When “innovation” (e.g., R&D, innovation teams, or digital transformation groups) is not tied to a core business need, it can feel like a “shiny object” syndrome. However, when innovation is tied to the core with participation from those involved in the operational side of the business, it can drive significant OPEX improvements. It can drive growth through the right capital projects, and it can lead to higher levels of customer satisfaction and growth.
These days, when entire utilities are being asked to do more with less, there is no room for shiny objects without real operational needs and value. However, getting buy-in from the parts of the business that need more innovation can be challenging.
Does innovation at your utility feel like this:
But don’t worry, this story has a happy ending because the organization realized the morale of the story:
- Innovation cannot produce value if it is untethered from the business's operational needs
- The operational side of the business could use the innovation function to solve more of their real-time operational needs.
These two sides of the business were able to align interests by recognizing:
When all sides of the business come together in the innovation process, the art of possible can become realized. This article series will go deeper into the “how” so that innovation can align within the functions of the business to offer the most value.
Innovation is as much a “Business Process” as it is an “Art”
Brainstorming and “hack-a-thons” are great for coming up with ideas. But, on their own, they are not enough because they haven’t produced any value. The most common definition of innovation is:
Innovation is anything new or useful that creates value for your organization or customers.
We see most innovation fail to take root when the business doesn’t know what to do with ideas. But ideas can be realized as valuable until after a field trial or experiment.
That is why we advocate for everyone to put down their shiny objects and take a step back to interrogate the process. For those who have practiced Design Thinking, Agile or Lean methodologies, this process we advocate should feel really familiar.
Welcome to our Air Traffic Control System for innovation!
Step One: Flight Planning – Selling the Idea Back to the Organization with Creative Abrasion
This is the most difficult part of the innovation process. While ideas enter the process in a staging area (we call it “the Hangar”), the business determines value and strategic fit.
- Allow anyone to enter an idea. The ideas can come internally from employees or vendors selling to an employee who thinks the solution being pitched is valuable.
- Get early reviews and approvals. In our process, the appointed “Air Traffic Control Manager” (often a head of innovation or R&D) reviews the idea for merit and if approved, funnels to the correct Subject Matter Expert (SME) in the operational part of the business who can determine what (if anything) to do with the idea.
- Involve SMEs from operations early. In our model, operational SME owners are called “Airport Managers.” We encourage utilities to create “airports” that align with their strategic operational objectives, such as decarbonization, wildfire mitigation, transportation electrification, etc. That way, the real business owners (operationally focused and often with budget) can immediately determine if an idea is something they want to fund.
- Appoint an operational SME owner to drive the pilot. In our model, we call the pilot lead a “Captain” and they are responsible for owning and creating a flight plan for the idea. We encourage utilities to choose Captains who are SMEs on their team very close to the problem needing being solved. Often these Captains are not officially in the innovation or R&D team but come somewhere else in the business.
- You must sell it. Innovation is a sales job. In our model, we walk the Captain through the questions they would need to answer to create a “Convincing Argument” to pitch the idea back to the business for scoring and prioritization. With a proven, standardized approach, its fast and easy to create a good pitch.
- Scoring ideas. In our model, all ideas are pitched with a convincing argument and scored by a panel of SME peers that come from many areas of the business that the new technology would touch – including operations. Everyone will give it a fair score, and the team can see where it ranks compared to other ideas in the pipeline.
- Creative abrasion. In our model, we encourage utilities to lean into what our co-founder Dr. Linda Hill calls Creative Abrasion (short video) which she found exists within the most successful teams from a study of over 150 organizations and captured in her book Collective Genius (watch her TedTalk here). With “Creative Abrasion” your team will develop the capability of vigorously debating ideas and their alternatives from a marketplace of ideas. This leads to heated but healthy debates and lively discourse where there is an organic diversity of thought because people from different parts of the business are invited to share their opinions. By practicing this in the innovation process, people get comfortable with conflict and debate so that only the best ideas advance.
For many utilities, this first step that manages ideation is the hardest and if you aren't involving your operational SMEs, you are probably finding that innovation gets rejected once it hits the field. We have found that utilities with Creative Abrasion are comfortable “killing” ideas early and fighting for the best ideas to advance to the field are also faster. They make decisions up to 85% faster and have faster overall pilot processes – which we will dive further into in part 2 of this series!
Curious to learn more? Join our webcast: Energy Central’s Power Session on “De-Risking Innovation” on May 21, at 2pm eastern. Dr. Linda Hill, author of Collective Genius: The art and practice of leading innovation will be there to dive in more to Creative Abrasion with an all-star panel from Liberty, National Grid, PGE, PG&E, and Southern!