The energy specialist
– The energy sector is a fickle one, especially when you are in retail. Yet good leadership can create a market leader in a highly competitive and volatile field. Nigel Clark is a very good leader and in a short period of time has transformed Momentum Ene
Momentum is an apt name for a growing company that has been around for a short time. Nigel describes those early, fledgling days back in 2006 as crazy, fly-by-the-seat-of-your-pants times. The established utilities may have considered Momentum Energy the cowboy in the pack, but sometimes there’s a synergy in madness that favours the brave. And Momentum was brave.
Before we look at why Momentum has only taken a short time to become an established leader, let’s first take a quick look at its leader Nigel Clark, because Nigel’s background informs much of Momentum’s rapid rise.
It is going to be hard to sum up Nigel’s career in a few medium-sized paragraphs. He knows finance and tax; he studied it all those years ago. He then practiced for short stints at Coopers and Lybrand and Ernst and Young, before moving into the real world of business with Alcoa of Australia. Alcoa Inc. is the world’s third largest producer of aluminum. I don’t know why but it seems to have an iconic place in Australia’s history, perhaps because of all the cans we kicked when we were kids. So when Nigel arrived in the 1980s, it was a great place to be.
“Back then, Alcoa was a pretty vibrant company, they had a real focus on training, learning and development, so I was exposed to some really great quality leadership, training and experiences,” Nigel says.
It was here that he was exposed to the World Leadership Forum run in Pittsburgh for up-and-coming managers within Alcoa Inc. There he learnt from and was exposed to senior leaders in the organisation through to the CEO of Alcoa and people from different cultures and countries.
He travelled the world with the organisation working on a variety of assignments and projects.
“I did a lot of efficiency audits, internal audits, and a range of things with regard to sharing best practice around the world. I got to go and do some work in the USA, South Korea, Brazil and Spain. So, those were all great opportunities.
“That was one element for which Alcoa is very good — giving you exposure to leadership and experiential learning, but also a lot of emotional intelligence practices that really gave you an understanding of your own style, your team’s style and how you interrelate with people. That allows you to understand how you work as an individual and the impact you have on others.”
“If you look at the roots of all of that, it really does goes back to some of the quality management principles, focusing on continuous process improvement and really using that as a mindset, so I was very lucky to come through and then be grounded in those principles. To this day, I still use many of those practices, techniques and tools to help people to think about continuous process improvement in Momentum.”
Nigel held a lot of roles at Alcoa. Business Support and Planning Manager, Commercial Development Manager – WA Operations, Corporate Accounting and Planning Manager and Assistant Treasurer. He worked his way up to become Commercial Manager of Victorian Operations. These were diverse roles and he grabbed every opportunity as it came along.
“I wasn’t shy in taking on new opportunities and testing myself in areas that were out of my comfort zone that led to growth as an individual. This is a valuable lesson for anybody I feel.”
Nigel followed the same pattern when he joined TXU. His philosophy is that while the world evolves, people don’t change; the same principles of having respect for the individual, giving people opportunity and knowing what might motivate an individual or may not still apply.
“Those basic principles of human understanding haven’t changed. So, you can adapt a lot of what you see and learn along the journey.”
He learned about the resource sector with Alcoa and at TXU was primed to challenge himself through what he describes as a “fast-paced, integrated retail portfolio agenda”.
“The guys that I got to work with were probably some of the best in the industry as far as running a very active trading portfolio. My first 20 months at TXU were spent on the wholesale trading side, and that was a fantastic experience in a fast moving energy market that was continuing to become de-regulated.”
The company was then twice sold. First to Singapore Power, which split the business and sold off the retail part to CLP, which went onto become TRUenergy and was subsequently renamed again to Energy Australia.
In three and a half years his roles varied from wholesale strategy and analytics to retail strategy. Or from the dark side to the light side. While most in the industry only experience one or the other, the fact that Nigel had both held him in good stead when he moved to Momentum. And that’s when things became really interesting.
He began with Momentum as a contractor in March 2006. The company was just over a year old; it was a start up that needed a jack-of-all-trades at a time when utilities were popping up everywhere and the market landscape was rapidly changing.
When Nigel joined Momentum it was a private company with approximately 35 staff and in the fiscal year of ’06, revenue was just over ten million. A rocky period followed as they burned through cash to attract new customers and build a sustainable business.
“In ’07, we just fought for our life. It’s an interesting story that most people don’t know. We had all this competition and new entrants coming into the market and then, if you remember, we
hit the energy crisis and the seven years of drought started to take their effect. So, you had several hydro generation systems that had basically run out of water; in Tasmania, NSW and Victoria. You had several Queensland thermal power stations running out of water and the wholesale energy prices tripled, so they went from literally 50 dollars a megawatt hour to 150 dollars a megawatt hour.
“So we’re a small private company with not very deep, capital pockets and the wholesale market tripled. We were staring down the barrel of putting out products that cost $150 and going out and trying to sell it for the equivalent of $50. The market was regulating people to make a loss, which was just obviously not a very sustainable picture, and a lot of market participants went into a conservation mode because of their AFSL license conditions. It was a very hairy time. Two retailers went bust. So we did a lot of nimble things very quickly that really preserved cash inside of the business and we survived.”
All the skills Nigel had learned in his career came to bear during this period as he faced the energy crisis, then the GFC and ongoing regulation and deregulation. It is a market of constant change and not one for the faint hearted. So how was it navigated? “That’s a really good question. Regulatory-wise, it’s just been a nightmare. If you look at what energy rates are comprised of, more than half of any bill that we charge to customers is pass-through of numerous regulatory schemes and distribution costs that we have no control over. Many of these pass-through costs have experienced large increases in the last five years but it’s the retailer that is the ultimate bearer of bad news to the customer.
