Innovation is Sexy, but it can Lead you Astray, too

Something attractive but potentially hazardous is going on in the world of the technological revolution.

Sure, the eyes of CEOs, CTOs and CIOs everywhere are riveted by this voluptuous pace of change, going digitally ga-ga about the potential of artificial intelligence, process automation and predictive analytics. The Internet of Things, meanwhile, gives them that come-hither look that promises connected commercial bliss everywhere, all the time.

Slow down lovers. OK, on second thought you can’t slow down because you’ll get crushed by other suitors in the rush of innovation. This is complicated.

Exactly, agreed a panel of global smart-grid leaders during the “Checkpoint Panel” at the finale of Accenture’s annual International Utilities and Energy Conference (IUEC) held May 3-4 in Miami. You’ve got to keep up with the exponential flowering of digital beauty, but don’t get suckered in by simply a pretty face.

“Innovation is an executive’s pornography,” Will Morris, chief retail officer for British power giant SSE, said in a quip that nearly brought down the house in the Marriott Marquis ballroom.

Morris caused a lot of knowing laughter and some blushing, but his point was well taken by the crowd. Company leaders, trying hard not to get behind the digital promises out there, are in danger of getting lured into R&D back alleys and dead ends if they are not careful to balance innovation with the cultural and cost-benefit limits of their entities.

“We have to be prudent in getting the bounds right,” he added.

The Checkpoint Panel was full of thought leaders who laughed with everyone else at Morris’ line but also nodded knowingly at the primary challenges facing the utility industry when it comes to the next frontier of technology. Some utilities and partners like Accenture are jumping into new innovations such as artificial intelligence (AI) and augmented reality to develop both customer engagement and field training products– and yet they are crawling in other new terrain.

Jean-Marc Ollagnier, group CEO of resources for Accenture, is fully aware of potential for the estimated $1.3 trillion in forecasted value from connected technologies. No thoughtful leader ignores that, and Accenture builds on its development with a combination of big-budget R&D internally and acquisition of outside companies on the cutting edge.

“We’re balancing what we can do with our own capabilities with what the market can bring us,” Ollagnier said in Miami. “Speed to market is really the name of the game.”

Earlier in the IUEC conference, Ben Holfeld, technology deliver architect at Accenture, showed off some of the mind-blowing “toys” that help the company innovate for itself and partners. Attendees watched a live video link to the innovation center in France, where an employee demonstrated a virtual reality training session that can teach field workers how to deal with expensive, dangerous machinery equipment, among other things.

Every company represented in the Checkpoint Panel indicated some high level of R&D effort. Mike Koehler, chief information and digital officer for utility holding giant Exelon Corp., said his company’s journey into AI experimentation is exciting while it’s starting at a crawl with process automation.

Using augmented reality with AI can help field workers be equipped and enabled at hugely complex tasks. Predictive analytics can help with storm forecasting and maintenance schedules. And there are companies rolling out chatbot pilot products in customer-facing channels.

Innovation is attractive, of course, but meaningless if the human connection is damaged.

“If you chase the shiny new object it may hurt your engagement with customers,” Koehler noted.

Austin Bryan, chief innovation officer at CLP Holdings, agreed.

 “You could get lost by doing too many things,” he said.

Accenture’s Ollagnier sees great potential for long-term relationships in three transformative digital arenas: 1) the asset operations model through IoT, predictives, etc.; 2) grid optimization with lots of startups focused on energy aggregation and control balancing technologies; and 3) customer engagement.

“It means today we have evidence around these three things” with hundreds of cases giving evidence to the potential market impact, he said. If companies “work hard on these things we can truly unlock a tremendous amount of value.”

Thirteen digits worth of dollar value, according to the industry’s alluring forecast. The historical and exponential growth of processing capacity (Moore’s Law, anyone?) and equally exponential decrease in costs make this look more and more like a solid, long-term relationship than a fleeting fling.

Trial dating, in the form of R&D, is crucial.

“You need strong case studies to see the value of specific tools,” said Miguel Stilwell d’Andrade, an executive board member for French-based global energy player EDF. “Once you get that, you start moving to things like artificial intelligence.”

An earlier session at IUEC warned that innovation is best tested out at the edge of companies, lest the firms’ “immunity” resistance to transformative change kill it before it scales up. Many companies like Accenture and GE have encouraged startup-like efforts at the edge of their corporate body.

This will be both brutal and wonderful for the workplace. Less trained workers will not be needed, but a world of opportunity arises for data scientists and other skills that should be taught in schools now.

Several leaders echoed that edgy way of courting innovation and hiring talent, but even Bryan, who earlier urged caution, said you can take the tender approach too far.

“You can’t allow immunity resistance to remain and be resistant,” he warned. “You do it in a courteous way but be fierce about that.”

 

 

 

 

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The Clarion Energy Content Team is made up of editors from various publications, including POWERGRID International, Power Engineering, Renewable Energy World, Hydro Review, Smart Energy International, and Power Engineering International. Contact the content lead for this publication at Jennifer.Runyon@ClarionEvents.com.

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