E&u ceo study perspective final 0515ss

© 2010 IBM Corporation

Energy and Utilities Industry Perspective

May 2010

IBM Institute for Business Value

© 2010 IBM Corporation2

Insights from the IBM Global CEO Study 2010 – Energy and Utilities Industry Perspective

The Global CEO Study 2010 is the fourth biennial CEO study, building on our insights and findings over the last 6 years

1,541 CEO interviews

2010Capitalizing on Complexity

Key Findings Rapid escalation of

complexity creates need to: Embody creative

leadership Reinvent customer

relationships Build operating dexterity

2008 Enterprise of the Future

1,130 CEO interviews

Key Findings Hungry for change Demanding customers as

opportunity to differentiate Extensive business model

innovations Moving towards global

business designs

2006Innovation

765 CEO interviews

Key Findings Business model innovation

matters External collaboration is

indispensable Innovation must be

orchestrated from the top

2004Your turn!

456 CEO interviews

Key Findings Revenue growth is the

number one priority Responsiveness is a new

key competence Improving internal

capabilities is a first step toward growth



In this largest known sample of face-to-face CEO interviews, we spoke with over 1,500 CEOs and public sector leaders, 60 in E&U

The study represents organizations in 60 countries and 33 industries

Note: The CEO response sample has been weighted based on 2008 Actual Regional GDP of the IMF World Economic Outlook, October 2009; Growth Markets include Latin America, Asia Pacific (excluding Japan), Middle East and Africa

13%Communications

25%Distribution

18%Financial Services

24%Industrial

20%Public 25%

Growth markets*

21%North America

42%Europe

12%Japan

Sectors Regions



We spoke with CEOs to define leadership in the New Economic Environment

Leadership in the New Economic Environment:

Reality of the new complex and uncertain world

Creating advantage out of complexity

Leading and executing through uncertainty

Sample consists of private sector CEOs (80%) and public sector leaders (20%)

Representative sample across 60 nations and 33 industries

Private sector organizations with revenue over US$ 500 Mn in mature and over US$ 250 Mn in rapidly developing markets; public sector organizations with over 1,000 employees

Scope

Face-to-face interviews with 1,541 CEOs using a structured questionnaire

The CEO response sample has been weighted based on IMF 2008 actual Regional GDP

Approach

Statistical analysis of 23 questions and the related 66 discrete factors

In-depth financial analysis based on short-term and long-term revenue and operating margin growth where available

Comprehensive review and analysis of some 10,000 interview quotes

Analysis



Agenda

CEOs must navigate in a highly volatile, increasingly complex environment

- Massive global shifts increase uncertainty

- Continued rise of technology as key external factor

- Challenges are compounded by regional differences

Standing out in a complex world

- Embody creative leadership

- Reinvent customer relationships

- Build operating dexterity

Seizing the upside of complexity



E&U is strongly differentiated from most other industries on many of the CEO Study factors...

Identified environmental issues as a top external factor in the next three years

View sustainability as a top factor impacting the business in the next 5 years

Expect bigger government and heavier regulation in the next five years

Focusing on increasing the share of variable cost in the business

Placing emphasis on simplifying products and operations

Focusing on quick decisions vs. thorough decision processes

Identified globalization as a top external factor in the next three years

Views on the future: E&U CEOs vs. All Participants

92%70%

48%29%

32%18%

21%68%

59%95%

23%3%

All Participants E&U

E&U Rank*

1

1

1

19

19

20

20

* of 20 major industries in 2010 CEO Study

62%

34%



... but in 2010, we have begun to see some convergence toward more common cross-industry expectations

Believe that people skills and talent shortages will need focus in the next five years

View increases in complexity and uncertainty as likely

See industry transformation as a driving factor in shaping the business over the next five years

Expect an “information explosion” to transform the industry

Believe technological change will be a top external factor in the next three years

Balance top-down communication with viral communication in the organization


79%74%

62%66%

61%59%

Views on the future: Energy and Utilities CEOs vs. All Participants

39%38%

39%33%

81%88%



Market, technological, and macroeconomic forces are the key external factor for CEOs across all industries…

Three most important ‘external’ forces over the next three years for all CEOs



… but E&U CEOs see the world in a markedly different way, with environmental and regulatory concerns far outdistancing the others

Three most important ‘external’ forces over the next three years


56%28%

39%38%38%38%

37%25%

35%63%

23%3%

21%68%

19%12%

9%8%



There are differences in this year’s E&U CEO responses across regions, but “regulatory concerns” appears in the top four everywhere

