Making the most of new technology, and incorporating innovation into business-as-usual, means getting buy-in from everyone in the organisation.
How does a company create an innovation culture? How does it ensure that everyone from the chief executive down to junior employees know what the organisation is trying to achieve and feel empowered to make changes within their sphere of influence in a way that contributes to this?
These were some of the questions mulled by attendees at the Utility Week-Wipro Technology and Innovation Council’s annual dinner, which took place in London earlier this month.
The agenda for the evening set out to gather feedback on an industry research proposal, designed to improve understanding of current thinking about how innovation and the strategic application of transformative technologies should best be supported in UK utilities – and how this ideal compares to reality.
The discussion prompted some insightful observations and has helped to shape a research question set which will shortly be taken out to the wider utilities market. It also sparked an enthusiastic bout of experience-sharing however, highlighting some of the ongoing challenges companies are grappling with as they seek to transform for an age of digitally enabled business processes and customer engagement.
Lessons learned
First and foremost, multiple attendees shared observations and experiences which pointed to misaligned perceptions of innovation in many organisations.
In short, innovation can mean different things to different people, and different constituencies in an organisation. For example IT, operations and engineering – can have very different ideas about what an effective innovation process with a successful outcome should look like. They can also have diverging views on the kinds of benefits technology investment should bring.
Creating a common understanding of innovation, which unites organisational efforts to deliver both incremental and disruptive changes which drive in the same direction is therefore critical. And in part, one council member observed, this requires an appreciation that innovation is catalysed by different factors at different levels in any organisation.
For example, while board-level keenness for innovation is commonly triggered by threats to survival, like competitive pressure or the need to retain and satisfy shareholder support, elsewhere catalysts tend to be more specific to an operational microcosm and are understood as time sensitive targets for cost reduction and efficiency gains. If these catalysts are not aligned, then innovation effort will not deliver the outcomes businesses ultimately desire.
There’s a great deal about effective innovation strategy and culture building that utilities can learn from other sectors and dinner guests were not reluctant to share their thoughts on the best places to look for inspiration.
When it comes to customer satisfaction and engagement, the success of multinational e-commerce leaders like amazon and technology innovators like Apple were most commonly referenced and admired for their success in mastering the distinction between conventional customer service approaches, and a fanatical dedication to enhancing customer experience.
But it’s not only from global giants that utilities can learn. Many guests favoured a focus on smaller companies as a source of inspiration in their quest for sustainable innovation cultures.
Not for the first time, it was observed that smaller, younger companies have advantages in agility and are free of the entrenched attitudes and legacy infrastructures that can hold established organisations back. Cadent’s chief technology officer James Houlton said his team has very consciously sought to emulate a “start-up mentality” as it considers how the gas distribution company – so recently spun out of National Grid – will tackle delivery of a technology strategy which truly drives better business outcomes, for customers and for its new consortium of investors.
Inevitably, the interplay between regulatory frameworks and the scope for utilities innovation also formed a key element of discussion over dinner. Energy network leaders widely lauded the benefits that regulatory funding has brought in terms of justifying the expenditure of time and resources on projects which would not otherwise be supported. But it’s not just regulatory funding of innovation that has delivered a surge in creative thinking and technology experimentation in recent years. One delegate said the shift to totex accounting under RIIO has done more to achieve innovation in business as usual than funding scheme have or will.
Further insights and observations on the best approaches to successful innovation were too many and varied to list in these pages. But with the council’s research project due to launch later this month, the opportunity to gain even wider engagement from industry leaders on these important issues looms large.
Key takeaways
- Collaboration will drive innovation. Work with other companies inside and outside the utilities sector and share knowledge wherever possible.
- Create an innovation culture by ensuring all employees are aware of and are on board with what you’re trying to achieve.
- Focus on a few key innovations as priorities, don’t focus on too many at once.
- Collecting data is all very well, but it is important to invest in technologies that can be used to make sense of this data, so it is usable.
- Smaller companies may find it harder to raise the capital to invest in large innovation projects, but their size generally makes them more agile when it comes to testing new ways of doing things.
Views from the table
Jeremy Heath, innovation manager, SES Water
“The Internet of Things can bring information back from the networks, but it is artificial intelligence which will help us make sense of all that data.”
William Hewish, chief information officer, United Utilities
“Different constituencies within an organisation will have different ideas about what innovation should look like – IT, engineering and operations personnel tend to have very different views about what “good” innovation includes.”
Ian Cameron, head of innovation, UK Power Networks
“As networks change we’re going to require new skill sets. Innovation creates a great pool of resource that can split off into new operating models. At UK Power Networks we demonstrated this with the creation of the Smart Grid team from Innovation.”
James Houlton, chief technology officer, Cadent
“Innovation culture needs to be akin to health and safety culture in utilities. It’s fundamental. Yes, there’s someone in charge of it, but
it’s everyone’s responsibility.”
Nick Rutherford, 2020 vision IT investment programme director, Bristol Water
“Innovative and disruptive technologies are coming thick and fast. The 4th industrial revolution is converging many technology changes and we need to find ways of understanding their capabilities, how to use them and learn lessons from other more advanced industries and sectors.”
The Utility Week-Wipro Technology and Innovation Council is a forum for networking and ideas-sharing. It meets for face-to-face debates and workshops and approves the focus for bespoke research.
For 2018, the council’s research project will explore innovation and technology adoption strategies in UK utilities, with questions focusing on three themes:
- Innovation leadership and investment
- Innovation culture and process
- Technology strategy
An online survey to gather input for this research will launch this month.