There is much discussion and even more speculation about the utility grid of the future. A plethora of information sources, technology options, DER solutions providers, and governing bodies exist. Each is seeking to play a role in shaping a preferred path forward. In the midst of it all, a high degree of uncertainty exists, especially within the electric utility sector. Comprehensive strategic templates and purposeful directional pathways are noticeably absent en route towards a Utility 2.0 future.
What Are the Implications of this Strategic Void?
In recent years, a palpable and growing sense of discomfort can be observed within the energy sector, especially in terms of identifying intelligence that is actionable and easily deployable. This “Utility 2.0 angst” manifests itself in three primary ways:
1) Avoidance Angst — Actively or passively denying that a Utility 2.0 future exists
Electric utilities caught in this state of angst try to ride the fence between two worlds, taking on a posture similar to a Heisman trophy stance. The public arm of support appears to hold the Utility 2.0 “ball” close to the organizational core, while the arm of “true belief” stiff arms the external world that seeks to get too close. The reality is that one player, no matter how dominant, can only stiff arm for so long before being overtaken by a growing number of faster moving external competitors. If an avoidance mindset exists, the first step is to admit that avoidance is the primary issue and then to look at the evolving energy landscape in a more objective and open manner.
2) Analysis Angst — Seeking a 2.0 pathway within a constrained 1.0 construct
I must confess that I am both appreciative and sympathetic of those caught in this state of angst. They know that they need to move forward, but are overwhelmed by technology and business model options and various political pressures. They don’t want to look bad or make the wrong move, so they continually review the possible options. Ultimately, the uncertainty of “what ifs” outweigh credible information that is “good enough” for prudent decision making. Additionally, a certain measure of strategic intuition and foresight may be required that is not directly tied to a set of spreadsheets and graphs. Analysis angst can be channeled into “kicking the can” another year, or conversely, can result in knee-jerk reactions that pursue isolated initiatives outside the context of a larger holistic vision.
3) Adventurer Angst — Pioneering new and uncertain pathways
These are the few leaders of the pack that move ahead amidst a steady stream of silent and vocal onlookers. Adventurer angst is typically driven by a strong desire and need to demonstrate some measure of forward progress. The danger in this angst is that people can be susceptible to overly ambitious or impulsive decision making. Early market movements can also be linked with greater degrees of financial risk, due to higher costs, price uncertainties, and inefficiencies caused by immature markets. With that said, the value of rapidly accelerating ahead of industry competitors can be priceless.
How Can the Utility Industry Alleviate the Angst?
Utilities can alleviate the angst by pursuing strategic planning efforts that incorporate three sequential and interconnected components.
1) A Holistic Vision — Crafting a high-level plan that comprehensively considers multiple facets and new opportunities within the evolving utility landscape
2) A Systematic Framework — Synthesizing the high-level vision into a framework of selectable and incremental steps
3) A Collaborative Engagement Approach — Working with external entities to develop actionable steps that are built upon a foundation of collective empowerment and mutually beneficial partnerships
Getting one of these right is a challenge in itself. Trying to seamlessly bring all three of these together in a thoughtful and deliberate manner can feel like scaling an insurmountable mountain. This is why, the most important and essential ingredient necessary to enable a successful Utility 2.0 transition is mindset. The highest levels of utility leadership must be aligned and unified around the belief that change is needed, that it should be done in a proactive and deliberate manner, and will involve pursuits that fall outside of the traditional status quo construct. Utility 2.0 will involve the development of innovative business models, the deployment of new technology devices, and the utilization of creative customer outreach platforms. Additionally, executive utility leadership must remain committed to this holistic vision, knowing that they will likely encounter years of internal and external inertia and resistance.
This article was originally published by the author on LinkedIn and was republished with permission.