The Skill C&I Energy Executives Need to Drive Change
People don’t buy what you do; they buy why you do it. And what you do simply proves what you believe, Simon Sinek, author and speaker, pointed out this seminal fact in his book, Start with Why: How Great Leaders Inspire Everyone to Take Action.
Advocating for, or more aptly, selling, a new energy strategy – particularly if it is one that flaunts a lot of the tacit or explicit rules of your organization – requires herculean negotiation skills. Good negotiators are effective because they identify upfront what the key parties value – and keep the details focused on supporting those fundamental beliefs. In this case, here are four things to consider as you lay out your path:
1. Know Your ‘Why’
“What are my own values? Why do I care about this strategy? What will it achieve for me? For my organization? For the world?” These are not irrelevant, fluffy, questions. Knowing why the path you are defining for your organization matters and is essential to articulating its benefits, or the lack of other options. For me, working professionally in a field that creates a brighter future for my children and other children around them is a requirement. Knowing I’m doing all I can to give my three children every chance of happiness and fulfillment gets me out of bed every day; ready to face whatever barriers stand in my way.
2. Know the ‘Why’ on the Other Side
Barriers to a new idea often come in the form of a person seems to have an issue with the data – but in fact, the issue may be more emotional or cultural.
What are your organization’s corporate values? What other initiatives are people getting behind and why? Perhaps individual naysayers have unspoken beliefs and assumptions that are influencing their reaction to your proposal. They may have past professional experiences that lead them to assumptions about your proposal that may not be accurate. Until you understand and can come to the place where they live, you may be throwing darts at a wall. Try to understand individual perspectives one on one prior to making a group pitch. Spend time listening before you pitch.
3. Dig Deep into the Fine Print
Understanding important influencers and decision makers’ goals and values matter – but of course, you also need to justify the business decision you are proposing. You need to understand this both quantitatively and qualitatively.
Qualitatively, you can map out what your competitors are doing, what NGO and industry pressure you may be under, and how a renewables strategy may serve your organization’s values and business strategy. Quantitatively, you will need to understand key contract structure. In the case of a Virtual Power Purchase Agreement (VPPA), for instance:
• Market historical and forward pricing in the deregulated market you are contemplating participating
• Roles and responsibilities of market players such as project developers, consultants, market regulators, your utility(ies) and your finance, accounting, and legal obligations in such a transaction
• Potential financial and legal upside and downside to which you may be exposed in comparison to the alternative (procuring directly from your utility(ies)
• The key construction, finance, legal and market risks faced by your counterparty so that both of you achieve the desired outcome – a financially advantageous renewable energy project generating energy and RECs as expected
• The standard contract structure and expectations in these types of transactions; and how they may conflict with your organization’s existing implicit and explicit policies and biases
4. Seek Help
All of these items can seem overwhelming and out of reach for the average one-person-band trying to push this project (and many other groundbreaking changes) uphill. It is vital that you execute this process with strong procurement principles, namely, asking the right questions. While you might seek consultants or others to guide you in this process, be aware of any biases or financial incentives.
Ultimately, you must ensure your partners, consultants and vendors:
• Have experience guiding clients like you in a similar state of maturity. Are they willing to articulate and model not only the potential upside but also the potential risks?
• Are transparent about their fee structure/options and what drives increased fees (i.e. what are their incentives?)
• If you already have a broad energy strategy and know that you are ready for a transaction in a specific geographic market, it may be sufficient to work with a broker-type consultant who focuses primarily on that type of transaction like a VPPA.
• Your experience and needs will change over time. Do not get locked into broad exclusivity clauses without clearly defining boundaries of any one service providers’ contract.
You need partners who can work with you toward the solution that best meets your organization’s needs: financially, reputationally and managerially. At BayWa r.e., we can extend our expertise and co
mbined decades of experience in the market to serve as a trusted guide or
recommend the right partners for you to work with, which I share some of our experience in this video. We are committed to supporting you and your organization with the best energy solutions and to reducing carbon in the world.
Next month, our EVP of Development, Vitaly Lee, will speak just to how powerful new technological innovation can be for your organization. Check back at the beginning of the next month to read more.