore wind, the general environment around Brexit; life’s quite tough. If you look at it and flip that, there’s an opportunity in the next two years to get our house in order and get ourselves positioned for four or five years from now, in terms of tackling the new energy world. Time to get diversity fixed.
LK: So would that be your message to your peers, to your other CEOs in the sector, what would you say to them?
KA: Yes, just pick up the challenge.
LK: Be brave.
KA: Let’s have a competition.
LK: We have four kind of key audience groups that POWERful Women tries to concentrate on. CEOs clearly is one of those, and you’ve sent a very clear message to them. Loud and stern. What about senior managers? Let’s just talk a bit about them. What is your message to those who have leadership responsibility within an organisation and can really implement some of this change and the pace of some of this change?
KA: There are a couple of messages. One is: be open to the change that’s coming through, don’t be defensive about it. And be open to the fact that you need training. We’re rolling out some unconscious bias training and it was really interested listening to the lady who came to head up some of that seminars for us. The first thing she said was, “This isn’t about fixing you. We’re not here to make you better. We’re just here to help.” To help open up people’s minds, and to help them see the mistakes they’re making. People aren’t doing it deliberately, so we aren’t here to punish or criticise them, we’ve got to help them. The message to that managerial layer is, “We’re going to try to help you, because we want you to think differently, and we ultimately want to make your bit of the business, as well as your team’s and your performance, better. So be open to accepting help.” They also have to be open to working differently. Whether it’s flexible working, or if we chop and change the way we run teams; people need to be open to that, and they need to loosen the shackles a bit. We employ a huge amount of qualified, professional people. For God’s sakes, don’t treat them like children! They don’t need to be clocked in and clocked out. We can trust them.
LK: It’s the wrong measure.
KA: Yes. And if you want to get the best out of those people, you need to give them room to grow, you need to give them room to make mistakes and room to learn.
LK: What about the message to those who are championing this in HR departments and DNI and the people part of an organisation? What’s the message for them?
KA: To some extent the message to them is, “Don’t feel it’s just up to you and your job.” I think this is the thing we’re doing with the networks and in our company. Diversity can’t be seen as a human resources problem. This has to be something that the business deals with. It has to be something the employees in the company help change and help drive. We need to change the entire culture, and you can’t do that through an HR team. To some extent, for the HR people, it’s to give up a little bit of the control around this. Don’t try and direct, drive and own it all. You need to push that out into the businesses. You need to get managers bought into it. You need to get the network structures correct to allow those conversations to take place and allow the messages to come back up to senior levels in the company, and if you try and control or constrain that it just won’t work.
LK: And finally, the fourth audience aspiring to be the leaders in our sector, what would you say to them.
KA: Go for it! That’s easy to say, but if you want a mentor or a coach or some help, go and ask. The people I mentor in our company, I mentor because they’ve come and asked me. If you don’t come and ask, it won’t happen. what you tend to find is that, if you go and ask someone for some help or advice, 99 times out of 100 they’ll do it. And if you want or need a mentor externally, there are programmes available, I know you were running stuff today as well [at a conference hosted by POWERful Women]. Again, use that!
And the second thing is, it’s not about being overly confident, banging through the door and saying, “I’m God’s gift, I can do everything.” But, don’t undersell yourself. The number of times when I’ve spoken to some of the really good women in reasonably senior positions in our organisation who were thinking about whether to go for the next role, they will give me ten reasons why they can’t do it. We really need to stop that. You need to think about, what’s your sales pitch? What can you do, what can you deliver? Quite often you might be the only woman going for a role, with two or three men going for it too. I’ll guarantee you’ve got five or six skills that they don’t have. Emphasise those. Don’t tell me what the men can do better than you.
LK: Flip it around.
KA: Yes. Tell me the five things you can do that they can’t do. It’s not about walking through the door saying you’re brilliant, you’re fantastic, you can do everything. But I guarantee you you’ve all got skill sets that the opposition don’t have. That’s what you need to push and focus on.
So, flip that around and go for it. Push yourself forward, get a mentor, get a sponsor, use networks. If there isn’t a network in your company, set it up, don’t wait for somebody to come and ask. We spoke to a couple of people early on in Scottish Power as to whether there’d be an interest in setting up a network. One of the ladies has taken it on and been overwhelmed by the support she’s got, by how many people want to get involved, and by all the ideas that are coming forward. So, I’d really encourage you, go and do that. You’ll find there’s a massive amount of support out there. Again, it’s not people wanting to moan, complain and raise a whole load of issues, but people who’ve got fantastic suggestions about how to run the company better, and how to change the culture of the company.
LK: Keith, fantastic advice, thank you very much indeed.