Capstone Handbook

Foreword

The offshore wind industry is at an exciting and pivotal moment in its development. Over the last decade, we have seen a significant growth in offshore wind capacity, with more and more countries investing in this clean and renewable source of energy. However, as the market grows and matures, it presents us with new and complex challenges that require strong leadership to navigate successfully.

The offshore wind industry is facing a number of significant challenges that require strong leadership to navigate successfully. One of the biggest challenges is the need to reduce costs while maintaining safety and reliability. Good leadership is crucial in managing the financial and technical risks associated with offshore operations, and in driving efficiency and innovation to reduce costs and improve performance.

Another challenge facing the offshore wind industry is the need to manage the environmental impact of offshore projects. Offshore wind farms can have a significant impact on marine ecosystems, and it is essential to balance the need for renewable energy with the need to protect the environment. Good leadership is critical in navigating the complex regulatory frameworks and engaging with stakeholders to ensure that offshore wind projects are operated in a sustainable and responsible manner.

In addition to these challenges, the offshore wind industry also faces the need to attract and retain talented and motivated employees. Offshore operations are complex and require a diverse range of skills and expertise.

The right leaders are essential in building and leading high-performing teams, fostering a culture of innovation and collaboration, and developing talent and leadership skills across the organization.

As we grow and build the Operations team globally, we need to take the opportunities to work closer together, share continuous improvements, solve problems together, and develop consistent ways of working. Together we are building something unique – a Global Green GenCo that consistently delivers top quartile performance for all our stakeholders. Already today, we lead over 11.000 colleagues across 3 continents and have a growth plan that more than doubles our current scale by 2030.  At the same time to meet the competitive and business environment challenges ahead we must deliver even greater excellence and create a common culture that makes the most of our diversity and our market-leading scale.

In this handbook, we will explore how we from a leadership perspective face the challenges that lie ahead. Leadership will play a critical role in overcoming these challenges. From managing the risks associated with offshore operations, to navigating complex regulatory frameworks, to building and leading high-performing teams, this handbook provides practical insights and strategies for success.

I hope the handbook will inspire and guide leaders in Operations as we work to meet the world’s growing demand for renewable energy. Together, we can build a world that runs entirely on green energy.

Module 1 Innovation and New Business Paradigms

Innovation is shaping the operations of tomorrow

The world is changing, and we must innovate and progress with it to save it.

- Capstone participant

The world is in transition. Technology is developing at an exponential pace; digital manufacturing is on the rise and AI tools are adopted by millions of people and organizations. Competition is coming from more and more places with e.g. retail chains like IKEA and Telcos moving into the energy sector, and new business paradigms are in constant development. That is why the whole of Operations needs to double down on Innovation and New Business Paradigms. Innovation is not a department!

The new business paradigm

Ørsted’s vision to create a world running entirely on green energy and the aspiration to be a world leading Global Green Energy Major is followed by Operations’ own ambition to be the Global Green Energy Major Generator.

This journey started more than 20 years ago and has been based on innovation and entrepreneurship. We have proven the feasibility, viability, and desirability of large-scale renewable energy production. For the next horizon, we need to continue to build upon the same hardened foundation to meet the next challenges →

Accelerated growth

We will have a dramatically accelerated GW growth according to Ørsted’s 2030 goals

Geographical growth

We will have expanded from a strong presence in a few countries to increased geographical spread with new markets emerging across the globe

Technology growth

We will optimize current WTG platforms and portfolio together with introducing new technologies, platforms and asset types

New systems growth

We will shift focus from solely offshore wind to developing and integrating various energy production and storage solutions into a single, comprehensive energy system

Ever focused performance

Whilst doing all of the above, we will deliver yearon-year performance improvement for each region, site and back-office

In addition to this, Operations will face external supporting and inhibiting changes within technology, environment, economic, social, and more. Together this will create a new business paradigm for the years to come. For all challenges, innovation is paramount to champion the position as industry winner; to be the global leading Green Energy Major.

“Innovation is not an option”

– Capstone participant

“We would like to be more innovative but are bad at executing it”

– Capstone participant

Here are five of the challenges we will meet toward 2030

The innovation paradigm

Innovation engages the entire organization. Small or big ideas. From the individual or team that invents something new, to the (often cross-organizational) team that works together to get it realized, to the people who need to absorb and adopt an innovation into new ways of working. We are constantly living in change and we always either contribute, support and/or use innovations.

However, there was a time where we could solve challenges through a one-off projects paradigms. Today and toward the future, we need to adopt a structured product management paradigm and framework. Together with the local learning and improvement culture, we need to build and operate global and standardized products to explore and exploit new technologies to help us deliver on our global and regional strategies. This chapter will explain further how we use agile product management to discover, develop, engage, implement, operate, and retire innovations in a structured manner.

“The best way to predict the future is to create it.”

– Capstone participant

Agile Product Management

Project vs Product Management

In traditional project management, the focus is on delivering a specific project on time, within budget, and according to a predetermined plan. The project team is responsible for executing the plan. The project manager is accountable for ensuring that everything runs smoothly.

In contrast, product management takes a more holistic approach to product development. Here we focus on understanding customer needs, identifying market opportunities, and continuously improving the

product over time. Product teams work cross-functionally to ensure the product meets customer needs, stays on the forefront of technology, is delivered on time and on budget and last but not least, realizes the expected value. The above can be visualized with a restaurant analogy. →

At the Capstone module, three components to product management were presented and will be used to describe how we work with innovation:

1. Mindset, 2. Process and 3. Tools.

Innovation requires structure and low bureaucracy.

- Capstone participant

Traditional Project Management

Agile Product Management

Imagine

restaurant and a waiter with a project management approach.

When the kitchen bell sounds and the pasta Bolognese is ready for table 6, the mission for the waiter is set.

The waiter goes to the kitchen and focuses all effort on delivering the pasta to the table, on scope, time, budget and quality.

The project management approach is powerful to deliver dedicated and focused output.

Here the waiter also hears the bell from the kitchen, the pasta Bolognese for table 6 is ready.

Instead of going to the kitchen, the waiter looks out into the restaurant and considers; what is the desired outcome (versus output) of the restaurant?

To drive a valuable and sustainable competitive restaurant, a key indicator could be the Tripadvisor score. Hence the waiter looks up and orients toward this goal.

Perhaps it is better to welcome the new guests, who just arrived at the entrance or take the order from table 2, than delivering the pasta Bolognese to table 6 who is still enjoying the bread sticks served earlier.

Mindset

Product Management

The story of the waiter describes the two paradigms, where the system thinking and customer-centric value mindset are is the foundation. Other key mindset aspects of agile product management are:

Product thinking

Instead of running temporary output focused projects, where people are together for the duration of the project and then dispersed. Product thinking is about setting up the organization based on the products customers are using. This changes the focus from output to outcome and shifts from one-off projects to global standardized innovative products.

End-to-end responsibility

Product teams have end-to-end responsibility from ideation to retirement. The same team is responsible for innovation and how the product performs once in operations.

De-centralization

Teams are measured on value creation and the ability to decide how they work and what they work on. This means that decision-making is highly decentralized, which allows fast decisions made by the people with knowledge of the specific situation and decreases bottle-neck decision gates.

Must-know #1 The Value Framework

The Operations Product Lines have seven must-knows that define practices around innovation and product management.

The first one is the value framework, that product management organize, orient, and prioritize toward value through value potential, promise, forecast and value tracking

Agile teams

Teams are small and cross-functional (and often cross-organizational). Typically, no more than ten people cover all the skills necessary to take a product from ideation to retirement. This allows for close collaboration between different viewpoints. The diversity gives the team a holistic view of the product so some aspects, how to maintain it once it is in production, aren’t forgotten.

Iterative, incremental

Products are developed in an iterative and incremental way; in short timeboxes with focus on delivering something that quickly can be tested by the end users. This establishes fast feedback loops and adjusts the product for maximum value throughout development.

Customer-centric

Teams are led by a Product Owner (or Product Manager) who represents the customer. Customer specialists who will use the products are often part of the teams. This means that customer needs is a key aspect of product development.

Value focus

Finally, Agile Product Management is value focused. The most important thing to measure and steer by is the value the products create. This is typically done with both leading and lagging indicators. Lagging indicators could be sales or numbers of users. Leading indicators could be how likely customers are to recommend the product to others. These metrics allow the teams to learn about their value creation and use this knowledge when making decisions.

Must-know #2: Product Management Organization

For a structured approach to global innovation and products, the seven Operations Product Lines are organized with product managers, owners and product teams with an agile product management framework

In Operations, we organize the innovation and product management around Ørsted Lab_ and the seven Operations Product Lines.

Each Ops. Product Line focuses on a specific product area with product teams for each sub-area. The product teams are led by a Product Owner, as well as supporting roles, such as SCRUM masters. Together the Ops. Product Lines and the associated product teams cover the entire value chain for digital, service and hardware products for Operations.

Ørsted Lab_ is organizationally anchored in Global Operations - Operations Digital & Innovation, while the Ops Product Lines are intended as a process organization having seconded resources and specialists across the organization, e.g. from Ørsted IT and Regions. To get an improved overview, Ørsted has implemented the full blown agile (FBA) view as the alternative org. chart view on Vital.

Ørsted Lab_ Operations Product Lines provides

One place for capture, develop, operate and lifecycle manage global innovations and products

Structure to innovation – organization, budget, roles and responsibilities, collaboration, mandate

Global priorities – holistic and system view on the issues, opportunities, and solution for Ørsted’s global asset portfolio

Self-organization – a high degree of decentralized decision making through value management

Organizational engagement – virtual teams consisting of different profiles from across Ørsted

E2E responsibility – (in most cases) the same team is responsible for a product through its lifecycle including implementation, operational support, maintenance and value tracking

Agile Leadership

To reach the above-mentioned mindset, agile methods, and leadership along with agile ways of working are needed. Agile Leadership rests on system thinking and self-organization. The role of the leaders is to set up the system or the organization, where goals, incentives and motivation is aligned with Ørsted’s overall goals. Within this system, individuals and teams are encouraged to self-organize and find the most efficient ways of working that gets the job done and delivers the expected outcomes. It is often a focus on people over processes and tools.

