In the session, moderated by Jim Smelley, CEO and Co-founder of Thought Ensemble & Board Member of CG Infinity, the panel members John Burke, Former CTO/Co-founder of Ambit Energy, Chaitu Parikh, President & Head of Retail Energy at David Energy, and Victor Howard, Chief Marketing Officer at Shell Energy Solutions/MP2 Energy explore how critical lessons learned can be deployed to develop the modern, customer-centric energy companies of the future.
The panelists are first asked to tell the audience about a technology disruption from the last 20 years that they found interesting. First up is Chaitu from David Energy, he describes how there are still a lot of similarities between the challenges we’re facing today and the challenges we were facing then. We’re still adding customers through direct mail, telemarketing and other marketing channels that have stayed the same, we’re still facing customer churn and so forth. I think going forward things need to be slightly different. What is really interesting is that we have all this amazing technology of IoT, connecting devices to each other and we now have a complete explosion of devices that are all going to be there to help control load, manage, load and create more value for customers in the future. Victor from Shell Energy Solutions and MP2 describes how the industry has lagged behind in bringing the technology to the consumer and gives an example of two disruptive technologies he personally likes in his home – a geothermal AC system and smart thermostats that are controlled through an app. Communication tends to drive technology and as we look forward technological disruptions are going to particularly be around that communication. John of Ambit Energy describes how the biggest technology disruption the last two decades were the smart meters. The cloud and the speed at which you can move and make things happen is really a hidden innovation.
When asked about what technologies he has seen along the way that has made organizations more efficient, Chaitu compares back in the days, where virtually everything was being done manually to now where you are able to do everything with only a handful of people because of a software tool that allows you to automate a lot of things.
Jim then mentions that one of the difficulties in the technology space is making financial cases for investment upfront. A lot of times the investment can be pretty significant and he asks the panel members to talk about the successes they’ve seen on the finance side. They start by saying that if you have to build a business case in the innovation space, you will never ever get to innovation. The greatest success they have seen is in connecting your development teams and your business teams. What happens is your IT people become very savvy in the business and the business people become very savvy on the technology. That collaboration then starts to build on each other and you end up with a significantly better product.
“Ultimately being in a deregulated market does drive innovation, because you’re trying to solve a problem” was Chaitu’s answer when asked if location matters to running a good retail energy, innovative company. When you’re in a regulated market, you don’t necessarily see those problems. Innovation in the deregulated markets will ultimately feed deregulation on the regulated markets in his opinion. Victor didn’t think location mattered but the main challenge was that sometimes energy companies put themselves into a box and give themselves unnecessary boundaries to innovation. Energy is a big space. Just because something is your primary core business, it does not mean that that’s all you have to do. John gives an example of when Ambit Energy launched in a new state which got their original market more excited and brought them more customers in the original market as a result.
Next, Jim asked what the panelists find necessary to keep an innovative team and innovative culture going. The first mention was to make gathering information from customers, to find gaps, a part of everyone’s daily job. For example, the operations team shouldn’t only be focussed on operations. They should be spending 20% of the time actually running the business and 80% of the time figuring out what they’re going to do next and how to improve the processes. If people are only thinking about moving data from point A to point B, they will never get to innovation. Next, they mentioned that you have to continuously prioritize and focus on what it is that’s important. What is also important is giving the team the freedom to work wherever they want.
The panelists were then asked what the most interesting profitable areas are in innovation. Chaitu mentioned that more innovation is needed in branding and when you think about retail energy companies it’s really hard to find a retail energy company that stands out as having a strong brand. Having a strong brand is really what’s going to help propel valuations beyond what we typically see in the retail energy space, which is fairly low. Victor mentioned that if you look throughout all of history, innovation is really driven by advances in some form of communication. Today you got all these different ways people are communicating via their mobile device, with each other, with data etc. The evolution of what we’re going to look at is going to be something in how all that communication comes together for somebody to better manage their home, or better manage their business, or find a different way to participate in the market, or whatever it might be.
They end the discussion on a question from the audience on the lifecycle of technologies. Do they last two or four years? And what do you do to get yourself ready for those replacements? John says that everything seems to die in two years and the best you can do is make sure that nothing is key man dependent, because you want to go change it later on and that can become prohibitive if you don’t limit key man dependencies. Victor says that you’ve got to always be testing back. So I’ve got a sunk cost and something I’d developed and if I can get a 20% improvement, then it was worth the cost of making that improvement.
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