Why Leaders Debate Logos While Energy Drains the Bottom Line: The Comfort of Bike Sheds, the Cost of Ignoring Energy

Reading Time: 20 minutes

Executive Summary

The phenomenon of organizational bike shedding describes how decision-makers gravitate toward simple, comfortable discussions about trivial matters while avoiding complex strategic challenges. In Indonesian boardrooms, executives spend hours debating logo redesigns and office color schemes while energy costs silently erode profit margins. This cognitive bias has become particularly costly as energy prices climb and sustainability requirements reshape competitive dynamics.¹

For decades, Indonesian corporations treated energy as an unavoidable utility expense rather than a strategic variable. Industrial facilities operated aging equipment, maintained inefficient processes, and accepted rising electricity bills as business realities. The government's repeated postponement of renewable energy targets from 2025 to 2030 reinforced this complacency.² However, multiple converging pressures have transformed energy from an afterthought to a boardroom priority requiring immediate strategic attention and substantial capital allocation.

Today, Indonesian businesses face a dramatically different energy landscape. Rising tariffs, stricter emissions reporting requirements, supply chain sustainability demands, and competitive pressures from energy-efficient competitors have created conditions where energy strategy directly impacts market position and profitability. This article examines why Indonesian corporations historically neglected energy management, analyzes the forces driving current strategic shifts, and explores the organizational and psychological barriers that continue impeding effective energy transformation despite growing urgency.

The Psychology of Organizational Bike Shedding

Parkinson's Law of Triviality explains that organizations devote disproportionate time to simple matters that everyone can understand while spending minimal time on complex issues that few comprehend. The term "bike shedding" originated from an example where a committee spent hours debating the color of a bicycle shed while approving a nuclear reactor budget in minutes. Everyone feels qualified to discuss shed colors, but few understand nuclear engineering.

In Indonesian corporations, this pattern manifests in boardrooms where executives passionately debate office renovations, corporate event themes, and marketing materials while energy strategy discussions receive cursory approval with minimal engagement. The psychology underlying this behavior includes multiple reinforcing factors. Trivial decisions feel safe because the stakes seem low and the outcomes visible. Everyone can contribute opinions on colors and logos, creating inclusive discussion dynamics that build social cohesion.

Energy strategy discussions trigger opposite dynamics. The technical complexity creates discomfort for non-technical executives who fear revealing knowledge gaps. Financial implications stretch across multiple years with uncertain payback periods and performance risks. Implementation requires disrupting established operational patterns and challenging powerful internal stakeholders who control existing budgets and procedures. The combination of complexity, uncertainty, and political friction makes energy strategy psychologically aversive, encouraging decision-makers to defer serious engagement.

The result is predictable avoidance. Boards approve energy strategies in principle but never allocate serious executive attention or adequate resources. Energy discussions get relegated to facilities departments with limited authority and budgets. Strategic planning processes treat energy as an operational detail rather than a competitive variable. Meanwhile, comfortable discussions about branding, office design, and corporate events consume executive time because everyone feels competent to participate and the emotional stakes feel manageable.

Indonesia's Historical Energy Complacency

For most of Indonesia's modern industrial development, energy strategy deserved limited executive attention. Electricity tariffs remained relatively stable and predictable. PLN's monopoly position meant limited options for industrial customers beyond accepting grid power at regulated rates. Natural gas supplies from domestic production provided affordable thermal energy for process industries. The combination of stable prices, limited alternatives, and regulated markets made energy management a passive acceptance rather than an active strategy.

Indonesian energy policy priorities focused on expanding access and supply rather than efficiency or sustainability. The government emphasized coal-fired power plant construction to support industrial development and economic growth. Subsidized fuel prices for certain sectors reduced pressure for efficiency improvements. Environmental regulations remained limited and enforcement inconsistent. Without external pressure from regulators, customers, or competitors, corporations had minimal incentive to invest in energy efficiency or renewable alternatives.

Corporate culture reinforced this neglect. Manufacturing facilities operated the same equipment configurations for decades without systematic efficiency reviews. Facilities departments maintained reactive approaches focused on avoiding outages rather than optimizing consumption. Capital investment processes favored production capacity expansion over efficiency improvements. Performance metrics measured output and revenue without tracking energy intensity or emissions. The institutional memory and incentive structures embedded energy complacency throughout organizational systems.