The agile leader excels in:

Vision and strategy: The agile leader is skilled in crafting a compelling vision and setting ambitious goals, while also ensuring that there is a well-defined strategy in place that establishes the overall direction and priorities.

Outcome focus: The agile leader empowers both teams and individuals by granting them the freedom to decide how to achieve results. Nevertheless, the leader ensures that the team sets ambitious goals and holds them accountable for monitoring their progress.

Collaboration and Empowerment: The agile leader understands the importance of collaboration and empowering their team

to make decisions and take ownership of their work. They create a supportive and inclusive environment that encourages open communication and trust. They work to remove barriers that hinders collaboration and progress.

Continuous improvement: Daily, the agile leader’s focus is on ensuring that the team operates in an optimal environment that promotes their success by providing the necessary support and resources. The agile leader proactively seeks to identify any obstacles that may be impeding the team’s progress and takes action to eliminate them.

Must-know #3: Governance cycle

We have breaks on our cars, not only to stop, but to be able to drive faster. It is the same way with good product governance.

Operations Product Lines governance goes all the way from the operational two-week iterations to tactical quarterly system demo, ABO, advisory group and steerco meetings to an annual strategic process around roadmap and value

Process

Product Lifecycle Model

The DIA Product Lifecycle Model breaks down a product’s lifecycle in six maturity stages, from cradle to grave. As part of the agile leadership, the model has no specific quality gates known from project management. Instead it enables a common language of the product lifecycle: where a product is, how the product matures and how it is handled in each maturity step.

However, for some type of products, it is used as a typical stage gate quality assurance. This includes specific products with HSE, technology risk assessment (TRA), cyber, compliance and MOC requirements.

Must-know #4: DIA Product Lifecycle Model

The stage before (D)iscovery is called Opportunity and requires the product team to properly discover the issues and opportunities before going to ideation. Product teams have full lifecycle responsibility for their products and must also manage to retire a product once a superior product (such as new technology) emerges. An example could be inspection of blades; done manually before, now with drones and soon with autonomous robots

The decision to progress a product forward is managed through the global product roadmap and ABO governance. The Ops. Product Line can push a new product well into incubation, but in many cases a customer, such as a region or new asset project, needs to pull the technology forward. An example is the upcoming drone technologies. At some point, new technology needs to be first tested and demonstrated with a site and ultimately be pulled into the Regional Capability Roadmap for full deployment.

Must-know #5: Discovery & Ideation

New or improved innovative products starts with discovery of issues and opportunities to get the right solutions. Some solutions can be done locally, while others have global potential. For these, reach out to product teams through Synergi, mail, phone, Teams or by the coffee machine! Share your observations and ideas.

The Product Model is an enabler for:

• Transparency of which products are in which phases

• Healthy portfolio balance of products in the different phases

• Clear and agreed product development approach/strategy with overall guidance for what needs to be done in each phase

• Compliance with Ørsted’s quality requirements, such as MoC, Grid, Cyber, HSE

• Actively manage the flow of products through the lifecycle, accelerating speed to market

Must-know #6: Global Product Roadmaps and ABO Governance

We separate Global Product Roadmaps and Regional Capability Roadmaps to ensure autonomy for the Ops. Product Line to prioritize and develop products toward global issues, opportunities, and value pools. The close dialogue with ABOs and customers is key to understand needs and priorities.

Global Product Roadmaps

A key component to manage innovation is the Global Product Roadmap. Each Ops. Product Line defines and maintains product and technology strategy and roadmap reaching 2-5 years into the future with a mindset of global challenges and solutions. Once each Product Increment (quarter), the Product Line Manager and Product Owners meet with Associated Business Owners (ABOs) and review the roadmap and upcoming priorities.

ABOs represent the customers of the organization and is appointed by the Ops. Product Line. They are managers or key

experts often from Regions Operations, Asset Management and Global Operations functions. They have an important role to provide viewpoints, insights, and guidance to the product teams on what is important. ABOs are also important ambassadors and carry a role to ensure other stakeholders’ viewpoints, needs, issues and opportunities are put forward. It is the responsibility of the Product Line Manager to collect the input and assess any required adjustments to roadmap and priorities. Eventually, these priorities will be formed into objectives for the upcoming PI objectives.

Tools

Regional Capability Roadmaps

Products are being developed to support customers’ own strategy execution, reaching targets or resolving problems. To link the Global Product Roadmap with customers’ strategies, we use Regional Capability Roadmaps.

It is a 5-year rolling product deployment plan for each customer group; each region, EPC, P2X, back-office or any other. It works as a kind of Winston Churchill war room, where Ops. Product Line Managers and regions meet every quarter to review and align on customer strategies, issues and opportunities and commit to plans for product deployment. In the far horizon (3-5 years), the participants discus long term technologies and changes, while products are indicated for near-term deployment and implementation. The participants

need to commit to deployment readiness; tactic, budget, training, MOC, operational, support etc.

Must-know #7: Regional Capability Roadmaps, implementation, product operations, and retirement

The Regional Capability Roadmaps examines the customer strategy and pull products from the Global Product Roadmap to support customers to deliver on their strategy. It provides a conversation space and handshake commitment between Ops. Product Lines and the receiving customer.

Value potential, promise and tracking

Looping back to the story of the waiter, the value mindset is a key driver for successful innovation. On the strategic level it ensures that product teams continuously orient priorities innovation toward the most valuable areas. At the same time, it drives an end-to-end mindset.

The value framework is the most important part of governance and support teams to act autonomously and enables them to always seek out the greatest value. The framework contains four elements.

Value Potential: Each year, each of the Operations Product Lines reassess the Value Potential and major levers of the area for a given year in the future. Often through; how much additional revenue or avoided cost (direct, indirect, risk reduction etc.) could be achieved with unlimited resources and perfect conditions. The horizon is 3-5 years in the future.

Value Promise: Following this, the individual Ops. Product Line generates a Value Promise. A commitment from the team for how much value their current and future products will realize, given the actual conditions such as budget constraints and technology, organizational and market risks. The value promise is made for each year and the longer term for a 3-5 year period.

Value Tracking: For each product deployed, we add Value Tracking. It starts as a hypothesis or a simple Excel model in the early development phase to define the desired outcome and how to measure the benefit. After deployment, the model is advanced into a PowerBI system that aims to capture data from SAP, IoT sensors or other systems to track the usage and value generated. It represents the exchange of value between the customer and the product team and ensures that the product team follows the deployment, implementation and use to the last mile.

An example is an algorithm product from Advanced Analytics. It monitors filter quality. It might discover a filter is about to fail and issues a ticket advice to the site about the upcoming incident. No value is so far generated. However, the moment the site acknowledges and executes the advice with a work order close, a value is booked in Operations Product Lines.

Value Forecast: The last element is Value Forecast. To ensure the Value Promise is kept and roadmap planning is optimized toward this, the product team continuously updates forecast of value on existing and new products. This enables the Ops. Product Line to ensure goals are met, but also used to review portfolio activities, priorities, and effort.

Value potential, promise and tracking

Replace page 12

Replace page 12

Replace page 12

on portfolio level

Value

This is the full addressable value pool within influence in 20YY

This is the full addressable value pool within influence in 20YY

on portfolio level and

Product Lines

With given funding received, this is thereal value promise in 20YY

on portfolio level and

Used to identify value opportunities

Used to identify value opportunities

This is the full addressable value pool within influence in 20YY Used to identify value opportunities

With given funding received, this is thereal value promise in 20YY

With given funding received, this is thereal value promise in 20YY

Used to set targets and receive funding

Used to set targets and receive funding

Used to set targets and receive funding

on product level

on product level

on product level

Forecasting of (near) future value creation

Forecasting of (near) future value creation is

Forecasting of (near) future value creation is

Value from each product is tracked and compared against value promise

Value from each product is tracked and compared against value promise

Value from each product is tracked and compared against value promise

Used to track progress and identify adaptation issues

Used to track progress and identify adaptation issues

Used to track progress and identify adaptation issues

For each product is a year-by-year value forecast used to set, check and adjust targets

For each product is a year-by-year value forecast used to set, check and adjust targets

For each product is a year-by-year value forecast used to set, check and adjust targets

Used to look ahead and adjust strategy and promise

Used

look ahead

Used to look ahead and adjust strategy and promise

The seven must-knows for Managing Innovation & Products

Ørsted Lab_ has developed a framework for WayWeWork with seven must-knows for Management Innovation & Products (E2E Product Management Framework)

and the must-knows have been referred to in parallel with the text. The framework is both available in the full document and in a shorter informative version.

Must-know #2 Product Management Organisation

Must-know #7 Regional Capability Roadmaps, Product Deployment and Operation

Must-know #1 Value Framework

Must-know #6 Global Product Roadmaps and ABO Governance

Must-know #5 Discovery and Ideation

Must-know #3 Governance Cycle

Must-know #4 DIA Product Lifecycle Model

Link to WayWeWork: https://waywework.orsted.com/

What is it with the dragons?

You might have noticed the dragons flying around in Operations. Ørsted Lab_ was formally introduced during Capital Market Days in 2018. Within here, the digital Operations Product Lines was born as the DnD ART. The DnD name origins from the Dungeons & Dragons fantasy universe and was a deliberate strategy to create a special innovation culture on the journey to become a digital first operator.

Today the dragons still roam inside Operations and the DnD and Dungeons & Dragons term has become a common internal name and expression of Win Across_ innovation culture. You might hear expressions such as; fight the corporate dragon (meaning, bend the rules), venture into the dungeon for quests or team members being assigned roles as fighters, mages, bards, clerics and so on.

The common innovation culture and mindset is ever more needed, as we embark on the next epic journey. Ørsted Lab_ and Operations Product Lines are the formal names, while DnD is the internal name that reminds us of purpose and mission to change the game to win the innovation challenges.

The Immune System Barriers

In order to open up for Ørsted’s innovation powers, we are more likely to succeed if we understand the barriers that might be holding us back. The first step here is to understand that those barriers are not solely about “people not wanting to…” and that we should be very mindful about pointing fingers as a means of explaining why we are struggling because most often the organizational barriers are more impactful than the individual ones.

