January 25th, 2021
The Power Utilities industry has been rapidly evolving over the past several years. From exploding demand in emerging markets, to a reimagining of the grid in established markets, the whole world has been undergoing an energy transformation. And that was even before 2020. The disruption of COVID has only added more complexity, more uncertainty and more volatility. As the industry and the world continue to adapt to this new normal, the question becomes: What’s next?
I recently had the privilege of speaking with Ravi Mundhe, Digital Business Innovation & Strategy Alliances at Microsoft to help me explore this question. Ravi serves as a digital business executive, collaborating with Microsoft’s energy clients and partners to achieve their business outcomes. He has more than 25 years of extensive global, multi-cultural and hands-on experience in business model, strategy, execution and governance so I was looking forward to getting his perspective on the state of the industry.
We talked about the unique challenges of the power utilities industry and how organizations are dealing with the impacts of COVID.
What makes the power industry different from other industries?
That’s a great question. In my opinion, what is unique and what really fascinates me about the power industry is that its foundation is based on the journey of electrons. This electron flow originates from different sources during generation and then it continues through the transmission and the distribution circuits. In this process it engages with a whole slew of industries.
This electron flow touches financial trading, manufacturing, and automotive industries. It contributes to retail, government, healthcare and eventually reaches communities and individuals like you and me.
What I really find interesting is how this flow of electrons help us meet our individual as well as collective commitments, allowing us to get our work done. It enables us to make a positive difference in our world.
That in my opinion is something very unique about the power industry.
Joint Webinar: Supercharging Power Industry Projects in 2021
Does the fact that the power industry affects so many other industries present unique challenges?
The organizations in the power industry face a lot of challenges.
One is how to maintain the focus on customer experience that is so much needed. The power industry is very seriously focused on improving customer service and they are doing this by providing information and insights to customers – whether it be value added products and services, or giving them a heads up on precautions for an upcoming storm, or providing energy efficiency tips. Even outage Information, estimated recovery time and more are needed and expected. It is a challenge to provide this continuously connected digital experience across a wide range of customer types.
It’s very interesting to see how organizations are pivoting and are now providing customers with more than just electricity. The challenge now is how to remove all friction in the Customer Experience Journey and how to bring new products and services that makes the lives of their consumers easier, brighter and more secure. We are seeing power utilities working hard to get in front of this challenge.
The other challenge is the rise of renewable energy and electric vehicles, and this is a very positive challenge. Legacy assets are being decommissioned and there is a growing share of wind and solar initiatives. Additionally, we are in the middle of a rise of electric vehicles. All of this is helping us, and our planet with decarbonization goals.
So the challenge is, how do we plan these complex initiatives very quickly? How do we smartly and intentionally upgrade the distribution circuits at the right spots to handle the extra load of these electric vehicles? How do we handle the extra but intermittent supplies that are coming in from distributed renewable assets like solar rooftops and wind farms and still maintain a reliable grid?
What were some of the trends in the industry before the disruption of COVID?
There is a global energy transition that’s in progress and it is happening as we speak. There is a wave of decarbonization that’s currently underway.
The Paris accord helped with sustainability and carbon reduction goals for nations and corporations to become carbon net zero or neutral. And this, I think is also very positive change for the power industry because they are being seen as an enabler for global carbon reduction goals. They are leading the way.
So, it becomes pivotal for them to decommission some of the legacy assets and adopt new technology. Look at some of the new horizon renewable energy resources like the wind and solar, and also some of the smart nuclear reactors that the US government is investing in terms of R&D. These are examples of the Energy Transition especially the Transition to Clean and Reimagine Energy scenarios and capabilities that Microsoft is helping organizations in the power industry to plan and execute.
What has changed since COVID?
At a high level, the energy industry has seen massive upheaval in the last year – a COVID-induced oil price collapse with uncertain demand outlook, and a dramatic shift away from coal to gas towards renewables in the utilities space.
But I think we can all agree that COVID 19 and the global pandemic actually accelerated the whole energy transition. And if there were any questions before, it’s very clear now that it’s real and it’s very much underway. It just accelerated further.