The Rising Cost of Energy Neglect

The comfortable era of energy neglect has ended. Multiple converging forces now impose significant penalties on corporations that continue treating energy as a passive expense. Electricity tariffs have increased substantially over the past decade as PLN adjusts rates toward cost recovery levels while reducing subsidies. Industrial electricity prices now represent meaningful portions of manufacturing cost structures, creating direct impacts on profit margins and competitive positioning.

International market access increasingly depends on sustainability credentials. Export-oriented manufacturers face customer requirements for emissions reporting, renewable energy procurement, and science-based targets. Global brands audit their supply chains for environmental performance. European regulations like the Carbon Border Adjustment Mechanism will impose costs on emissions-intensive imports. Indonesian manufacturers competing for international contracts must demonstrate energy efficiency and renewable energy commitments or lose market opportunities.³

Domestic competition dynamics have also shifted. Progressive Indonesian corporations implementing energy efficiency and renewable energy procurement gain cost advantages over competitors maintaining legacy approaches. As more firms adopt sustainable practices, laggards face reputational risks with environmentally conscious consumers and investors. Talent recruitment increasingly favors employers demonstrating environmental responsibility. The competitive landscape now rewards energy strategy rather than tolerating neglect.

Financial markets add pressure through ESG investment criteria. Listed companies face shareholder questions about climate risks and energy transition strategies. Institutional investors screen portfolios for environmental performance. Credit rating agencies incorporate climate risks into assessments. Access to green financing and sustainability-linked loans requires demonstrable energy management. The capital markets that corporations depend on now demand energy strategy transparency and performance.

Indonesia's Renewable Energy Targets and Corporate Implications

Indonesia's government has established national renewable energy targets reflecting international climate commitments and energy security objectives. The original target of achieving 23% renewable energy in the national energy mix by 2025 has been postponed to 2030 in updated planning documents, acknowledging implementation challenges and slower-than-expected progress.² However, this delay has not reduced pressure on corporations as other mechanisms drive corporate renewable energy adoption.

PLN's electricity supply plan for 2025-2034 includes substantial renewable energy capacity additions through solar, wind, hydro, and geothermal projects.⁴ These grid-level developments create infrastructure supporting corporate renewable procurement. Regulations enabling corporate power purchase agreements and rooftop solar installations provide direct mechanisms for companies to source renewable electricity independent of grid mix transitions.

The regulatory landscape includes Presidential Regulation No. 22/2017 mandating energy management for large industrial facilities and the Indonesian Sustainable Finance Taxonomy providing frameworks for green investment classification. While enforcement has been inconsistent, these policies establish foundations for future compliance requirements and create expectations that pressure corporate behavior even before strict enforcement.

The Strategic Shift: From Neglect to Priority

Progressive Indonesian corporations are now treating energy as a strategic priority requiring executive attention and substantial investment. Leading manufacturers across automotive, electronics, textiles, food processing, and other sectors have appointed dedicated energy managers reporting to senior leadership. Boards now receive regular energy performance reports and renewable energy procurement updates. Capital allocation processes explicitly evaluate energy efficiency alongside other investment criteria.

Companies are establishing ambitious renewable energy targets. Some have committed to 100% renewable electricity by specific dates. Others have set interim targets like 30% renewable by 2030 or 50% by 2035. These commitments signal strategic reorientation recognizing energy as a competitive variable rather than a passive expense. The public nature of these targets creates accountability mechanisms driving implementation rather than allowing comfortable neglect.

Implementation approaches vary. Some companies prioritize rooftop solar installations on manufacturing facilities and warehouses, taking advantage of declining technology costs and improving regulatory frameworks. Others focus on power purchase agreements for utility-scale renewable energy. Many pursue comprehensive energy efficiency programs addressing motors, lighting, HVAC, compressed air, and process optimization before investing in renewable supply. The specific tactics differ, but the strategic orientation toward active energy management represents a fundamental break from historical neglect.