Top four “external” factors for E&U CEOs over the next three years

North America

• Regulatory Concerns

• Environmental Issues

• Macroeconomic Factors

• Technological Factors

Central/South America




• Market Factors


Europe




• Market Factors

Asia-Pacific


• People Skills





The vast majority of CEOs, including those in E&U, perceive the New Economic Environment as distinctly different

More volatileDeeper/faster cycles, more risk

More uncertainLess predictable

More complexMulti-faceted, interconnected

Structurally differentSustained change

18%13 69%

21%14% 65%

22%18% 60%

21%26% 53%

The New Economic EnvironmentAll Participants

22%12 66%

17%17% 66%

22%13% 65%

20%28% 52%

Energy and Utilities

Not at all/to a limited extent To a large/very large extentTo some extent

““We are entering an era of ten to twenty years of new significant investment. There is opportunity and uncertainty that we have not seen before.”

Utility President, United States



Sustainability concerns will affect almost all E&U companies; two-thirds of E&U CEOs also expect substantial industry transformation

62%

61%

59%

Industry transformation

58%

Information explosion

Sustainability

Shorter time cycles

Talent shortages

Factors impacting your organization to a large extent over the next five years

Insights from the IBM Global CEO Study 2010

58%

Shifts between mature and rapidly developing

markets

Shift between public and private boundaries

Shift between global and local markets

Scarcity of natural resources

50%

38%

36%

29%

66%

59%

95%

44%

47%

25%

47%

16%

57%




A strong majority of CEOs are working with high complexity – and that complexity is expected to become even more pronounced

79%Expect high/very high level of complexity over the next 5 years

60%Currently experiencing high/very high level of complexity

Experienced and expected level of complexity

74%Expect high/very high level of complexity over the next 5 years

65%Currently experiencing high/very high level of complexity 14%

more

All Participants


32%more



CEOs are now challenged to close the complexity gap and use complexity to their advantage

79%

49%

Expect high/very high level of complexity over 5 years

Feel prepared for expected complexity

30%Complexity gap*

Expected level of complexity and preparedness to handle

All Participants

74%

50%

Expect high/very high level of complexity over 5 years

Feel prepared for expected complexity

24%Complexity gap*


* Complexity gap = difference between expected complexity and the extent to which CEOs feel prepared to manage complexity

“Ten years ago it was easier to predict what the next ten years would be like...the rules have changed. The rate of change adds to the complexity -- we have a harder time seeing the future..”

Utility CEO, United States



Complexity challenges are compounded by regional differences

CEOs in North America expect “big government” and more regulation

North America

EU

China

Japan

87%

70%

53%

50%

61%China

Japan

EU

North America

42%

33%

33%

CEOs in China see “global thinking” as a top leadership quality

Japan

North America

China

EU

74%

49%

48%

43%

CEOs in Japan are most impacted by the shift in economic power to growth markets

EU

North America

Japan

China

45%

58%

71%

78%

CEOs in the European Union are least impacted by talent shortage



Agenda




- Complexity challenges are compounded by regional differences








We identified Standout organizations that delivered superior performance over both the long term and recent short term

Lo

ng

-te

rm,

stea

dy-

sta

te

per

form

anc

e

Short-term,crisis performance

Performance Analysis Framework

Top 50 percent

Long-term Performance4 Year Operating margin CAGR (2H03/1H04 – 2H07/1H08)

Short-term Performance1 Year Operating Margin Growth Rate (2H07/1H08 - 2H08/1H09)

Standouts

Top

50

perc

ent



Even in the challenging 2008-2009 period, Standouts grew revenue as well as operating margin

5%

0%

-5%

-10%

-15%

5% 10%

Others

Overall Standouts

RevenueCAGR

OperatingMargin CAGR

5%

0%

-5%

-10%

-15%

5% 10%

Others

Overall Standouts

RevenueGrowth

OperatingMargin Growth

10% 10%

Long term performance(4 year: 2H’03/1H’04 – 2H’07/1H’08)

Short term performance(1 Year: 2H’07/1H’08 - 2H’08/1H’09)

15% 15%

Note: Long-term Performance: 4 year operating margin and revenue CAGR (2H03/1H04 – 2H07/1H08); Short-term performance: 1 year operating margin and revenue growth rate (2H07/1H08 - 2H08/1H09);



Standouts are also better prepared to manage the expected complexity

Complexity gap*

Note: Long-term performance: 4 year operating margin CAGR (2H03/1H04 – 2H07/1H08); Short-term performance: 1 year operating margin growth rate (2H07/1H08 - 2H08/1H09)

“Climate change and renewable energy are complex issues that we will have to manage.”