In fact, there are both an individual immune system, an organizational immune system, and a societal immune system that we need to understand to identify the most important barriers that are holding us back. By analyzing which barriers are limiting us the most, we can better identify the hacks that can help us strengthen our innovation culture.

Individual Immune System Barriers

Personality profile:

Some of us like to bungy jump, some prefer watching Netflix on the couch. This is neither good nor bad. But it does mean people have different risk appetites. If we, as leaders, understand those we can better enable people to change with us.

Psychological resistance:

We all have a lot of biases in our brains. One of them is the status quo bias, which means we would rather not loose than win. That means that if we are to motivate people to embark upon journeys of change, we need to reduce their risk and make it compelling for them to join.

Capability deficits:

By making sure that people have the right capabilities, we can enable them to evolve with the organization.

Organizational Immune System Barriers

KPIs and reward systems:

In larger organizations KPIs are often not aligned between divisions, departments and teams. This means that one person’s/team’s KPIs might inhibit them from working together with someone else because of misalignment between their targets. By fixing this, we can ensure that we all work towards the greater good for the whole of Ørsted and not just for ourselves.

Legacy IT, infrastructure, processes, and business models:

We have set ways of doing things that are not always good for innovation. By e.g. asking ourselves if new innovations have to be aligned with legacy IT then we make sure that we don’t inhibit ourselves unnecessarily.

Investors and shareholders: Often they have shorter term demands than what might be good for long term success. While this is not something we can all impact directly, we can make sure that we make the case for the long-term impact of our initiatives just as visible as the short-term ones.

Societal Immune System Barriers

Legislation: This is typically the incumbent’s best friend but can also be an inhibitor for innovation.

Legacy customers and providers: Are Ørsted’s customers and providers equipped to go on the transformation journey with us? That cannot be taken for granted and therefore it is beneficial if we know what might be holding them back as we progress.

Economic climate:

World and regional economies always matter for their openness towards innovation. In downturn it is harder to convince organizations to do differently than what they are used to. Even though, it is probably even more important that they do.

Culture hacks

Culture hacks are concrete actions we can take to eliminate immune system barriers. Some examples are listed on the right. You can literally come up with hundreds of different types of culture hacks that support your journey →

Creativity works better when people are physically together. So, if the agenda is innovation and coming up with or experimenting on new ideas, in-person beats virtual.

By being in inspiring environments with e.g. colors and art on the walls, science shows that the human brain becomes more creative.

The language we use makes a big difference to how we think and act. Consider this example: “I stopped asking for ideas and started asking for experiments”. That is a whole different ballgame when it comes to innovation. So, what are we actually asking our people to provide, is an important question?

Do we have KPIs that help us innovate better? E.g. some future-forward companies use KPIs like “collaboration”, “Commitment to the project”, “Thought leadership”. These are harder to measure but super important for innovation. By having KPIs you are able to have conversations around, can be beneficial for innovating in the best possible way.

How we recognize and acknowledge each other makes a big difference for people’s motivation. Think about the “Brave Penguin” award that they started handing out in the Americas after being inspired on this module. This award is given to someone in the organization for daring to take on a challenge. Not for the results they achieve, but for daring to do it. This is a great way of showing, as a leader, the kind of behavior you value and the kind of culture you want to create.

Win across

With the innovation challenges and new business paradigms, the entrepreneurship and innovation capability will continue to be a core foundation for Ørsted’s Operations’ success. Every corner of the organization is contributing to innovation and changes. Whether it is local continuous improvements and new ways of working, part of a large organizational transformation or being a user of a new global technology. Contribution can be as simple as giving a Yammer / Viva Engage story post a big thumbs up.

Part of the many types of innovations, Ørsted Lab_ and the Operations Product Lines provides a structured approach to discovering, developing, implementing and operating global products for our global growing portfolio of renewable assets.

The Ops. Product Lines are a part of a joint eco-system across EPCO and Regions and that is why the Win Across commitment is paramount to realise the mission to become a Global Leading Green Energy Major.

Prioritize innovation on a weekly basis

– Capstone participant

“Innovation is not a department.”

- Capstone participant

Who you gonna call?

Production Assets: Therese Sjolin (THESJ)

Service Execution: Jesper Kyed (JESKY)

Offshore Logistics: Mikkel Windolf (MIKKW)

Supply Chain: Mikkel Windolf (MIKKW)

Advanced Analytics: Jan Frydendall (JAFRD)

Business Applications: Kirstine Frigast Als (KIRFL)

OT & Security: Jorgen Moller Nielsen (JORNI)

Synergi, ARM, mail, teams, phone, coffee machine

Getting innovation on the agenda, communicating the importance of change with my team

– Capstone participant

Plant an innovation seed in the team and be together face to face to discuss the topics

- Capstone participant

Meeting the leadership challenge

The business challenges in a new business paradigm are multi-directional. We will grow in both GW, geography, platforms, asset types and be on a continuous performance journey. At the same time, we will face external transformative changes in environment, technology, customer, suppliers, partners, employees etc. The leadership challenge is equally multi-directional. On one axis is the people, the value and the processes. The other axis is leading downwards toward teams, across colleagues and upwards to leaders and managers.

Some advice

Innovation and change can drive concerns and frustrations in teams, the feeling that the basics do not work before new technologies are introduced. Help your team on the journey, to lean in and take ownership where needed. Innovation is about people, before it is about technology, tools and processes.

We are on a massive growth journey. Be a role model and support both the local improvement initiatives and lean into the global processes and product development. Carry the Win Across mindset toward colleagues to create a unified Ørsted team. We cannot do it any other way.

Be proactive, speak up and reach out when you see issues, opportunities or simply when something is not working as it should. Explain the value of doing something in a new way. Create trust and belief that we can meet any challenge given to us.

#SupportTheTribe

Video summary

Module 2 Continuous Improvement

Empowering leaders to navigate challenges in offshore operations

The offshore wind industry is facing a range of challenges, including the need to improve operational efficiency, manage costs, and scale the business to meet growing demand. To address these challenges, strong and effective leadership is essential, and this requires the right tools and skills. The Continuous Improvement Module is a key component of the leadership program that provides leaders with the skills and tools they need to manage the challenges facing offshore operations.

Operational efficiency and cost focus

By empowering leaders to drive continuous improvement, offshore wind Operations can become more competitive, reduce costs, and drive profitability.

Providing structure, roles, responsibility, and adhering as well as improving standards

Leaders can establish standards and processes, assign roles and responsibilities, and provide employees with the tools and resources they need to make improvements. By providing a clear and consistent framework for employees to work within, businesses can empower employees to take ownership of their work and drive improvements.

Realizing the benefits of our initiatives through effective change management

Change is inevitable in the offshore operations and businesses need to be able to adapt quickly to stay ahead. It is important to plan and execute change initiatives effectively, how to manage resistances, and how to measure the success of change initiatives. This is covered by the initiative People side of change.

PSOC:

https://dongenergy.sharepoint.com/sites/PeopleSideofChangeinOperations

Lean definition and Lean systems thinking

Lean is a continuous improvement philosophy that focuses on the elimination of waste and the creation of value for the customer. The goal of Lean is to improve efficiency, reduce costs, and enhance quality by optimizing processes and engaging employees to continuously identify and solve problems. In Lean, technical, management, and people systems are three key areas that work together to create a culture of continuous improvement.

Lean production “

The original definition

Lean production is ‘lean’ because it uses less of everything compared with mass production – half the human effort, half the manufacturing space, half the investment in tools …

Also, it requires keeping far less than half the needed inventory on site, results in many fewer defects …

Technical System

The technical system in Lean focuses on optimizing processes and reducing waste to improve efficiency, quality, and safety. This involves using data and tools to identify inefficiencies and opportunities for improvement in the manufacturing or service delivery process. Examples of technical system tools include Value Stream Mapping, Kanban, 5S, and Total Productive Maintenance (TPM).

Management System

The management system in Lean focuses on creating a culture of continuous improvement and employee engagement. This involves providing clear direction, setting performance expectations, and aligning the organization to achieve its goals. Examples of management system tools include Leader Standard Work, Visual Management, and Strategy deployment/ Hoshin Kanri.

People System

The people system in Lean focuses on engaging employees to identify and solve problems and to continuously improve their skills and knowledge. This involves creating a culture of respect for people, where employees are empowered to take ownership of their work and to collaborate

with others to drive improvement. Examples of people system tools include Team Problem Solving, and Rapid Improvement Events.

The technical system is focused on optimizing the production or service delivery process, while the management system provides the structure and direction for the organization to achieve its goals. The people system focuses on creating a culture of engagement and continuous improvement by empowering employees to identify and solve problems.

Each of these systems is important to the success of Lean. The technical system provides the tools and methodologies to optimize processes, while the management system sets the direction and provides the framework for continuous improvement. The people system engages employees and empowers them to drive improvement and innovation.

By integrating these systems together, organizations can create a culture of continuous improvement that drives innovation, enhances quality, reduces waste, and improves overall performance.

Lean systems

Technical System

“How can we improve our processes and methods?”

Management System

“How can the leadership offer better support?”

Technical System

“The way value and resource flows are configured and optimized to deliver safe, high-quality and on-time delivery of customer demand for the lowest possible lifecycle cost”

• End-to-end design

• Rigorous elimination of losses

• Line balance

• Continuous flow

• Standardization

• Quality system (Jidoka, Poke-Yoke)

• Flexible workforce system

People System

“Which elements/ cultural habits are critical for success?”

Management System

“The formal structures, processes and systems through which the operating system is managed to achieve the business objectives”

• Performance management

• Organizational design

• Training process

• Support processes

• Continuous improvement infrastructure

People System

“The way in which people think, feel and conduct themselves in the workplace, individually and collectively”

• Training – training both as to why and how

• Operational culture – accountability of management and leadership, operator collaboration/maintenance

Leader standard work

Leader Standard Work is an essential component of any Continuous Improvement program, as it provides a foundation for consistency and accountability throughout the organization. Effective implementation of Leader Standard Work requires strong leadership commitment and active participation at all levels of the organization.

