Utilities are not generally thought of as natural innovators. Typically large, low risk companies, they have many of the hallmarks of old-fashioned business, including rigid hierarchies in decision making.
According to a group of senior utilities employees, however, this is changing.
In a regular barometer of industry innovation confidence, Utility Week asked a pan-utility group of 15 technology and innovation leaders a range of questions to try and gauge the strategic importance being placed on innovation in the sector and to understand how companies are adjusting to reflect this.
Nine of the group said that their organisation now has a clear innovation strategy to guide its activities and experiments. Furthermore, it seems that boardroom backing for innovation is translating into financial support, with nine barometer participants saying they are happy with the level of investment being made in innovation.
Confidence in the maturity of innovation culture in utilities was also found to be relatively high. On average, the group rated innovation culture with 3.5 out of a possible 5. Two contributors, both from energy networks, gave their organisations full marks for maturity in innovation culture.
In terms of the technologies which the group felt will enable most innovation in the sector over the next five years, the Internet of Things and artificial intelligence were favourites, followed by robotics and augmented or virtual reality.
These indications of confidence and enthusiasm for change from leaders who are close to organisational transformation agendas should reassure sector stakeholders who will be uncomfortably aware of the pressure bearing down on utilities to adapt their operations, processes, and infrastructure by adopting to technologies and smarter ways of working.
However, responses to other questions show that the sector still has some way to go before it can cast off its stereotype of stagnant traditionalism.
Despite the high rating on innovation culture, most of the group also expressed doubts about the effectiveness of internal schemes designed to incentivise innovation. Likewise, they had reservations about the usefulness of innovation success metrics.
Furthermore, as utilities move forward into a critical time of transformation – as a result of deregulation, social and political pressure and technological advance – the future of innovation is uncertain. Ten of the group said they were concerned or “extremely” concerned about the availability of staff with appropriate innovation skills who can build on the foundations of early projects and investigations.
Tackling these remaining weaknesses is important, especially in an environment of increasing customer expectation and political scrutiny. Collaboration and best practice sharing could help to overcome innovation barriers and deliver the final elements of innovation maturity the sector sorely needs.