Background and challenge
An American multinational energy company and leading oil refiner was interested in launching a new division supporting the energy transition. The aim was to capture growth from new markets, mitigate risks to the core business and support the global economy transition to a lower-carbon ecosystem.
To accomplish this, the company first needed to assess its current state and future positioning for success in new energy markets. From there, management needed to set the strategic direction for the new division and build momentum for a successful launch of the group.
Approach and recommendations
We started by interviewing senior leaders of the client team. The interviews captured a full understanding of the activities and opportunities in new energy markets that the business was already pursuing. In parallel, we developed perspectives on how other companies paved their way into these new markets, identifying key lessons for the client.
We shared our findings with the client’s leadership team in preparation for a leadership workshop. The workshop’s goal was to align leaders on key enablers and risks facing the new division as it entered a new market landscape.
L.E.K. partners facilitated the leadership workshop. The agenda began with an assessment of the current state and future state positioning for the new energy transition division. After that, the leadership team turned to goal setting and alignment on the 2030 vision. Finally, the team identified gaps to achieving the vision and discussed how to balance the success and failures of entering adjacent spaces.
As part of the key recommendations, the workshop highlighted the importance of applying a strategic portfolio management approach to investments in new energy opportunities to manage technology, market and regulatory risks. This recommendation was further reinforced with an interactive simulation conducted as part of the executive workshop.
We provided the company with a comprehensive post-workshop report to support the new division’s leadership. The report summarized the workshop and laid out considerations for the division’s strategic direction — including challenges, risk mitigation strategies and ways to sustain the momentum built by the leadership workshop.