In the context of the leadership cascade, Leader Standard Work provides a framework for leaders to model the behaviors and practices that are essential to success in the offshore wind industry. By establishing clear expectations and guidelines for how leaders should conduct their work, the leadership cascade can ensure that all leaders are working toward the same goals and using the same tools and methods to achieve them.

Leader Standard Work also provides a means of monitoring and improving performance across the organization. By establishing clear metrics and regularly reviewing progress, leaders can identify areas for improvement and take action to address them. This creates a culture of continuous improvement that drives innovation and helps to build a competitive advantage for the organization.

The elements of leader standard work

The key elements of Lean include:

→ Performance Management

→ Problem Solving

→ Gemba Walks

→ Process Confirmation

→ Coaching & Feedback

These elements are essential for implementing and sustaining a Lean culture in the offshore operations.

Performance Management

Involves establishing clear performance metrics, tracking progress, and providing feedback to employees on their performance. By aligning individual and team performance with organizational goals, Performance Management creates a culture of accountability and encourages employees to work toward the same objectives.

Structured problem solving Is a critical aspect of Lean methodology, as it enables organizations to identify and address the root causes of problems in a systematic and sustainable manner. This involves using a structured approach to define the problem, identify the root cause, and develop and implement a solution. In Ørsted we use the DMAIC which stands for: Define, Measure, Analyse, Improve and Control.

A good problem definition is essential to

A well defined problem is half solved

effective problem solving. It helps to ensure that everyone involved understands the problem and is working toward a common goal.

It also helps to focus the problem-solving effort on the most important issues, thereby increasing the likelihood of identifying and addressing the root cause of the problem. A tool to define a problem is 5W1H which is shown on the right.

Effective problem solving using a structured approach and the “5 Whys” technique can lead to sustainable solutions and prevent problems from recurring. It also promotes a culture of continuous improvement by encouraging employees to identify and address problems proactively, rather than just reacting to problems as they occur.

Performance Management

• Lack attendance and attention

• Finger pointing

• Lack deadline, responsibility, description on actions

• Provide assumptions when dealing with explanation for KPI deviations

• No root cause problem solving or process confirmations triggered by deviations from targets

• Being on time and fully present

• Not blaming people

• Respecting deadline, responsibility, description on actions

• Provide facts when dealing with explanation for KPI deviations

• Use root cause problem solving or process confirmations triggered by deviations from targets

What is the problem?

Deformation of the export cable

Why is it an issue?

The tech spec EC123456 for export cables do not allow any damages. Deformed cable poses a high risk of cable failure

When did the problem occur/found?

During the standard inspection on load out of the cable from the vessel on of 8th April’17

Where is the problem observed?

220kV export cable. The damage is spotted on the 1600sqmm double armor section, cable count 33942m.

Who is impacted?

xxx project, vessel contractor – yyy A/S and cable supplier yyy A/S

How much?

The cable was then transferred to the shore side to do more thorough investigation. During the transferring to shore, additional anomalies were spotted.

“Deformation observed in export cables during inspection on cable load out from the vessel”

“The standard inspection of the 220kV export cable loadout revealed deformation of the cable on the 1600sqmm double armor section at cable count 33942m. Technical specification EC 125467 does not allow any damages on the export cables.

The cable is supplied by supplier XXX and is laid out by contractor YYY A/S. Further inspection by the supplier revealed several spots on the cable where deformation was found”

Tooling not calibrated

5 why Root Cause Analysis

Why?

Torque wrench (TW) used for mounting blades is not calibrated

Why?

The TW was not sent to the laboratory for calibration

Why?

The calibration expiry date was unknown

Gemba beats bullshit

Gemba Walks are an essential Lean element that involves leaders going to the workplace to observe and engage with employees. By going to the Gemba (or the place where work is done), leaders can see firsthand the work being done, identify potential issues, and engage with employees to solicit feedback and ideas for improvement. Gemba Walks promote open communication and collaboration between leaders and employees, which is essential for creating a culture of continuous improvement.

Additionally, Gemba Walks provide an opportunity for leaders to build relationships with employees, demonstrating that they are invested in the work being done and care about the success of the team. It sends a clear message to employees that continuous improvement is important and that the organization is committed to addressing problems and making progress.

Different types of Gemba Walks

Process Confirmation is one type of a Gemba Walk, which involves verifying that processes are being followed and are achieving the desired outcomes. This involves using data to confirm that the

process is achieving the desired results and identifying opportunities for improvement. By regularly confirming that processes are working effectively, Process Confirmation ensures that the organization is operating efficiently and effectively. Learn more about Performance Management, Gemba, process confirmation and problem solving on the OPS site or in WayWeWork.

Finally, Coaching & Feedback is an essential Lean element that involves providing guidance and support to employees to improve their performance. By providing coaching and feedback, leaders can help employees identify areas for improvement and develop the skills and knowledge needed to achieve their goals. Coaching & Feedback also helps to build trust and communication between leaders and employees, which is essential for creating a culture of continuous improvement.

- Capstone participant

The three main reasons behind the Gemba walks

How to prepare a Gemba Walk

Necessary information before the Gemba Walk

Preparation of agenda (1= draft on which areas should be visited, consider time for recap)

Make sure that the necessary workers are available at the time planned.

Inform them that a Gemba Walk will be conducted. Shortly explain purpose and approach.

Inform who will be there to perform the Gemba Walk.

i.a. Book site management for introduction

(when coach is with you) Book rooms for instruction and recap sessions

Clarity where PPE is needed

Ensure PPE (backup) is available

Finalize agenda incl. PPF needs and send it to participants

If offshore, double-check weather and logistic availability with OC

Questions to ask during the Gemba Walk?

Frame: What are vou working on? What’s the process?

When do you see results? How do you follow up? Network?

What do you do about it? What is the next step? Drive for improvement?

Do you face any problems? Why is that? Problem understood?

What is the current condition? How do you know? Awareness there?

What is the direction and next target? Goal clear?

Do you look forward to coming to work?

Do you feel you work is acknowledged by your supervisors?

Do you have the right skills that are required for your current role?

Do supervisors and managers care about your personal development?

Are people in your department open to new ideas and try to improve?

When did you have your last training?

How many improvements did you implement last week?

Scheme for leader standard work

Executive Team

• Review key performance indicators (KPIs) on a daily basis to monitor the overall health of the business

• Participate in regular Gemba Walks to observe processes and identify areas for improvement.

• Set the strategic vision for the organization and communicate it clearly to the rest of the team

• Set goals and objectives for each department and provide resources and support to help them achieve those goals

• Communicate with stakeholders and make high-level decisions that affect the organization as a whole

Head of Site

• Review KPIs for their department on a daily basis to monitor performance

• Conduct daily Gemba Walks and PC with their team to identify areas for improvement and ensure that processes are being followed correctly

• Assign specific improvement projects to team members and provide support and resources to help them achieve their goals

• Ensure that employees are properly trained and equipped to perform their jobs safely and efficiently

• Communicate regularly with other departments to ensure that goals and objectives are aligned and to coordinate efforts to achieve them

Operations Manager

• Review KPIs for their team on a daily basis to monitor performance

• Conduct regular PCs with their team to identify areas for improvement and to ensure that processes are being followed correctly

• Assign specific improvement projects to team members and provide support and resources to help them achieve their goals

• Provide regular coaching and feedback to team members to help them improve their skills and performance

• Communicate regularly with other teams and departments to ensure that goals and objectives are aligned and to coordinate efforts to achieve them

Expectations to me as a leader

As a leader in Operations, you are expected to do your standard work. There can be many barriers not to do the appropriate standard work on your tier (time, skill, perceived value etc.), but one that is the most prevalent barrier in Operations is time. By adopting the structure of leader standard work, it might feel like you have yet another thing to do, but over time the structure should help you be more efficient in your work. So, invest in yourself and follow the standard.

A good mandatory scheme for leader standard work can vary depending on the organizational structure and needs of the company, but here is an example of a scheme per tier (See left page.)

If you need help in any of the elements of the leader standard work then please reach out to Lean Engagement for support and coaching.

Imagine a future where your work as a leader is structured and you are in control of your time and your operation.

Video summary

Module 3 Safety and Security of Supply

Prerequisites for success

The module on Safety and Security of Supply is slightly different from the other 4 modules as these 2 subjects are fundamental to us as humans and as a society. We need to know everybody will return safely from work and as a society we expect a reliable supply of power. In the following chapter, we will explore the topics and hopefully reinforce an already strong safety and compliance mindset in you as a leader. Nothing we do must compromise safety or reliability because we have an obligation to the employees and their families on the matter of safety and to society on reliability.

We never compromise on health and safety standards

Safety – a guiding principle

Safety can be many things depending on the situation and context. It can be physical or psychological. It can be individual and a matter of perception, but one thing is universal: everybody should feel and be safe. We as leaders have a big responsibility in making that happen for our employees.

“You are the safety leader for yourself, your team, and your peers”

- Capstone participant

Effective communication is the foundation of safety leadership. Leaders must establish clear channels of communication that promote open dialogue and collaboration among team members. Regular safety meetings, toolbox talks, and safety briefings provide opportunities for information sharing, addressing concerns, and discussing safety-related topics.

Open communication allows team members to voice their observations, concerns, and suggestions freely. Leaders should actively listen and provide constructive feedback, creating a safe space where individuals feel heard and valued. By encouraging communication, safety leaders enable the timely identification and resolution of potential safety risks, contributing to a safer working environment.

1. We align our safety vision and behavior at every level with our contract partners – seniormanagement and our teams

2. We engage in open, honest, two-way communication –seeking to understand before being understood

3. We seize opportunities to discuss face-to-face first, video/phone second and email last

“You See It, You Own It” and “Safety is our Responsibility”

Two important Ørsted values in safety leadership are “You See It, You Own It” and “Safety is our Responsibility.” These values instil a sense of accountability and collective ownership of safety throughout the organization.

“You See It, You Own It” means that anyone who identifies a safety issue takes immediate ownership and addresses it or reports it to the appropriate channels. This value empowers individuals to take proactive measures to mitigate risks and prevent incidents. Leaders should encourage this mindset and reinforce it through recognition and positive reinforcement. When everyone feels responsible for safety, it creates a culture where safety becomes an inherent part of everyday work.