* Complexity gap = difference between expected complexity and the extent to which CEOs feel prepared to manage complexity

Lo

ng

-te

rm,

stea

dy-

sta

te

per

form

anc

e

Short-term,crisis performance

Top 50 percent

Standouts

22% Gap 6%

Gap

52% Gap 35%

Gap

Top

50

perc

ent



Standouts capitalize on complexity in three ways

• Creativity is a critical leadership quality• Drive change in the organization to

stay ahead of markets and use of wide range of communication styles and tools

• Break with status quo of industry, enterprise and revenue models

• “Getting closer to customers” is the single most important theme

• Better understand customer needs through collaboration and info sharing

• Exploit the information explosion to deliver unprecedented customer service

• Simplify operations and products to better manage complexity

• Use iterative strategies, make quick decisions and execute with speed

• Exploit partnering to increase agility; increase cost variability and integrate globally where possible



• Creativity is a critical leadership quality• Drive change in the organization to

stay ahead of markets and use of wide range of communication styles and tools

• Break with status quo of industry, enterprise and revenue models




CEOs stress the importance of integrity, change, and creativity

Which are the most important leadership qualitiesover the next three years?

Change

Creativity

Integrity

“So many other things fail when integrity gets out of whack.”


“Technology, especially with the implementation of Smart Meter and Smart Grid components will radically change how we operate, generate significantly more information, and change the way customers use and consume electricity.”


“We need to be flexible, not sticking to traditional ways of thinking. Creativity and proactive discussion are required.”

Utility Executive Director, Japan



E&U CEOs see creativity and influence as critical leadership qualities that must be guided by strong ethical principles to ensure success

60%

52%

35%

Creativity

Integrity

Global thinking

Top three leadership qualities over the next five years

All Participants


47%

63%

43%

Creativity

Integrity

Influence

“Authority has to be earned through trust and trust comes from integrity and openness.”


“We need to be flexible, not sticking to traditional ways of thinking. Creativity and proactive discussion are required.”


“Influence is critical in a regulated environment with a heavy national/political agenda.”

Utility CEO, Europe



However, the most valued leadership skills differ widely across regions

North America

• Integrity

• Creativity

• Influence

• Dedication/Openness

Central/South America

• Integrity

• Influence

• Global Thinking

Europe

• Influence

• Creativity

• Focus on Sustainability

• Integrity

Asia-Pacific

• Focus on Sustainability

• Integrity

• Creativity

• Fairness

Top leadership qualities over the next five years by region



Creative leaders are more prepared to break with the status quo of industry, enterprise, and revenue models

Deep dive analysis: CEOs that selected ‘creativity’ as a crucial leadership quality

Innovation ascrucial capability

81%more

... And they are more likely to pursue all types of business model change

Creative leaders rate innovation more highly as crucial capability...

60%

52%15%

more

Enterprise model

57%

52%10%

more

Industry model

54%

45%20%

more

Revenue model

38%

21%Creatives

“In the next five years, innovation will radically change how we run our business more than anything else.”

Utility General Manager, United States

Others

Creatives

Others

Creatives

Others

Creatives

Others



E&U leaders are moving forward with leadership styles and balanced communication approaches embraced by Standouts

13%8% 79%

25%17% 58%

Continuouschange

Ad-hocinitiatives

Persuade andinfluence

Commandand control

28%33% 38%(Managed) viralcommunication

Top-downcommunication

Standouts realizing rapid change over the next five years

13%5% 82%Continuouschange

Ad-hocinitiatives

18%12% 70%Persuade andinfluence

Commandand control

38%28% 34%(Managed) viralcommunication

Top-downcommunication

Standouts

E&U

Standouts

Standouts

E&U

E&U



“While timely and thorough decision making is important, optionality is a key to success for us in the past. This strategy may be slower paced, but it is a winning strategy for us.”

Utility General Manager, United States

E&U CEOs rely more on thorough decisions than quick decisions, unlike CEOs in many other industries…

Ways to achieve rapid change over next five years: Decision Making

42%25% 33%

Total Sample

45%37% 18%

E&U

Thorough decisions Quick DecisionsBoth



...but those who value creativity as a top leadership trait are as likely to favor thorough decisions as those who do not

Preference for thorough decisions among Energy and Utilities CEOs

36%

E&U CEOs valuing creativity more highly*

38%

E&U CEOs valuing creativity less highly

* More highly = in top three of leadership qualities important for the next five years



So what builds creative leadership?