This transformation extends beyond large corporations. Medium-sized manufacturers are increasingly evaluating energy efficiency and renewable options as competitive necessities rather than optional initiatives. Industry associations facilitate knowledge sharing about successful implementations. Technology providers and energy service companies report growing demand from Indonesian clients previously uninterested in their services.⁵ The market shift from neglect to engagement is accelerating across the Indonesian business landscape.

Technology Options and Implementation Realities

Indonesian corporations now have access to diverse technology options for improving energy performance. Solar photovoltaic systems have experienced dramatic cost reductions making rooftop installations economically attractive for many industrial and commercial facilities. Current prices enable 4-6 year payback periods in Indonesia's solar radiation conditions. Regulatory frameworks for grid-connected solar have improved, though challenges remain in interconnection procedures and net metering policies.

Energy efficiency technologies offer immediate impact with shorter payback periods. LED lighting retrofits typically achieve 2-3 year returns while improving lighting quality. Variable frequency drives for motors enable 20-40% energy savings in applications with variable loads. Compressed air system optimization addresses one of the most inefficient industrial energy uses. Building management systems provide integrated control and optimization across HVAC, lighting, and auxiliary systems.

Implementation challenges remain substantial despite improving technology economics and growing management commitment. Financing mechanisms for efficiency and renewable projects remain underdeveloped in Indonesian financial markets. Project preparation requires technical expertise that many companies lack internally. Coordination with PLN for grid-connected renewable installations involves bureaucratic processes. Organizational change management accompanying technology deployment requires sustained executive sponsorship and cross-functional collaboration.⁶

Organizational Barriers and Change Management

Declaring energy strategy a priority proves easier than executing effective transformation. Organizations face deep-rooted barriers that resist change even when senior leadership commits to new directions. Facilities and operations teams have limited experience managing complex energy projects and may resist initiatives perceived as threatening their established roles and procedures. Budget processes embedded historical consumption patterns resist reallocation toward efficiency investments with uncertain returns.

Technical capacity gaps constrain implementation. Many Indonesian corporations lack internal expertise for investment-grade energy audits, technology specification, contractor management, and performance verification. External consultants provide services but face trust issues and coordination challenges. Building internal capacity requires sustained investment in training and hiring that competes with other human capital priorities. The knowledge gap between strategic intent and technical execution capability remains a critical constraint.

Measurement and verification challenges undermine accountability. Without robust monitoring systems, organizations struggle to track energy performance and verify savings from efficiency investments. Baseline establishment, normalization for production variations, and attribution of savings to specific measures require methodological rigor that exceeds normal operational reporting. The inability to measure and demonstrate results reinforces skepticism and weakens business cases for continued investment.

Successful energy transformation requires sustained executive attention that contradicts comfortable bike shedding patterns. Leaders must resist gravitating toward trivial decisions and maintain engagement with the complex, uncertain, and uncomfortable process of organizational energy strategy implementation. This demands conscious effort against psychological defaults favoring simple over complex and certain over uncertain.

Industry Sector Dynamics and Competition

Energy strategy importance varies across industrial sectors based on energy intensity, competitive dynamics, and customer requirements. Energy-intensive industries including steel, cement, petrochemicals, and textiles face the highest pressure due to energy representing substantial portions of production costs. Small efficiency improvements translate directly to meaningful profit impacts. These sectors are leading Indonesian industrial energy transformation with dedicated programs and substantial investments.

Export-oriented manufacturing sectors face intense pressure from international customer sustainability requirements. Electronics, automotive components, and garment manufacturers serving global brands must demonstrate environmental performance meeting customer standards. These industries often implement energy efficiency and renewable procurement ahead of domestic competitive pressure because international market access depends on credible sustainability credentials.

Consumer-facing sectors including retail, hospitality, and food service experience different dynamics. While energy costs are material, brand reputation and customer perception drive sustainability initiatives. Corporate social responsibility reporting and stakeholder engagement create pressure for visible renewable energy adoption. Solar installations on retail locations and hotel properties serve dual purposes of cost reduction and marketing communications demonstrating environmental commitment.