With the BIFF model below, you could take action when identifying an unsafe situation.

BIFF

Communication is key and the biggest challenge is making sure it has taken place

“Safety is our Responsibility” emphasizes that safety is not solely the duty of HSE professionals or leaders but a shared responsibility among all individuals in the organization from offices to turbines. Leaders should promote this value by fostering a culture of care, where everyone looks out for each other’s well-being.

By encouraging collaboration, knowledge sharing, and collective problem-solving, safety leaders create an environment where safety is prioritized and embedded in the organization’s DNA.

1. We take care of each other – we stop anything that feels unsafe and welcome anyone stopping us

2. We create working environments where people can thrive

3. We as leaders should not be afraid to challenge ourself and our employees on safety matters.

Ladder Challenge

Ørsted Safety Absolutes

The Ørsted Safety Absolutes provides a set of principles that can guide safety leaders in the offshore wind operations business:

People Absolutes

1# Safety

- We always follow safety rules and guidelines

Safety is OUR commitment to YOU. There is NO task so important that WE require it to be carried out unless it is 100% safe.

2# Integrity

- We always intervene and report unsafe acts or conditions

Integrity is not only about standing up for ourselves, but also acknowledging that we share the responsibility to improve working conditions for all of our colleagues and partners.

3# Results

- We always consider risks when planning and performing work

Results are not only business objectives, but also what we expect to see when performing daily work. Risk Assessments and method statements are only valuable if followed.

4# Team

- We always debrief and share learnings to continuously improve Sharing learnings through experiences is about harvesting the knowledge we build from day to day.

5# Passion - We always take care of ourselves and our colleagues

We are conscious that our decisions and actions may affect the person next to us, so we always aim to do the right thing, the right way

Process Absolutes

6# Work processes

- We always monitor and record deviations to work processes

We accept that work processes are designed to achieve consistent high quality and safety. “Safety is a by-product of doing things right”

7# Risk Management

- We always apply the hierarchy of controls to minimize risk exposure

Is to assess the risks and identify risk reduction control measures, so that the residual risk is as low as reasonably practicable. We acknowledge that it is a dynamic and iterative process of reviewing hazards or opportunities

8# Management of change

- We always perform Management of Change for critical alterations

We acknowledge that there are many types of changes in Ørsted, both; organizational, technical and operational changes. We ensure to evaluate the level and type of change and follow our MoC process.

9# Safety Assurance

- We always monitor our controls and follow up on their effectiveness

We fully respect that only effective barriers make the difference between injury and safety. This is the reason we always monitor our risk controls

10# Risk-based approach

- We always take a risk-based approach to planning of work

The highest risks deserve the most attention. We do not neglect minor risks. However, we are committed to devoting our effort where it provides the most safety in return

Psychological safety

Psychological safety is a critical aspect of ensuring the well-being and performance of our employees. It refers to an environment where team members feel safe to express themselves, share ideas, take risks, and speak up about concerns without fear of negative consequences. In the context of offshore wind operations, psychological safety plays a crucial role in promoting proactive safety behaviors, open communication, and continuous improvement.

Creating a culture of psychological safety

Leaders have a pivotal role in creating a culture of psychological safety. They can establish an environment where individuals feel comfortable and encouraged to voice their opinions, ask questions, and contribute to safety discussions. This culture is built on trust, respect, and non-judgmental attitudes, enabling team members to freely express their thoughts and concerns related to safety.

Active listening and empathy

Leaders should practice active listening and empathy when engaging with their team members. This means fully focusing on what is being said, seeking to understand the perspectives and emotions behind the words, and responding with empathy and

understanding. By actively listening, leaders validate individuals’ experiences, concerns, and ideas, fostering an atmosphere of trust and psychological safety.

Encouraging speaking up and reporting

In the offshore wind operations business, it is crucial that individuals feel comfortable speaking up about safety concerns and reporting incidents or near-misses. Safety leaders should actively encourage and appreciate these behaviors, emphasizing that everyone’s input is valued and necessary for maintaining a safe working environment. By normalizing speaking up, leaders empower individuals to take an active role in identifying and mitigating potential risks.

Learning from mistakes and encouraging innovation

Psychological safety allows for learning from mistakes and encourages innovation. Safety leaders should promote a learning culture that views mistakes as opportunities for growth and improvement rather than as grounds for blame or punishment. When individuals feel psychologically safe, they are more likely to share and learn from their mistakes, as well as propose innovative solutions to enhance safety in offshore wind operations.

Team collaboration and support

Safety leaders should foster a sense of teamwork and support among team members. Encouraging collaboration and creating opportunities for individuals to work together promotes a supportive environment where individuals feel valued and respected. Team members can rely on one another for support, seek guidance, and collectively address safety challenges, enhancing psychological safety and overall well-being.

Continuous feedback and recognition

Providing continuous feedback and recognizing individuals’ contributions are essential for psychological safety. Safety leaders should offer constructive feedback and guidance to help individuals improve

their safety practices and behaviors. Recognizing and appreciating individuals’ efforts, whether through formal or informal means, reinforce their value and encourage continued active participation in safety initiatives.

Psychological safety is a fundamental aspect of safety leadership. By fostering an environment where individuals feel safe to express themselves, speak up, and contribute to safety, safety leaders can create a culture that supports both physical and psychological well-being. Psychological safety enables open communication, learning from mistakes, innovation, collaboration, and continuous improvement. Ultimately leading to enhanced safety outcomes in the offshore wind operations business.

A fascinating reality that safety incidents can start very far away from where it happens

– Capstone participant

What do we expect from you as leaders

Lead by example

Safety leaders must set a positive example by consistently demonstrating safe behaviors, following protocols, and adhering to safety guidelines. By modelling safe practices, leaders inspire and influence their teams to do the same.

Build relationships

Effective safety leaders build strong relationships based on trust, respect, and empathy. By fostering positive connections, leaders create an environment where individuals feel comfortable discussing safety concerns and seeking support.

Coach and mentor

Safety leaders should act as coaches and mentors, providing guidance and support to their teams. Through coaching, leaders can help individuals develop their safety competencies, empower them to make informed decisions, and encourage continuous learning and improvement.

Promote learning and continuous improvement

Safety leaders should promote a learning culture that encourages individuals to seek knowledge, share experiences, and participate in ongoing training and development. This commitment to continuous improvement ensures that safety practices align with the latest industry standards and best practices.

Celebrate successes and recognize contributions

Safety leaders should celebrate successes and recognize individuals’ contributions to safety. By acknowledging and appreciating their efforts, leaders reinforce the importance of safety and motivate others to actively engage in safety-related activities.

Security of Supply

The industry Ørsted is in Most governments of the world and major humanitarian organizations consider access to electricity to be a basic human right*. Ørsted operates in the electricity industry, not the wind industry. Every country that Ørsted operates in have electricity supplies with >99% reliability, meaning the people in those countries expect the lights to turn on when they hit the switch. When we think of what electricity is used for, we often think of modern technology that enhances our lives like mobile phones, computers, televisions and so on. If that was the focus of the electricity industry then perhaps the industry would not need to provide >99% reliability, or to phrase in

another way, a highly secure supply. Hospitals with life support systems, public transport, all lighting, environmental condition equipment etc, are powered by electricity. Therefore, in the electricity industry - where Ørsted operates – security of supply is one of our most important missions. And so, to bring safety and security of supply full circle, humans cannot be entirely safe without electricity because electricity is so deeply imbedded in our daily lives. However, the people involved in the inherently hazardous act of generating electricity must also be kept safe, or else what is the point?

No scale without standardization

More than a 100 years ago, the secure grids we know today were very different. For example, in 1916 UK there were over 500 different distribution companies and 23 different plug and socket combinations - all operating at a different voltage and frequency.

With no standardization in either the generation or consumption of power from electricity, the industry struggled to grow. Worldwide governments came to realize the value of using electricity to power public services, as well as the general benefits for society and therefore sought a solution that allows a larger industry.

Standardization and the introduction of Grid Codes

In most countries, system operating frequency chosen was 50Hz and all generators required to “synchronise” to each other using the grid network. Every domestic electrical device in the world is now designed to function at 110/230V and at 50/60Hz.

To ensure that generators produce electricity at the correct frequency and voltage - as well as to ensure security of supply – governments appointed system operator(s) to balance supply and demand. These system operators were also required to provide codes which all system participants (generators and transmission operators) would comply with to ensure standardized, reliable, affordable electricity. These codes are commonly referred to as the “Grid Code”.

Global Expansion and the environmental cost

The introduction of System Operators and Grid Codes allowed the electricity industry that we see today to come into being. The rate of expansion from this point was incredible.

“Grid Codes” as we know them today are almost 70 years old in some countries Ørsted operates in. Codes are updated to accommodate new technologies or to incorporate learnings from incidents, thus making sure they don’t happen again Note: the UK Grid Code underwent several modifications following the 9th August 2019 blackout. Every section of every country’s grid code exists to ensure electricity is standardized in that country. Either directly or by ensuring the system operator can do their job properly.

Unfortunately, as can be seen, the predominant choice of fuel for generators was hydrocarbon based. As such, as power consumption grew, so did CO2 emissions.

The energy industry is a major contributor to CO2 emissions causing climate change. At the same time the world’s dependency on electricity has continued to increase year after year. Renewable energy could be a major player in combating climate change and providing the standardized power that the world has come to expect. This is the task Ørsted is currently undertaking, to be a global green energy generator that understands the responsibility of ensuring security of supply.

Global direct primary energy consumption

What makes a reliable electricity system?

As mentioned earlier, all generators on a grid are synchronized together. There are many advantages to designing a grid this way. For the first 75 years of these synchronized grids, the main advantage has been something called “inertia”. For electricity grids, inertia describes the amount of rotating mass is synchronized to that grid. This is important. When there are momentary unexpected changes in supply or demand, rotating masses (such as turbines or motors) will physically slow down if supply falls short of demand, similarly speeding up if supply outstrips demand. The more inertia a grid has, the more robust it is to change.