Embrace ambiguity: Reach beyond silos, exemplify breakthrough thinking, act despite uncertainty.

Take risks that disrupt legacy business models: Pilot radical innovations, continually tweak your models, borrow from other industries’ successes.

Leapfrog beyond “tried-and-true” management styles: Strengthen your ability to persuade and influence, coach other leaders, use a wide range of communication approaches.

Recommendations

How will you develop the critical capabilities to enhance creativity among your leadership?

In what ways can you explore, reward and integrate diverse and unconventional points of view?

What is your approach to evaluating every element of your business model to get the most from currently untapped opportunities?

How will you leverage new communication styles, technologies and tools, both to lead a new generation of talent and to encourage breakthrough thinking?

Tough questions to consider




• “Getting closer to customers” is the single most important theme

• Better understand customer needs through collaboration and info sharing

• Exploit the information explosion to deliver unprecedented customer service



‘Getting closer to the customer’ is a priority for firms across all industries – and even more important for Standouts

83%

Others

Overall Others and E&U vs. Overall Standouts

Getting closer to the customer

72%

E&U

95%

Standouts

“Our customers have an unusually high technology adoption rate; we are sharing more power and heating information directly to clients using Facebook and Twitter.”


“To surprise customers requires unexpected ideas through interactions of people with diverse perspectives.”

Shukuo IshikawaPresident and CEO, Representative Director, NAMCO

BANDAI Holdings, Inc., Japan



This will become critical for E&U companies as the nature of value exchanged between providers and customers becomes more complex

Traditional Industry Value Model

Sources: Valocchi, Michael, John Juliano and Allan Schurr. “Switching perspectives: Creating new business models for a changing world of energy.” IBM Institute for Business Value. 2010; Jansen, W., W. Steenbakkers, and H. Jagers, New Business Models for the Knowledge Economy, Gower Publishing, 2007.

Emerging Industry Value Model

At the same time customers are becoming more demanding, they actually have much more to offer in reciprocal value to energy and other product/service providers.



CEOs want to better understand customer needs, offer new services, and collaborate more; those in E&U also focus strongly on social responsibility

82%Better understanding of needs

70%New or different services

69%More collaboration, info sharing

61%New or different products

51%New or different channels

46%Increased focus on social responsibility


CEOs’ view of where customer expectations will change to a large extent

81%

63%

64%

39%

39%

58%

“Customers will be more and more concerned and demanding about the whole product value chain, especially regarding environmental impact.”

Utility CEO, Europe



To stay in lockstep with customers, Standouts maintain a better understanding of preferred channels and price-value trade offs

42%

Others

58%

Standouts

Focus on price-value equation

38%

45%

Others

51%

Standouts

Use of new or different channels

13%

39%

E&U

51%

Standouts

31%

Overall Others vs. Standouts

E&U vs. Overall Standouts

Overall Others vs. Standouts

E&U vs. Overall Standouts

42%

E&U

58%

Standouts

38%more more more more



Customer-centric CEOs intend to exploit the information explosion to better understand and serve customers

49%

OtherCEOs

63%

Customer focusedCEOs

Impact on organization ofinformation explosion

29%more

66%

OtherCEOs

78%

More focus on insight and intelligence

to realize strategy

18%more

Customer focusedCEOs

Deep dive analysis: CEOs that scored high or very high on ‘getting closer to the customer’

... to generate insight and intelligenceCustomer focused CEOs use data...

“… but those efforts are limited yet, and we need further action for this to generate needs from seeds.”


“We analyze Voice of the Customer data collected at customer centers in order to properly understand consumer needs…”



So how do you reinvent customer relationships?

Honor your customers above all else: Focus as never before, make it easy for customers to connect with the right employee and measure what customers value

Use two-way collaboration to sync with customers: Make customers part of your team, solicit customer wants, co-innovate and interact with customers in new ways, deliver true process transparency.

Profit from the information explosion: Tap the value of limitless data, use analytics to translate data into insight into action that creates business results, share information freely to build trust and improve customer relationships.

Recommendations

How will you engage customers in new ways that increase interest and loyalty to generate new demand and revenue sources?

How can you involve customers more effectively and directly in product and service development?