Within sectors, competitive dynamics create leader-follower patterns. Progressive companies implementing energy efficiency gain cost advantages and sustainability credentials. Laggards face competitive pressure as customers and supply chain partners favor environmentally responsible suppliers. As more companies adopt aggressive energy strategies, those maintaining legacy approaches face growing disadvantage. Competitive spillover effects accelerate sector-wide transformation beyond what individual company economics might justify.

Policy Environment and Government Support

Indonesia's policy environment for corporate energy transformation includes regulatory requirements, voluntary programs, and financial incentives with varying effectiveness. Presidential Regulation No. 22/2017 mandates energy management for large facilities but enforcement remains inconsistent. The Indonesian Sustainable Finance Taxonomy provides frameworks for categorizing green investments but adoption by financial institutions proceeds gradually.⁷

PLN's renewable energy procurement plans and grid development create infrastructure supporting corporate renewable access. Regulations enabling corporate power purchase agreements and rooftop solar provide mechanisms for direct renewable procurement. However, interconnection procedures remain complex and timeline uncertainties create project development challenges. Regulatory improvements continue but lag behind corporate demand for streamlined processes.

Government incentives for renewable energy and efficiency include tax benefits, accelerated depreciation, and financing support through state-owned institutions. Utilization rates remain below potential due to limited awareness, complex application procedures, and capacity constraints in administering agencies. International development programs provide technical assistance and financing mechanisms complementing domestic government support.⁸

The Path Forward: From Comfort to Commitment

Indonesian corporations face a fundamental choice between continuing comfortable avoidance of energy strategy or embracing the uncomfortable work of genuine transformation. The bike shedding tendency to focus on trivial matters while avoiding complex challenges will not disappear. However, external pressures now impose significant penalties on continued neglect. Rising costs, market access requirements, competitive dynamics, and investor expectations demand strategic energy management.

Successful transformation requires honest acknowledgment of psychological barriers and organizational patterns enabling avoidance. Executives must recognize their tendency to gravitate toward comfortable trivial decisions and deliberately counteract this bias through explicit governance mechanisms. Board agendas must allocate meaningful time to energy strategy with advance materials enabling substantive discussion. Executive compensation should include energy performance metrics creating personal accountability.

Organizations need realistic timelines recognizing that energy transformation requires years not months. Quick wins through lighting retrofits and operational improvements can demonstrate value and build momentum. However, substantial renewable energy procurement and comprehensive efficiency programs require sustained investment in technical capacity, financing relationships, stakeholder alignment, and change management. Leaders must maintain commitment through implementation challenges rather than reverting to comfortable avoidance when difficulties emerge.

The competitive landscape will increasingly separate energy leaders from laggards. Companies that overcome organizational bike shedding and commit to energy transformation will gain cost advantages, market access, and competitive positioning. Those that continue debating logos while energy drains profitability will face declining competitiveness, restricted market access, and eventual strategic irrelevance. The choice is clear even if the execution remains challenging.

Conclusion: The Real Cost of Comfortable Decisions

The bike shed remains more comfortable than the power plant. Discussing office colors and logo revisions will always feel easier than wrestling with energy strategy complexity. However, comfort has become expensive. Indonesian corporations can no longer afford the luxury of avoiding energy transformation while focusing executive attention on trivial matters. The external environment has fundamentally changed creating conditions where energy strategy directly determines competitive survival.

This transition from neglect to priority represents one of the most significant strategic shifts facing Indonesian business leadership. It requires confronting psychological biases toward comfortable avoidance, building unfamiliar technical capabilities, making substantial capital commitments with uncertain returns, and sustaining implementation efforts through inevitable difficulties. These challenges explain why many organizations continue gravitating toward bike shed discussions despite knowing they should address energy strategy.

Yet some Indonesian corporations have successfully made this transition. Their experience demonstrates that effective energy transformation is achievable with honest acknowledgment of barriers, deliberate governance mechanisms counteracting avoidance tendencies, sustained executive commitment, and realistic implementation timelines. The leaders emerging from this transition will define competitive dynamics across Indonesian industry sectors for the coming decade. The laggards debating logos while energy costs erode profitability will discover that comfortable decisions ultimately prove most expensive.