Because we now have standardized national grids operating at 50Hz, everything connected to those grids are also designed to operate at 50Hz. Although there are margins of comfort around this number,

maintaining system frequency is vitally important. If devices that are designed to operate at 50Hz see the frequency fall too far or rise too high, the damage can be catastrophic. To prevent this from happening, System Operators (SOs) have protection relays that will disconnect consumers if the system frequency falls too far. This practice is known as “protective load shedding”. Consumers’ power supplies are prioritized by network operators so that lower priority supplies are the first to be disconnected.

The system frequency will remain at its target (50Hz normally, 60Hz in US) if supply and demand are exactly matched. Too little generation and frequency falls, too much generation and frequency rises. As mentioned earlier, SOs have the job of balancing supply and demand.

Annual total CO2 emissions by region

• Operates and balances the system

• Widens access, promotes competition

• Network recommendations

• Operational planning

• Connection agreements

• GB charging and billing

The role of the SO – the view from Ørsted

Being able to know what the demand will be from minute to minute is clearly a very important task for the SO in every country. Usually, SOs are very good at forecasting demand. The other piece of the puzzle is certainty over forecasted generation. SOs get this information by generators submitting an expected generation profile for the day ahead. Different markets do this task slightly differently. For example, in Europe all generators submit their profile for the next day by 1200 the day before delivery. This enables the SO to plan for the day and see if generation will meet (or exceed) demand. Whenever supply and demand are not matched, a SO can take action to ensure they are. Actions available to SOs vary depending upon the time horizon before delivery.

From Ørsted’s point of view, we most often use short terms balancing actions such as an instruction from an SO to curtail a wind farm’s output.

The function of the market

Generators do not plan to generate when the demand is there deliberately. Each country where Ørsted operates (with the slight exception of Taiwan currently) relies on market forces to ensure generators are incentivised to deliver power at the best times for balancing supply and demand. The graph on the right shows a typical day in the UK in September 2022.

For electricity to be a tradeable commodity, it is sold in blocks of time, where the generator must deliver the stated power at a steady output for the duration of that block of time.

All markets – irrespective of the size of time periods – work on the basic principle that the value of energy is greater when there is a greater need for it. This makes generators more likely to want to sell power in time periods that are valuable. Equally, it makes them less likely to sell power in periods where the value is low. Generators

The role of the SO – the view from National Grid ESO

Generation By Fuel Type

National Grid ESO’s role

that must pay for their fuel (such as gas and coal) refer to the decision of whether to generate or not as their “marginal costs”. In other words, they only plan to run when their costs are covered with an acceptable margin for profit to counter the risk of not delivering (due to a technical defect at the site for example).

Ørsted in the market

For Ørsted, our generation assets are nearly all renewable. This means three things that set us apart from thermal generation (which the market and grid were both designed for):

• Renewable generators tend to have subsidies, meaning we do not focus on marginal costs when deciding to generate or not

• Renewable generation is harder to predict as it is dependent on the weather

• Renewable generation does not pay for fuel, so it is isolated from fuel price fluctuations

Since the introduction of larger assets like Anholt, Borkum Riffgrund and Hornsea, Ørsted generation assets now occupy more of the generation mix and hence the market. As the graph above shows, offshore wind is a major share of the generation mix in UK and other European countries also.

What does the role of the SO and the market both mean for Ørsted?

Put simply:

It is more important than ever to provide accurate generation profiles to the SO to enable them to balance the system and ensure security of supply.

Generation By Fuel Type

The relationship between SO and Ørsted Control Point

Even if Ørsted and other generators like us provide accurate generation forecasts, there are still thousands of jobs for the SO in real time to do to keep supply and demand balanced. The real time tasks occur due to the infinitely variable behavior of human beings – who can rapidly alter the demand, or because of generators unexpectedly

veering off from their forecast profile. In these moments, SOs all over the world rely on their 24/7 continuous relationship with designated Control Points. Every generator must have a designated Control Point, the role of which is described in the diagram below.

To balance the system that they operate, a SO must have the ability to instruct a generator to vary their output. Typically, these instructions must be accepted in 2 minutes and then enacted in a further 2 minutes. Meaning in under 4 minutes from the SO issuing an instruction, a generator will be at a new output.

Generators respond to instructions in a manner known and anticipated by the SO. Generators constantly communicate their capabilities to generate. Such as their maximum possible generation, how fast they can vary their output and if there are any requirements for a minimum amount

of time, they may need to remain at zero output. The latter being important in case of thermal recovery times for coal and gas generators, or for “dry-out periods” for offshore wind generators. It is a requirement to ensure that this information is always accurate and up to date, in case a SO requires a generator to help balance the system.

The importance of being in control

For the reasons stated above, it is a regulatory requirement (usually described in the Grid Code) that a generator is always in control of their asset. If a generator is not, then this is a breach of the relevant regula-

tion. Not being able to vary the output or de-energise a generator introduces a new real time risk to security of supply.

The importance of trusting our control point

The responsibility for ensuring security of supply is shared between every generator, transmission operator and SO that make up a national grid. Each party must do their job as described in the Grid Code. The importance of trusting the SO gets what they expect, when a call is made to an Ørsted control point, cannot be underestimated. As well as following the Grid Code and sup-

porting regulations, SOs are operated by human beings who either build trust in their counterparts or they do not. The Ørsted control points need current and accurate information about WTG/battery/solar availability continuously. The Ørsted control points need to know when things have gone wrong, and they need to know why as quickly as possible. The IT/OT systems that support Ørsted control points must be robust and provide the 24/7 service that is expected of them. The view of Ørsted from an SO perspective – is the control point.

What can happen when supply and demand are not matched?

The vast majority of time, SOs are excellent at forecasting demand. What helps them is recognizing patterns and trends of human behavior and how it changes with weather or large social events – such as major sporting events for example. In rare examples, there can be one offs- social events where trends cannot be used to aid in the forecasting and the SO must make their best guess. In 2022, HM Queen Elizabeth II passed away with her funeral being held on 19th September. As the graph below shows, the SO got the forecast wrong on two occasions.

At 1200, a two minute silence was held where the SO expected to see a major reduction in demand of more than 2GW. What happened on the moment was a minor reduction in demand leaving the system 2GW short of planned power. At this point in time, the SO will have sent a number of instructions to control points around the country to increase their forecasted output.

Then, less than 2 hours later, as the car departed Wellington arch the SO expected demand to remain fairly stable. In reality, a 2GW drop in demand was observed –presumably as millions of people in the UK switched off electrical devices like televisions and radios – meaning the system now had an oversupply of almost 2GW. Again, in this situation, the SO will have sent many instructions to control points around the country to reduce output. This is an example of when a SO forecasts inaccurately.

What happens when large generators trip off

On 30th October 2020, Hornsea 1 tripped off from 1200MW due to planned maintenance on Low Voltage (LV) equipment in the onshore substation. As the graph below illustrates, the impact on UK system frequency was an instant 0.42Hz drop. The containment limits on GB grid are 49.5Hz so this was very narrowly avoided as was a country wide blackout. The generators that Ørsted now builds are large enough to have country wide implications if they go wrong.

HM QUEEN ELIZABETH II 1926-2022 HOW01 30th Oct trip - impact on UK Monday 19 September 2022

Notes and reflections on security of supply

• In Denmark, Germany, UK, Netherlands, and Poland, “loss of load expectation” from governments is 3 hours per year

• US grid had a reliability of 99.74% in 2020

• Taiwan in the last 10 years averages 17 minutes of lost power per household

• Germany operates with 99.998% reliable system but in 2019 spent more than €1 Billion on reducing offshore wind generation (curtailments)

Main Learning Points for you as leaders

1. Now that you know how reliable the energy systems are meant to be, take a moment to think about how often does an Ørsted windfarm trip off. What will these thoughts inspire you to do when you return to your role?

2. The role of the Ørsted Control Point is crucial to the ESO and Security of Supply, ensuring they also have the most accurate information about our windfarms at all times. How does this make you think about our Control Point? Can you honestly say that you and your team know what the Ørsted Control Point needs from you?

3. Ensure that you understand how you and your team can deliver accurate information on asset availability to your designated Control Point

4. Ensure that any tasks that you and your team perform, enable Ørsted to deliver the MWs that we have communicated we will

5. Reflect on the importance of any asset/device or task that could affect the ability for Ørsted to be in continuous control of its assets

NOTE: Wherever you see “Ørsted Control Point” referenced that means for EU assets the GSCC facility in Barrow. For German, Dutch and Danish sites the GSCC shares its responsibilities with local teams as well. For UK sites GSCC performs 100% of the Control Point role. In the US, the legacy ON assets utilise different Remote Operations Centers (ROCs) as Control Points. The offshore fleet will use the GCC facility being built on Long Island.

Video summary

Module 4

Commercial Leadership

How does commercial understanding contribute to an overall improvement of Operations?

The offshore wind business is entering a state with more competition and tighter profit margins. It forces Operations to optimize the value creation from the asset portfolio to ensure that we stay profitable as we grow.

The Commercial Leadership module enables us to better understand the markets we operate in and the terms we operate under. This is a key step in the journey toward becoming a GENCO, a change with commercial understanding and behavior as a core pillar. The foundation for succeeding is that you as leaders become even more commercially driven.

A A R Awareness Ability Reinforcement

• Understanding of commercial drivers

D K Desire Knowledge

• Basic knowledge of Commercial in an operational context

• What possibilities/challenges does the new organisation create for us as leaders and how do we jointly solve them?

• What do we as leaders need to change and reinforce

Investment analysis & longterm decision making

A holistic view on the overall investments business case for current future assets reveals a cost split with Operations only contributing with 15 – 25% of the overall lifetime cost. To have a positive business case, it is essential that the revenue generated is significantly higher than the OPEX spend, to pay back the investment (CAPEX & DEVEX) and other related costs as COGS and TAX. With the current cost levels, the revenue should be around 4 to 6 times the OPEX cost levels.

Cash flow in the early phase is much more important in the early life of an asset/project compared to the later stages. This means from an investment perspective all savings that can be obtained in the construction and early operation phase, and increased generation in the same period, contribute much more to the overall NPV of a project, compared to late life optimization. This does not mean we should neglect looking into how we operate and optimize our assets in the later phases of their lifetime, but purely relates to the investment and use of capital in a project.