Can you hear the voice of your customers through the vast amount of data? Can you understand and act upon the information?





• Simplify operations and products to better manage complexity

• Use iterative strategies, make quick decisions and execute with speed

• Exploit partnering to increase agility; increase cost variability and integrate globally where possible



Revenue from new sources will emerge from new business models; three elements of dexterity will be required to leverage them

30%

25%

Next 5 years

Revenue generated from new sources

“For new sources of revenue and value… be inspired, viral, and decentralized.”Utility CEO, Europe

Deep dive analysis: CEOs that selected ‘iterative strategies, quick decisions and execute with speed’

20%more

20%

15%

Last 5 years 33%more

Dexterous CEOs

Others

Dexterous CEOs

Others



E&U CEOs already are near Standout levels of performance in their reliance on an iterative approach to strategy...

Ways to achieve rapid change over next five years: Iterative Strategy Processes

64%

Others

74%

Standouts

16%

Overall Others vs. Standouts Energy and Utilities vs. Overall Standouts

69%

E&U

74%

Standouts

7%more more



… and their speed of execution of these strategies

39%

Others

45%

Standouts

16%more

Most crucial capabilities for execution success over the next 5 years:Execution Speed

“The aim is adaptability, the tool is execution speed.”

Dr. Faruk YarmanGeneral Manager, Havelsan, Turkey

E&U Standouts

10%more

41%45%

“Leaders are seeing the changes - however, the personnel have not yet incorporated them. The speed of changes must still be increased.”

Utility CEO, Europe

Overall Others vs. Standouts Energy and Utilities vs. Standouts



“The consequences of making bad decisions last for a very long time. We have to be very risk averse -- but the world is speeding up, so we have to make faster, thorough decisions.”


However, a shift toward faster decision making – another trait of Standout organizations – will need to occur

Ways to achieve rapid change over next five years: Decision Making

28%

Others

43%

Standouts

54%

Overall Others vs. Standouts Energy and Utilities vs. Overall Standouts

18%

E&U

43%

Standouts

139%more more



Standouts are also able to simplify operations and products to better manage complexity

47%

Others

61%

Standouts

Changes to operating strategy: Simplify

30%

Overall Others vs. Standouts Energy and Utilities vs. Standouts

29%

E&U

61%

Standouts

110%more more

“There is a duality – the ability to manage a more complex customer demand, but simplify operations (and associated costs) at the same time.”

Utility CEO, Europe

“Simplification and standardization are key strategies that we have been using for several years to reduce existing and future complexity.”

Brenda Barnes, Chairman and CEO, Sara Lee, United States



So what are the steps to build operating dexterity?

Simplify whenever possible: Simplify interactions with customers, simplify products and services by masking complexity, simplify for the organization and partners.

Manage systemic complexity: Put complexity to work for your stakeholders, take advantage of the benefits of analytics.

Promote a mindset of speed and flexibility: Act quickly, push execution speed, course-correct as needed.

Be “glocal”: Leverage the world through partners, constantly tune your operating model – global where possible, local where necessary.

Recommendations

In what ways can you simplify processes, without ignoring underlying complexity, and develop the agility required to execute rapidly?

How can your organization benefit from taking on more complexity on behalf of your clients or customers?

How will you integrate and analyze timely information to gain insight, make quick decisions and enable dynamic course correction?

Have you implemented asset and cost flexibility and defined partnering strategies to compete in your chosen markets?




Agenda




- Complexity challenges are compounded by regional differences








Taking advantage in the New Economic Environment

HandleUncertainty

Deal withVolatility

Leverage Complexity

Be comfortable with ambiguity, act despite uncertainty, generate unexpected ideas

Use predictive analytics to anticipate customer needs, model customer scenarios

Develop flexible organizations and processes that are ready to constantly adapt and course correct

Break status quo to lead and benefit from industry transformation, convince and communicate with passion

Interact directly to tune into rapidly changing customer preferences

Leverage global capabilities to quickly adapt to shifts in local markets

Find non-linear solutions; create cross-silo teams, encourage interconnected thinking

Give customers direct access to everyone in your organization, and direct access for everyone to customers

Simplify operations, services and products for your customers, your organization and your partners

Reinventcustomer

relationships

Buildoperatingdexterity

Embodycreative

leadership



IBM has provided perspective on these themes in its last three Energy and Utilities IBV papers, including a new one in 2010

Embody creativeleadership

Embody creativeleadership

Reinvent customerrelationships

Reinvent customerrelationships

Build operatingdexterity



In the near future, E&U CEOs will be forced by dramatic industry change to increase their organizations’ dexterity

Sources: Valocchi, Michael, John Juliano and Allan Schurr. “Switching perspectives: Creating new business models for a changing world of energy.” IBM Institute for Business Value. 2010

This will be necessary to handle rapid regulatory, technical and customer change, and capture revenue growth from new business models.