I think this is almost like COVID acted as a Chief Transformation Officer in helping the power industry in accelerating some of these positive trends.
Did the uncertainty of energy demand make organizations more cautious with digital innovation? Did they view it as too risky?
Many companies in the power industry are already adept at working with unknowns and baking them into the planning equations. I think the biggest risk is not taking one.
What were some specific challenges that COVID caused in the power industry?
Let’s make no mistake about it. When the news of the virus started rolling out, there was definitely a reaction phase with massive disruption for all of society. In the power industry, you saw more projects initially being put on hold because of the uncertainty. Adjacent industries and factories were being shut down. This caused some supply chain disruptions.
Additionally, there was an impact in terms of the power consumption with the massive global work from home initiative that was much needed to keep everybody safe. It meant rapidly responding to different usage and consumption patterns on the grid. Kudos to the power industry for managing this humanely, smoothly and efficiently.
What about internally? How have power utilities organizations needed to adapt their processes?
Most Power utilities are already in midst of a digital revolution and, as mentioned earlier, COVID just accelerated the whole process. In my opinion, the digital revolution is front and center for many power and utility companies. I think the way to handle it successfully is that there needs to be a new level of thinking. It needs to start with a digital culture transformation.
I really believe that the road to the customer’s heart goes through the employee’s mind. Think about that. It means as the leader in a power and utilities organization, if you want your workforce to be able to service your customers, if you want make a positive experience for your customers and your clients; then you have to start by first empowering your workforce and your employees and make it a better place. They need to know that their talent is respected and that they have the right resources and knowledge bases and sales and service interaction capabilities. These capabilities empower the employees and they can now give the most to make your customers happy.
As Peter Drucker, the guru of management, mentioned — we live in a world where culture eats strategy for breakfast. So as a leader in a power industry organization, you could strategize to have better customer experiences and services, but first you need to first start with change at home, by leading a digital culture transformation. One that is empowering for your employees to be actively engaged in this journey with you.
I see power companies who are doing it and who have already been on this journey are being very agile and successful. They’re seeing the rewards of it. That should be a good reference for leaders in other organizations in the industry as they start planning their own digital culture transformation. Then follow that by deploying the right business and technology capabilities to make your digital transformation successful.
In your experience, what are successful organizations doing right now?
For the C-Suite clients in the power industry organizations that I partner, the following 3 levers are most successful not only in creating an empowering employee engagement but also an engaging customer experience.
- The first is the Digital Culture Transformation that I just mentioned. You can also check out this relevant post for more on this topic : Building Resilient Employee Experiences for Culture Transformation
- The second is developing their own Digital Feedback Loop for capturing the digital signals across their organization, synthesizing that data and using it for actionable insights that allow them to achieve their organization outcomes
- The third is the creating agile Horizon Roadmaps that allow you to work on all aspects of innovations simultaneously
What is in store for 2021?
I would say change – more changes and volatility. Make no mistake. I think we will all see a lot more of it. And I’m very hopeful, I’m very confident that the power industry is capable of handling these kind of changes. These changes are going to help make our planet a much more sustainable place, primarily through three vectors.
- First point is vaccines: once we have these vaccines, we will be able to take back control from the virus, and over a period of time, these supply & demand upheavals that I was referring to will smoothen out
- The second point is business innovations that will provide the crucial solutions that the industry was on track to delivering before the virus.
- And I think the third important point is that hopefully 2021 brings to us collaboration between nations, between communities and between people in getting us all back to our goal of making our planet a much better and sustainable place to be.
I hope these actionable insights helps organizations in the power industry to plan their digital ambitions and achieve their business outcomes. Please feel free to contact me on LinkedIn if you have any questions. Stay safe, stay well.
Ravi Mundhe serves as Digital Business Executive to collaborate with Microsoft’s Energy partners to design and execute Digital Business Innovation & Strategic Alliances. As an experienced in-Residence Digital Business Officer, Ravi collaborates with his clients and partners to help them achieve business outcomes. Ravi has 25+ years of extensive multi-industry, global, multi-cultural, and hands-on Business Model Strategy, Execution & Governance experience.