Harvard Business Review said on Mar. 27 that many businesses continue to view energy costs as fixed and outside of their control, similar to how they see rent. However, the publication reports that this approach is becoming outdated as fluctuations in energy prices and supply are now impacting companies’ resilience, strategy, and competitiveness at a higher level.
The article highlights that small and medium-sized businesses in particular have historically treated energy expenses as predictable necessities rather than strategic concerns. According to Harvard Business Review, “Most businesses, especially small to medium-sized ones, still treat energy like rent: essential, predictable, and largely outside managerial control.” The piece continues by noting that “That era is ending as energy prices and supply volatility shift from being marginal operating-cost questions to board-level resilience, strategy, and competitiveness issues.”
This change means company leaders may need to take a more active role in managing their organizations’ exposure to changes in the energy market. As price swings become more common and impact bottom lines directly, decision-makers could be required to develop new strategies for addressing these risks.
The discussion reflects broader trends affecting global markets where external factors such as geopolitical tensions or shifts in supply chains can cause rapid changes in operational costs for companies of all sizes.
Observers say that recognizing the strategic importance of energy management could help firms build greater resilience against future uncertainties.