ABondonment EXpenditure

CAPital EXpenditure

COst of Goods Sold

DEVelopment EXpenditure

Net Present Value

OPerational EXpenditure

Risk mitigation & long-term trading

To secure investors and partners, a stable revenue stream, merchant assets, are traded up to several years in advance. Hereby the exposure to the increasingly volatile power markets is reduced. Trading several years ahead requires a lot of forecasting capabilities, both on the price and volume side to make sure a good deal is made. When power is traded in that way, the exposure is moved from the price received for the production, to a risk of providing the volumes traded.

Operations cannot guarantee a fixed production volume at any given time, but it can secure the assets are able to produce whenever the wind is there. By applying a more commercially oriented mindset in Operations, mid & long-term trading can be assisted by:

• Increased focus on availability forecasts both mid and long-term

• Incorporating long-term trends from the power markets into the planning of securing the right level of availability of assets at the most valuable time

Short-term trading

As of January 2023, power markets in Ørsted Europe contribute with

• Power balancing services for assets with a total capacity of 9.377MW, of which 56% are Ørsted owned & 44% are externally owned

• A total of 28 windfarms, 20MW storage units, 339MW of gas peakers as well as refinery plants

• With a total of ~2000 turbines and capability to deliver electricity to more than 7.4mio households (DK consist of 2.2mio and UK of 27.5mio)

The short-term trading team are present in three different markets, adding to the longterm trading with the following

• Day ahead market

• Intraday market

• Imbalance market

All power produced from our assets is exposed to these markets, independently of the subsidy scheme or commercial contract, as the subsidy schemes are often relative to the day ahead auction price. The purpose of the intraday and the imbalance market is to make sure that production and consumption meet, hence exactness of production forecast is key.

Day ahead Market

Auction based, merit order (price set by the most expensive needed asset), one price each hour in each price area.

Intraday Market Imbalance Market

Mainly using bid/offer traded live in market. Price differs from transaction to transaction. Several intraday auctions

Like the day ahead market, the price is set by the most expensive needed asset. The price takes departure in the day ahead price

• 48 daily settlement periods in UK (30min)

• 96 daily settlement periods in Germany (15min)

• 24 daily settlement periods in NL (60min)

• 24 after-market products in NL

• 3 intraday auctions for 24, 18 and 6 hours in 2 countries

if the market is long, more production than consumption, the price for additional power is lower than the day ahead price

If the market is short, less production than consumption, the price for additional power will be higher than the day ahead price

How to integrate the market information in Operations - Commercially Aligned Operations

Bio Energy, managing the Danish assets, has seen great benefit from closer collaboration between the power producing assets and the trading floor. The expectation is that some of the same potential can be achieved in the international portfolio. Though, due to the different nature of wind power compared to conventional powerplants and the scale of sites, the approach in Operations is slightly different.

Where the communication in Bioenergy is directly between site and the trading teams, the intention is to incorporate some of the market price signals into the internal Operation decision processes instead, as the Market team is not able to handle the dialogue with so many sites, both practically but also because the dialogue can limit them in trading perspective due to Remit obligations.

With Commercially Aligned Operations, the intention is not to create more tools and processes for site and back office to work with, but to consolidate the existing processes by adding a solid financial evaluation layer. Further, as a leader it is important that you understand how the production value is realized and how value is generated and can be increased, hence the focus on the value adding work should be increased all the way from back-office support functions to the sharp end execution. Hereby the decision making should be easier and the quality of the availability data we can deliver to our stakeholders should increase.

The CEO angle

Operations need to continue the improvement journey and proudly share across the organization

The focus areas Mads discussed align with our core KPIs:

• As a leader, you should spend your time where you bring value. 2023 is likely to be a turbulent year

• Important to empower your people and be curious and flexible. Technology and digital opportunities are important to leverage

• Curiosity and perseverance are the ways forward. Be prepared to consider all things, it is not about rapid growth but value-added growth

• Always be trustworthy and be ready to accept changes

Why Strategic Joint Ventures

In Ørsted, we experience an increased interference with Joint Venture partners especially in the early phase projects. This is to a large degree driven by the massive changes in the markets and the competetive landscape we operate in.

When we enter strategic partnerships, we get partners to share the risk with and to share the massive requirements for raising capital. Partnering up also enables us to participate in more auctions to compensate for the lower chances of success (DEVEX

sharing). We leverage the knowledge and experience from each partner with a common goal, and potentially provide access to political support through local partners’ connections in new markets. It allows us to maximize the value creation, develop competitive advantages, and leveraging synergies from our or partners existing or future activities.

As a leader it is important to understand that entering a partnership comes with both cost and benefits, and that successful partnerships are achieved when both parts have something to gain.

“A couple does not assume a converged, single identity when they get married. Instead, they retain their own individuality and join to build a life together, united by shared interests and goals, each bringing something different to the union.

In business, regardless of the industry, the most successful and enduring partnerships are those created with a respect for identity as the constant guiding principle. “

- Carlos Ghosn

Why Strategic JV

• Ørsted has been First mover in the offshore industry

• For the first 25 years, we were operating in a BLUE ocean market

• Competitive landscape has changed a lot in recent years

• Fierce competition, both from existing players but also from oil majors and other newcomers

• Increasing number of opportunities through auctions, but lower chance of success

• Increasing bid requirements and fierce price competition

• Bottlenecks due to small number of turbine suppliers and shortages of cable suppliers, installation vessels etc.

• Need to adapt to survive and thrive in a RED ocean market

Thoughts from the outside

AIP Management represents major Danish pension funds with investments in the energy sector among others. AIP invested in more than 25 assets across the globe, of which 3 with Ørsted (Anholt, Gode Wind II & Walney extension).

AIP’s partnership model focuses on partnerships with experienced partners with similar values and integrity, taking multiple roles in the management and ownership of the asset.

Excellence

• Extensive experience with development, construction, and operation

• Always looking for improvement opportunities

Integrity

• Health and safety are non-negotiables

• Focus on training across the organization

Ownership

• Co-shareholder/owner

• Operator responsibility

• Good contractual framework

Why is Ørsted a good partner for AIP?

As a financial investor, we look for partners with complementary competencies

Late-stage development, under construction or operational assets

Focus on stable cash flow

Fixed price agreements to support reduce risk

Investment size from 70 EURm to +500 EURM

Hold-to-life with duration of at least 15 years

Equity: as owners

High yield debt: as lenders

Expectations to me as a leader

For Ørsted to keep being profitable in an increasingly fierce competitor landscape, it is essential that you as a leader in Operations are very much aware of the commercial aspect to our business. It is critical we know and push for the value of decisions we make, and we are able to prioritize the right work. We should provide accurate short- and long-term capacity forecasts in order to do accurate budgets. We need to be able to realize the best value of the production in the power markets.

As a leader, you should spend your time where you bring value, both for your team but also for the greater Ørsted. As a leader, it is vital to understand that entering a partnership comes with both costs and benefits. Successful partnerships are achieved when both parts have something to gain.

In essence, you should ensure we optimize the value for Ørsted looking at the entire value chain. This will force you to break down silos and help your team to see that Operations, whether you are in a region or in Global Operations, are a part of the Ørsted value chain. Optimization only happens when we in Operations acknowledge that we are part of a bigger organization and considering the wider context.

In case you need support or inspiration to any of the commercial aspects, please reach out to Business Intelligence & Diagnostics or Product & Contract Management.

Video summary

Module 5

The Future of Leadership

Exploring what the future asks of us as leaders and how we can be the role models who enable our people to succeed for Ørsted.

As leaders, our primary responsibility is to foster the growth and success of our team members. Ensuring that our employees are thriving and committed to working at Ørsted is a crucial element of our leadership role. We must strive to retain our highly skilled and valuable workforce. To achieve this, it is essential to create an environment where everyone is heard and has the freedom to express their thoughts and ideas – an environment where we have psychological safety.

As leaders, we are more effective in our roles if we are mindful of our biases. Avoiding the trap of constantly reacting to problems (firefighting) and instead taking a step back to reassess the situation and refocus our energy and be more proactive is another key element of strong leadership. Additionally, we can benefit from cultivating a work environment that is free of unhealthy stress and fosters a balanced work-life for all our employees.

Mikkel Mæhlisen, sponsor of The Future of Leadership

Being a responsible business is fast becoming a differentiator but soon it will be an imperative. That means we won’t be rewarded for being a responsible business, but we will be punished if we are not.

At the same time, what it takes to be seen as a responsible business is rapidly growing in complexity. It is not only about having a responsible product, which Ørsted to a large extent has, but also about how we leverage technology responsibly, go into new markets responsibly, and build a responsible culture as leaders.

Research conducted by Rehumanize Institute and Accenture shows there is a correlation between being a top responsible business and financial returns. In fact, the leading responsible businesses have a 14x higher revenue growth and 4x higher net profit growth than the worst performing companies.

The research also indicates there are 4 key pillars where successful responsible businesses are particularly strong and dedicated, and which therefore can be valuable for us as leaders to focus on: Future Focus, Ecosystem Action, Responsible

Business Indicators, and Impact Leadership. Impact leadership is the pillar that has the strongest correlation with positive financial returns. Impact leadership is about leadership role modeling and creating an inclusive culture that enables others to drive the change.

Thus, the study suggests if we as leaders work strategically with the four pillars, we can lead the way toward a more responsible future and ensure significant financial returns as well – creating a world that runs entirely on green energy.

Consider how it might be valuable for you as a leader to work with the 4 pillars of Responsible Business :

The future of leadership is closely related to the Responsible Business Transformation that all future-forward organizations will go through

1. Future Focus

I.e., looking at all decisions through a future-focused lens by mapping and understanding where the world is heading in regards to signals, trends, and technological development and also ensuring continuous learning in our organization. This means, we as leaders make sure we are not the only ones who have insights about what the future might bring. Our people must also have those insights to create a common foundation for how we collectively work to bring Ørsted into the future.

2. Impact Leadership

I.e., setting an intentional direction by role modeling the behaviour we want to see in our organization, building an inclusive and diverse culture where our people see and feel the direction we want to move in, and collectively identify and take responsibility for the actions we take.

