Diversity Management in the Energy Industry

Written by James O. Rodgers

Recent studies show a significant correlation between a culture of inclusion (which can be created with an effective diversity management strategy) and long-term business success. For example, in their book “The New Corporate Cultures: Revitalizing the Workplace after Downsizing,” Deal & Kennedy reported that strong inclusive cultures averaged 571 percent higher gains in operating earnings and 417 percent higher return on investment (ROI) than companies with weaker cultures over an 11-year period.

What did these successful companies do to produce such astounding results, and can power companies, which represent a traditionally stable industry, implement the same model to impact their bottom lines?

A critical strategic tool

Industries that change little over time sometimes argue that change initiatives, like diversity management, don’t apply to them. Nothing could be further from the truth.

First, diversity management is applicable to all industries that have people. Employees, customers and other stakeholders are diverse, and the complexity and tensions brought on by differences must be managed effectively to achieve maximum productivity. Secondly, as customer expectations rise, utilities that want to compete effectively must take advantage of diversity management as a critical strategic tool.

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We find that variety in ideas and experiences translates into a more innovative culture, which means excellent business results.It also provides greater opportunities for our employees to contribute and to flourish. The worst place in the world to work would be a place where we were all the same—a corporate house of mirrors. Customers and other stakeholders demand a lot from utilities, and those demands cannot be met by employees who are treated like commodities instead of assets. Honoring their diversity gives them the sense that they are valued and that their jobs truly matter. Then, they can satisfy customers and other stakeholders in innovative and creative ways while taking into account the technical and regulatory requirements of the business.

That is why organizations that create a culture of inclusiveness get much better financial results than those that do not.“We understand that diversity management is a key that unlocks our full potential and helps us achieve our goals,” says Allen Franklin, former CEO and president of Southern Company, an Atlanta-based super-regional energy company in the Southeast. “We are committed to making diversity a strategic asset for the success of our business.” Southern Company’s strategic diversity management plan is tied to “Southern Style,” a set of corporate values that send a clear message about how valuing diversity is expected and non-negotiable. “Diversity is one of Southern Company’s core leadership principles,” says Franklin. “We encourage diversity and value different backgrounds, perspectives and ideas.”

Another leader of strategic diversity management is Birmingham, Alabama-based Energen Corporation. Mike Warren, former Chairman and CEO, explains, “The first goal of our diversity initiative was to have our 1400 employees understand and value the differences they brought to the workplace so they could better serve our broad spectrum of customers. A second phase was to teach our supervisors and managers to value differences, as a way to manage diversity more effectively. Third, we created a Diversity Council, consisting of a broad spectrum of representatives from each of our geographic locations. “The Council serves as a sounding board for ideas and issues concerning diversity, trust and corporate culture. Its members help carry the message to all employees that diversity is a strength for our company. In addition, each location has a local diversity council. These local councils can apply for grants to support local diversity efforts. For example, one local council used a diversity grant to prepare and distribute a Spanish language work aid for their field people.”

Half-hearted attempts at diversity management usually lead to bigger problems than not doing it at all. Once expectations are raised, employees depend on leadership to fulfill this commitment to equity and employee empowerment. “Fully committed leadership is absolutely imperative,” says Warren. “Myself and other senior executives participate in Diversity Council meetings and diversity training.”

Getting 100 percent from all Since cultures inside the more stable industries are deeply entrenched, diversity management is harder work and may require a longer journey. It begins with a full understanding of the company’s culture, a commitment to look deep inside the organization and the courage to uncover and change what no longer works. Although there are no overnight successes, a deliberate and disciplined approach can render substantial victories.

When an energy company fully engages its people by honoring their diversity, the results are innovation and creativity with real bottom-line impact. It becomes the primary job of every manager to develop, support and encourage people and to define ways to make each employee’s strengths effective and his or her weaknesses irrelevant. This way, managers can get 100 percent from 100 percent of the people, 100 percent of the time. An inclusive culture allows everyone to contribute extraordinary effort, with confidence and commitment to the success of the organization.

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