Out of the shadows

An increasingly complex regulatory environment, pressures on costs, the expansion of rapid-growth markets and the need to upgrade infrastructure mean today’s utilities must be highly flexible and agile yet retain a sharp focus on cost containment and efficiency. Overcoming these challenges brings the role of Chief Operating Officer (COO) to the fore. COOs with the right skills and the willingness to reinvent their roles can be the ideal candidates to lead their organizations through this difficult environment and drive the vision for future growth.

A broader role

Large and complex utilities are even more reliant on the skills of strong operational leaders. We find it is common in the power and utilities industry for two or more people to hold positions at levels of influence equivalent to that of the COO but with a variety of titles: operating company president, functional president and so on.

Despite the split into different functions, these executives manage operations that are easily as large and complex as those of an individual COO within other businesses. Thus, those who hold COO roles within P&U companies tend to have broader, and perhaps more significant, roles than peers in other industries. Not only are they responsible for capital expenditure budgets that run into the multiple billions of euros or dollars, they must also guard against operational failure, ensure the safety and reliability of supply and manage relationships with regulators and other authorities. Furthermore, they often have to operate across multiple jurisdictions, juggling local and regional concerns, while maintaining one consistent direction for authorities. Furthermore, they often have to operate across multiple jurisdictions, juggling local and regional concerns, while maintaining one consistent direction for their company.

Changing perceptions

While P&U COOs face many challenges, the demanding environment in which they operate also presents opportunities to add value across a broad range of areas. But they must first change perceptions about their role, proving they can go beyond “keeping the lights on” to influence corporate strategy and further broaden their role. Key areas in which the COO of a P&U companies can add value include:

  • Driving cost optimization: as revenues are squeezed by sluggish growth rates and decreasing allowed returns on equity (ROE), COOs have opportunities around improving operational efficiency and maximizing achieved ROEs.
  • Bringing a unique perspective: as overseers of their particular arms of the businesses, P&U operational leaders can break down functional and geographical silos, and identify ways of driving efficiencies and adopting leading practices across their organizations. This is particularly important for companies that span multiple jurisdictions.

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