3. Ecosystem Action

I.e., working closer and better together with our external ecosystem (suppliers, partners, customers) but also our internal ecosystem (other departments, divisions) and eliminating silos within our own internal parts of the Ørsted universe.

4. Responsible Business Indicators

I.e., developing performance indicators to measure and assess progress beyond traditional KPIs. When we are doing things in a new way we also need to reassess what we measure and how we measure it. Think about which “number on the wall” will motivate your people to do the right thing.

Most of us do not have the power in our organizations to make all the changes that we think are important. However, we generally have more power than we think we do. So, what can be valuble is to think about what your circle of power is and - within that circle – role model how to become an even more responsible business.

You can find the Responsible Business Study by going to this link: https://tinyurl.com/kxyrj397

Mastering the two colors of value creation

Abraham Lincoln is credited with saying: “If I had 4 hours to cut down a tree, I would spend 3 hours sharpening the ax”. In other words, we should do our homework before we take action. That is easy to say, but often hard to do, as we are often biased toward action in organizations. We want to solve issues as fast as possible, so we skip the “understanding the issue” part. A helpful tool to doing our homework properly can be the two colors of value creation, which is about becoming better at value creation by applying the right leadership tools to first understand what the issue is.

As leaders, we face two kinds of issues in our companies; “complicated issues” (blue) and “complex issues” (red). We become better value creators by having awareness of which kind of issue we are facing. In the “complicated” (blue) sphere, people

work within structured processes and regulations. In contrast, the “complex” (red) sphere is characterized by experimentation and lack of structured processes and regulations. Both blue and red value creation principles are essential for organizational success and are often intertwined, but it is important to know whether we are solving a blue or a red issue in order to apply the right tools.

Trying to solve blue issues with red tools generates waste through chaos – lack of structure and use of experience gets us stuck. Trying to solve red issues with blue tools generates waste through overload –we don’t get anywhere and remain stuck in red tape.

Blue and red issues

When dealing with blue and red issues, consider exploring the following principles:

Make sure you really understand an issue before you set out to solve it – is it blue or red?

Step away from the planning paradigm when you deal with surprises

Build teams around problems so you are able to set up a team that is right for that particular problem

Lead differently depending on the talent you have available and the situation you are in

Accomplish as a team – don’t produce heroes and losers by elevating singular achievements

Share responsibility by giving out principles rather than rules

Consider if you have all relevant knowledge where and when it is needed – and that it is shared with all relevant people

Make a habit of constantly observing your environment and prepare for surprises

Source: Mike Raven

Unbiasing bias

Understanding your own, others’ and your organziation’s biases is a powerful leadership tool. There are many human biases and to add to the complexity it is not enough to solely understand human bias. As the world is rapidly digitizing and AI is being integrated into all types of work processes, machine bias is equally important. By understanding and exploring biases, we as leaders, can work towards creating a diverse, fair, and inclusive culture as well as eliminate potential unintended negative consequences of the actions we take.

Humans & bias

Definition of bias: A strong feeling in favor of or against one group of people, or one side in an argument, often not based on fair judgment (Oxford Dictionary).

When we display bias as human beings, it is rarely done out of a will to harm others, but because our brains are wired to discriminate between what’s good and what’s bad, what’s safe and unsafe. However, we receive 11 million bits of information every moment and can only consciously process 40 bits. Therefore, the vast majority of the decisions that we make are unconsciously based on our biases. That is often not helpful.

There are two forms of unconscious bias:

• Cognitive unconscious bias

Which means how we treat people differently

• Structural unconscious bias

Which means that different individuals might not be given the same opportunities

Biases affect us and our decision-making processes in a number of different ways in all the stages:

• Our Perception – how we see people and perceive reality

• Our Attitude – how we react toward certain people

• Our Behaviours – how receptive/friendly we are toward certain people

• Our Attention – which aspects of a person we pay most attention to

• Our Listening Skills – how much we actively listen to what certain people say

• Our Micro-affirmations – how much or how little we comfort certain people in certain situations

Some of the most important biases are (this is not a full list, but look here e.g. to see a long list of biases: https://en.wikipedia.org/wiki/List_of_cognitive_biases):

• Attribution bias: humans are quick to judge and falsely assume things about a person without knowing their full story

• Affinity bias: the tendency to warm up to and prefer people that are similar to ourselves

• Confirmation bias: Tendency to search for, interpret, favor, and recall information in a way that confirms our preexisting beliefs or hypotheses

• The halo effect: tendency to think everything about a person is good because you like something about that particular person

Let’s keep in mind that privilege is often invisible to those who have it. The more privilege we have, the less bias we experience. As a senior leader in Ørsted, you are almost certain to be a very privileged person – all things being equal. Teaching

yourself to become aware of your own biases, ensure that you get feedback from people who are different from you to get a more diverse perspective, and keeping your privilege in mind when evaluating others can be extremely helpful as a leader.

Machines & bias

With the rise of AI, our decisions will be either made entirely by algorithms, or influenced by them indirectly. The amount of decisions being made by these algorithms is increasing day by day. This is not in itself a bad thing. E.g., it is extremely helpful that our accounting program reads our receipts and categorizes a purchase for us automatically. Smart algorithms can be great, and a major time saver.

With machines making decisions, we may think that because there are no feelings involved, they therefore are objective. But that is not the case. For one, human bias

How do machines learn (our biases)?

gets transferred from the human brain to the machine’s data set. Thus, the AI applies these biases and amplifies them. Also, AI algorithms are trained on data, and data is, by definition, historic. How we did things in the past, we very often do not want to replicate in the present or build our future on. E.g., an algorithm can be sexist because it is trained on historic data that – correctly – shows that there were more men in leadership roles than women (there still is). But this does not resemble the world that we want. So if we want to build a better and more responsible future, we do not want to replicate the past, but improve upon it.

Unsupervised Supervised

Reinforcement

Humans

Human bias directly implemented, and limited data sets.

Finds its own patterns in data Learns from the environment

Bias from the humanselected data set as well as biased society.

Environment may not cover everything the machine needs to learn.

Source: Anita Schjøll Abildgaard

Things to consider, as a leader, to avoid machine bias:

Identify potential sources of bias

Set guidelines and rules for eliminating bias and procedures

Identify accurate representative data

Document and share how data is selected and cleansed

Evaluate models for performance and select least-biased, in addition to performance

Monitor and review models in operation

Signals from the future of work, leadership and culture

The world is changing very fast, and the pace of change is accelerating day by day. In fact, today is the slowest it will ever be. In this fast-paced environment, where change is accelerating and the needs of customers and employees are shifting rapidly, we can stay ahead as leaders by looking for signals to help guide our decision-making.

Recent research conducted by Accenture Song underlines the challenges we face as leaders. A staggering 90% of the leaders in the study say that the current needs of customers and employees are changing faster than their businesses can adapt. But looking for and understanding signals from the future of work, leadership and culture (and beyond) we can help ourselves stay ahead of the game.

Think about some of the following signals and what they might mean for your leadership:

Hybrid and asynchronous work: As our teams become increasingly dispersed and globalized, it is essential to create an environment that supports flexible schedules and remote collaboration. We can do this by embracing hybrid and asynchronous work. Being very conscious about when we should be together physically or virtually, and what we do together in those situations.

Up and reskilling: Professional development has become more critical than ever before because technology develops faster and because we need to become better at working together as teams. In 2014, on average employees needed to up-and reskill for three days per year. In 2018 that had ballooned to a staggering 36 days. To keep up with the pace of change, we therefore not only need to take more time out to learn, but also to be better at learning by doing.

Wellbeing: 50% of European workers consider stress to be common in their workplace according to research conducted by the EU. Clearly, this is not tenable. As leaders we can play a huge part in whether our people are stressed or whether they are thriving. Business success used to be all about hardware, then it became all about software. While those two remain important, signals and trends point toward that the future of success will be about humanware.

What can we as leaders do to help our people thrive?

Helping people thrive by applying the Fundamental 4s to our leadership

Despite the hyper-complexity and exponential development of technology, human beings and their underlying motivations have remained the same since the dawn of time. While technology may be developing exponentially, our brains do not. Understanding the core motivations of humans can thus serve as a gravity assist to help ourselves and our people thrive in this ever-changing and accelerating world.

All of us share the same common desire to become better. From the first breath, to the first step, day at school, work, and in the gym we are on a constant quest toward becoming the better me. What research suggests is we can divide this quest into four different realms, which can be a helpful tool for us, as leaders, to support this quest in others: BE, DO, FEEL, and LOOK better.

BEbetter DObetter LOOKbetter FEELbetter

BE Better is about honoring values and moral landscape, making people feel like a better person.

• How do you as a leader help your people honour their values?

E.g., by helping them understand how their efforts make Ørsted achieve its purpose.

DO Better is about enhancing performance, skills, competencies and results in making people more successful and capable.

• How do you as a leader help your people grow, develop, succeed?

E.g., by creating a culture of psychological safety and continuous learning.

FEEL Better is about triggering senses and emotions leaving people in a better emotional state.

• How do you as a leader create a positive psychological and physical environment? E.g., by considering the food that is served, how the work environment looks, or social activities you do together.

LOOK Better is about improving social status creating appreciation and recognition.

• How do you as a leader recognize your people for their efforts?

E.g., like handing out a Brave Penguin award, like they do in the Americas.

Activating Human Potential

Keep in mind that sometimes it can be valuable as a leader to take a walk in the forest, listen to your inner voice, and ultimately embrace that we are all human beings. As a leader your impact leadership makes the difference.

Be the 1!

Find a problem to fall in love with

Video summary

Thank you to all facilitators, module contributors and the Capstone participants for making this journey a memorable one.

A special thanks to the authors and contributors of the book - Peter Stensgaard Hansen, David Bjerrum Reeckmann, Jonas Hogstrand, Sebastian Kotulla, Russell Simpson, Thomas Krogh, Lau Kofod Linnet, Rehumanize Institute and Christine Sønnichsen.

Capstone

Powered by Ørsted & Rehumanize Institute

Trykt 2023 1. oplag