Learning from Evolution to Drive Utility Innovation

03/09/16

It came out late last year that a team of scientists discovered the burial ground of a new, never before seen human-like species, Homo naledi, deep in a South African cave. Deemed members of the genus Homo, to which we ourselves belong, the discovery opens up another, more ancient chapter in our species’ history. Scientists have cautioned against applying the term “missing link”, suggesting instead that Homo naledi was one of several human-like species living in parallel with Homo sapiens, as if nature were experimenting with several humanoid versions to see which one would evolve to fit this world the best. For a time Homo naledi fit this world, and then something changed and it didn’t.

No matter your beliefs about the process of human evolution, it’s clear that our species’ survival required experimentation and innovation in the face of unpredictable threats. Our continued existence offers a lesson for many of Milepost’s clients in the risk-averse energy generation, transmission and distribution industries. Like the endless hunt for sustenance, shelter and safety faced by our ancestors, they are challenged with multiple sources of disruption in today’s economy, including resource limitations, regulation, consumer sentiment, environmental pressures, pricing and new competitors. There will be players in the energy industry who hold on to the way they have always lived in this economy because it’s what has worked so far; the utility business model of today fits the world as we have known it.

Yet, the world has changed, and as conditions continue to change some will innovate broadly with their products and services, accepting the risk of failure in the hopes that they will find a new and better fit for what will certainly be a different world – after all, change is the ultimate constant. Companies that plan and forecast based on past performance alone are merely projecting the actual past into the unknown future. Those who innovate broadly, embracing a diversity of ideas and risk, will likely follow Homo sapiens and flourish in the world we have now, and in the future. However, developing a culture of innovation within a large bureaucracy in a risk-averse industry doesn’t happen overnight. The longer your business has been, well, in business, the more difficult it is to intentionally shift culture. At its core, this change requires a company to focus on two fundamental objectives: a new style of leadership that enables employees to experiment; and building a culture of trust and healthy communication.

A culture of innovation requires leadership based in values rather than strictly business outcomes and process. In a dynamic, shifting context, a leader must guide a company through uncertainty. Values-based leadership requires courage to first admit, “I don’t know what’s going to happen,” and confidence to demonstrate trust, “but I’m willing to go on this journey with you all to find out.” The leader committed to developing a culture of innovation will make room for frequent prototyping of new ideas, celebrate failures as opportunities to learn, and tap into employees’ inspiration and expertise to source forward-thinking, rather than reactive, ideas. The good news: Every leader in the world can learn this values-based approach. If you are a leader resistant to this, consider that your business needs you to learn in order to survive.

The next step toward innovation requires company-wide trust, built through honest communication. For established businesses, with processes, procedures and unspoken corporate norms, the shift to a dynamic, experimental culture is the hardest thing they will ever do. This journey begins with a deep and honest look inwards, beginning with everyone asking themselves, “What has been my role in maintaining the status quo?” Chances are everyone can assign blame for stagnation or lack of innovation in your company. At the same time, everyone, deep down, knows they played a part, even if it was by withholding their voice. The work of change and shifting to an innovative culture gets very real here. Enticing a spirit of innovation within your team, department, or company can only be based in honest conversations about what has worked, and what won’t work anymore; what systems or structures stifle innovation and what can be tweaked to unleash creativity; and how uncomfortable you are willing to get when, inevitably, the process falters and the safety of “the old way” calls. Here’s more good news: Open communication and trust are regenerative – the more they are practiced, the healthier a company’s culture becomes, and the more people communicate and innovate. Again, these ways of communicating can be learned.

A case in point is a recent project with a power utility to implement a new strategic plan across the agency. During initial meetings with employees across grades, it became apparent that a culture of distrust based in poor communications threatened to undermine the good intentions of senior management in rolling out the strategic plan. Moving directly to implementation of the plan would have resulted in continued distrust, sub-optimized results, and at best, maintenance of the same cultural issues that were already in place. What was needed was to step back, focus on healthy dialogue, begin to build trust, and only then engage around the strategic plan. Management had the wisdom and courage to un-learn the old ways, and the staff responded to this effort with full support.

Businesses can take a cue from Mother Nature to know there isn’t one magical model that will inherit the earth, or their industry.  There is only constant evolution, continuous adaptation. As in nature, the species and companies that thrive are adaptable. And evolution, whether of species or companies, is never linear and pretty. It requires experimentation, failure and discomfort. Companies that hold tight to their current framework and business model, to what has worked in the past, as opposed to what might work in the future, will follow the path of Homo naledi and fade away. Those willing to face down the pain, risks and excitement of evolution to build an adaptable corporate culture will lead long after their competitors have begun to decay.

John Silkey
John Silkey

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