Is your energy job safe?

A couple of days ago I had a conversation with a trader friend who has migrated into the consulting business. His journey was the result of a bit of involuntary arm twisting to be sure as this was not what he had planned for in his life, but the job market for traders is generally not stellar anymore.

My friend confessed to me that he had originally migrated into working for utility companies as he then thought that even if the pay there is much less – at least he would have job security. He turned out to be wrong.

Now is it almost 4 years since I have ventured out by myself to become a free-range, lean, and mean consultant. I must admit that I am not as lean as I wished for and the mean factor has completely gone by now as I have learned quite a bit over those years.

I was however much, much less inclined to have my safe bread and butter at any company than my friend and on the contrary was very willing to do something entirely new to get some oomph going back into my work life.

Back to the job market.

Anyone looking into building a trading company from scratch just about 4 years ago would have “hiring the right kind of people” as one of his top priorities. Then, decent and even some lousy traders were a priced commodity and they had to be wooed with lots of perks. Especially if you happened to be in some out-of-the-way place.

Try the same today and there are armies of traders that will kick in your front door to work for you and their demands will not be stellar anymore. That was quick – and it sends shivers down the spine of a lot of screen professionals.

But it goes much, much further. Traders will disappear as technology does them away and because the market is changing beyond recognition. We find out the hard way that computers do a better job at comparing indices and that humans simply don’t have what it takes to cut it in the Nanosecond world. But the transformation is much, much deeper than this.

It was assumed that the indices comparing jobs would be gone anyhow but that there is always some human recluse that would not be conquered by computers yet as it’s too complex – at least not for some time. It just seems that the transformation is much faster and deeper than we all assumed as yesterday’s exotic contracts are today’s research object and tomorrow’s normal. Computer programs have a way to deal with the irrational.

Energy companies are huge, bloated bureaucracies with watermelons as headquarters and armies of Middle Managers from the Senior Vice President to the Department Head trying to keep armies of worker bees in check. More than a decade of fat years (that’s what high energy prices are to them) has made them look and dance like a puffer fish.

They face the slim times now which is the official reason for anyone who gets the boot during downsizing. In truth and deep down, there is another mechanism at play.

Competition makes sure that the sickest players go down the drain and the fittest will dominate the energy world in some years from now as they will use technology to become better, slimmer, and more cost-effective and they get into the business of developing the new, better energy mousetrap. But that’s not what they are doing today.

Larry Page once said in an interview “We don’t have as many managers as we should, but we would rather have too few than too many.”

The 20th century has seen the meteoric rise of the Middle Manager. It also saw the growth of the giant corporation which made armies of those Middle Managers necessary in order to build the corporate ladder which in turn was a necessity to exert control. The Peter Principle at its best. In theory, at least, everyone rose to the level of his/her incompetence. I never fully subscribed to the Peter Principle as I think that there are other factors such as relationships and backscratching in play but let’s stick with the simple thing for the sake of this blog post.

Today, technology makes the Middle Manager obsolete as for the first time it’s possible to use new collaboration tools to build very flat hierarchies where the leaders work directly with the teams. That’s the way it should have been from the beginning but how do you manage this when you have 20,000 people under your helm? The thick layer of management between those leading and those doing the crazy stuff is being demoted, outsourced, replaced by technology and eventually, they get fired as they are as necessary as an athlete’s foot.

This can be scary as it turns the corporation as we know it (oh yes, your utility is exposed to it just as well) on its head. Visionaries on the one side and apprentices on the other can cooperate again as it was hundreds of years ago. Look at leaders like Elon Musk or Larry Page himself. They spend their days with things like cars, spaceships, and the future of food even while they are Information technology majors.

They just skip the paperwork and the bureaucrats in the middle. When barriers between those doing the actual work and those with the authority and the vision to lead are taken out, great things happen and there will be a few energy companies that will make it to the top so quickly, you won’t be able to go for a pee.

When Google started up they wanted to sell out to Yahoo for a million and were sent out the front door. They then went to Excite to sell for 750.000 and were sent out the back door. Both companies are toast today and Goggle rules the flock. How about that? Both companies were killed by their Middle Management.

To be successful in the new, nutbag energy world of tomorrow, your teams will have to be able to do the impossible, the uncomfortable, the itchy, the outright crazy as it won’t be “Normal” that cuts cheese in the new lean, mean energy world. Just as corporate Yahoo and Excite could not make it against a razor-sharp competitor like Google. Ideas must go straight from the head into action and Middle Management prevents that like a thick layer of pea soup with plenty of bread in it.

How can an employee be empowered, have the mandate to act, and do the unthinkable if there is no straight mandate from the top to the employee?

The energy world of tomorrow will have great employees and great leaders. Those mediocre will be gone, trust me on that. And Middle Management will be just a memory from the past. If you are in Middle Management now and can’t make the jump to the top real quick – you are toast. If you are an employee you might get lucky – you might also be toast if you were so far hiding in teams and you merely did as you were told. Oh, and if you are a leader you might find out that you are not a leader after all. Because chances are that you climbed the ladder through the Middle Management layer.

And real leaders don’t even know what this is as they have never been there.