“One of our real issues is that we’re challenged because, as an industry, we are wholly looked on as one and yet we as a company are trying to build a strong relationship with the customer while passing through all these costs that we have no control over.
“So how do we go through it? I suppose one, is to be surrounded with smart people who are helping me scan the environment as to what’s going on. I have an excellent team at Momentum and access to great resources within the wider Hydro Tasmania group”.
In September 2009 Hydro Tasmania, Australia’s largest producer of renewable energy, took full ownership of
“Back in 2002, Momentum Energy and Agility CIS were both new entrants in the Australian market looking to bring fresh and innovative products and services to Australian consumers. Since then both companies have experienced exceptional growth, with Momentum an established energy retailer and Agility CIS a leading global utility solution provider. Nigel is a leader that is continually looking into the future, analysing opportunities and anticipating trends. Nigel’s insight and ability to communicate is invaluable to Agility CIS”
Momentum Energy. Hydro Tasmania has 100 years of experience in energy that has given Momentum an opportunity to offer a whole network of energy experts and consulting services to its customers.
“Two, we try and participate through the likes of the ERAA (Energy Retailers Association of Australia) to try and influence government policy to achieve a sustainable and cost effective industry for consumers. Three, we partner with quality organisations that have grown with us in our journey and success.
Partners that have been critical to the success of Momentum over a long period of time have been;
The T20 Group led by Rod Curtis responsible for driving and assisting the development of our Branding and Marketing strategies and market execution
Bastion EBA led by Jack Watts who have developed and executed our Market Sponsorship strategy and provision of brand activations
Agility CIS led by Mike Thorne who have been since day one our billing system provider and key technology partner
All of our partners are critical to the ongoing success of Momentum. They understand our business, our people and our culture to drive quality outcomes. They have had a large influence in shaping the brand and structures we have today. Lastly they are genuinely great people to work with.
“But I think the way I ultimately navigate it is by focusing on the customer. At the end of the day, if you can keep your customers onboard and not suffer turnover that this industry’s renowned for, then you’re going to have a fighting chance to build a reputable brand and a solid customer base. It’s about trying to focus on the trends that are evolving and how you’re going to connect with your customers. It’s more than just selling the commodity. It’s about being an energy service provider and being in touch with your customers’ needs and building a frictionless experience for them when they deal with your organisation. Being Customer Centric as your core mode of operating is essential.”
“When I came into the MD role, it was very much, “By 2020, what do we want to look like?” We have built and continue to build platforms that underpin the business. Having the right platforms, having the right energy services offering, having very strong
insights about your customer base and using those insights to really shape your future direction will allow you to keep ahead of the curve.”
Those are three pillars that Momentum focuses on. It’s a challenge, but Momentum is about having a culture and an organisation that is nimble enough to respond to continuous changes. They plot one to two to three year goals against the backdrop of the organisation’s culture.
“It’s very much being able to adapt to change very quickly because some of the things imposed upon us, like the carbon repeal that is coming is an absolute leap. We went through months of indecision about whether the carbon scheme was going to come in. Now we’re going through all the indecision over whether the thing’s going to be repealed, so that is a case of something that is out of your control and yet has large impact on your business.”
As part of the Hydro Tasmania group, one of the main tenets of the Momentum brand is clean energy: how to adopt, how to adapt and how to integrate newly emerging clean technologies including solar and battery storage. Those trends are now emerging in Europe and across the world as all have the same issue about fossil fuel versus renewable energy and the way forward to cleaner energy supplies.
“As a group, we generate clean energy and we have a unique electricity product on the market that we call “Smile Power”, which is an independently verified product that is matched with the generation of clean energy. That is our lead product that we sell to small business and moms and dads and we’re very proud of that product and what we do for Australia through our Tasmanian based clean energy sources.”
Clean energy is what sets Momentum apart from its competitors and one of the reasons their popularity has grown in such a short time. Another is their no door-knocking policy to residential homes which they adopted when they first started. This has built trust and confidence amongst consumers. And as we discussed at the beginning of this article, the strong leadership has also had an impact.
Through Nigel’s leadership, everyone is on board with brand message. There are several key elements to this. One is that Momentum is clear about its brand principles.
“We tell it very straight to the consumer so that there’s no miscommunication,” Nigel says. “We’re clear in our marketing of products and marketing around our brand principles and what we stand for as an organisation.” There is a lot of misunderstanding about our industry and we aim to make customer offers clear and transparent.
“Secondly, how we get people swinging to the Momentum culture, if you like, is that we work very hard on the mojo of the company and building a very positive and active environment to take on the big guys. I push very hard an insurgent mentality where the small guys are taking on the big guys. So even though we’re a little bit bigger our self now, that’s
something that’s very ingrained in our culture. “
“Part of our culture is that we have fun and celebrate success. So, we rely very heavily on having a very positive culture in what is a very tough industry. We’re up against 20 retailers in Australia in a highly competitive low-margin industry. We have to be absolutely on our game and at the end of the day, that comes down to our people. Other companies say staff is their main asset, in our case that’s true. I work very hard with my team on building culture, creating career growth and opportunity for our people and celebrating our success. Our staff at Momentum is fantastic.”
Nigel is well known for his progressive and achievement-oriented approach to running a business and this is evident in the way he runs Momentum. There are now 260 employees, a growing customer base and products to match. Momentum’s rise is no mean feat. There may have been a little luck, but Nigel’s encompassing expertise has allowed the company to avoid disaster, build an exceptional team around culture and continue to grow.
Nigel Clark at Gordon Dam, Tasmania
Momentum team at the 2013 Corporate Games
Momentum Sustainable Garden at Melbourne International Flower and Garden Show