To respond to this, industry model innovation will be a particularly strong area of focus for E&U CEOs over the next five years...

Impact of industry transformation over the next five years: E&U companies

32% 66%

Focus on industry model changes over the next five years: E&U companies

40% 60%

0%

The E&U executives surveyed expect that the percentage of revenue from new sources will double over the next five years.

2%

None Large to very largeMinor to moderate



A platform is a common structure and set of rules that provide a standard foundation for transactions among two or more parties

Platforms provide a means for providers and buyers of products and services to interact and create value that could not be created otherwise

The platform lowers the costs of providing services by offering some level of standardization for transactions and reducing duplication

Platforms can take different shapes– Physical (e.g., shopping malls, department stores)– Software/hardware (e.g., gaming systems, PC operating systems)– Consultative (e.g., financial advisors, home loan brokers)

A platform can be single-sided or multi-sided– In a single-sided platform, a merchant acts as the agent for one group of customers in negotiating

and procurement (e.g., Walmart, iTunes)– In a multi-sided platform, a common structure brings together two or more distinct parties, each of

whom is necessary to conduct a business transaction (e.g., shopping malls, eBay, Match.com)

The electricity network was one of the earliest technology platforms, providing a means for power generators to move their output to buyers, a means for buyers to accept delivery of the output, and a standardized technological specification.

Source: Evans, D., A. Hagiu, and R. Schmalensee, Invisible Engines, MIT Press, 2006; IBM Institute for Business Value analysis.

… and bring extraordinary change to the platforms on which energy providers operate



Sid

e 1

Sid

e 2

1Growth in the number of potential customers on Side One for complementary products and services on Side Two occurs

2This then leads to an increase in the quantity and diversity of complements made available by Side Two

3Because Side One users are favorably inclined to a wider variety of products and services on the other side, more to join the platform

4The increased number of users makes it even more attractive for Side Two to develop new complements

Multi-sided businesses, which provide benefits by increasing and capturing indirect network externalities, will emerge in E&U

Sources: Valocchi, Michael, John Juliano and Allan Schurr. “Switching perspectives: Creating new business models for a changing world of energy.” IBM Institute for Business Value. 2010; Eisenmann, T. and A. Hagiu, “Staging Two-Sided Platforms”, HBS Publishing, 2007.



There are numerous examples of multi-sided platforms outside the Energy and Utilities industry

Sources: Valocchi, Michael, John Juliano and Allan Schurr. “Switching perspectives: Creating new business models for a changing world of energy.” IBM Institute for Business Value. 2010; Eisenmann, T., G. Parker, and M. Van Alstyne, “Strategies for Two-Sided Markets,” Harvard Business Review, 2006; Evans, D., A. Hagiu, and R. Schmalensee, Invisible Engines, MIT Press, 2006.



We expect a wide variety of multi-sided platforms to develop in the industry in the near future

Source: Valocchi, Michael, John Juliano and Allan Schurr. “Switching perspectives: Creating new business models for a changing world of energy.” IBM Institute for Business Value. 2010.




Honor your customers above all else

Use two-way communications to sync with customers

Profit from the information explosion

Embrace ambiguity

Take risks that disrupt legacy business models

Leapfrog beyond “tried-and-true” management styles

Simplify whenever possible

Manage systemiccomplexity

Promote a mindset of being fast and flexible

1 2 3

Be “glocal”

Reinventcustomer

relationships

Buildoperatingdexterity

Embodycreative

leadership



Key contacts

John JulianoGlobal Lead, Energy and UtilitiesIBM Institute for Business [email protected] Tel. +1 240 361 8157

Michael ValocchiGlobal Lead Partner, Energy and UtilitiesIBM Global Business [email protected]. +1 610 212 9763

Ricardo KlatovskyE&U Industry Leader, Southern EuropeIBM Global Business [email protected]. +34 913 977 395

Visit the IBM Institute for Business Value (IBV) at: www.ibm.com/iibv/

Capitalizing on Complexity is available at:www.ibm.com/ceostudy

Switching perspectives is available at: www.ibm.com/services/gbs/switchingperspectives