Energy strategy as a competitive advantage

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Business people were challenged to respond to a catastrophic event in world energy markets, a terrorist attack on Saudi Arabian oil fields that would disrupt western oil supplies for two years.

They divided into groups to plan on how three different types of company would deal with an oil shock that meant they had to alter their long-term strategies as well a short-term response.

Although some of the participants were so disturbed by the crisis their organisations face that they could not think quickly, others managed to turn the crisis into an opportunity. An example was a bank that realised it could make more money than before out of financial volatility.

The Ubeus bank put together a crisis management team and immediately lobbied the government to ensure it had priority access to electricity. It put out a press statement on its continuity plans and decided to keep all its employees in place although it had to shut down parts of its branch network.

The bank’s marketing team devised a new slogan for the crisis: “The light has gone on at Ubeus” and it accelerated plans to save energy and reduce its carbon footprint by 30 per cent.

The team representing Engulf and Devour, a global media group, did not do half as well. They responded professionally to the short-term crisis: reassuring customers that their email and internet services would be quickly restored after power cuts and asking a quarter of employees to work for home.

However, they had a lacklustre longer-term strategy that hardly involved fundamental changes to the business model.

Lamelier, a global car company, took a different tack. It believed it had to switch from selling cars to “providing personal mobility solutions” to customers. It established a internet social network of customers and dealers, asking them to suggest ideas for what products they wanted in the new era.

It also offered to retrofit people’s cars for $300 each to make them more energy efficient, underwritten by the company’s credit arm. Lamelier’s managers got praise for acting so radically but some participants wanted to know what had taken them so long: why had they waited for a predictable energy crisis?

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