The Kodak story reminds us that ongoing organizational success is earned and cannot be assumed. Once heralded as the global leaders in photography, their inability to foresee changes brought about by digital technology left them behind. In fact, they were so far entrenched in the old ways of doing things, that they even patented a method to turn digital photos into old-school negatives! As a result, their slow response to change forced them into bankruptcy in 2012.
We have heard many idioms about change;
Change is hard | Change is good | Don’t fight change | You need a change of scenery | Times change
The only thing that doesn’t change is change itself
However, no matter how much we know about change, it still seems to sneak up on us and bite us in the proverbial butt. This is currently occurring in the energy industry where our quest for renewable energy sources is leaving many traditional energy companies behind. These companies may not know it, but they are beginning to act in ways that reveal they are not prepared for this change.
In recent years, many Las Vegas hotels have invested heavily in solar power. This has allowed them to become energy self-reliant. However, the local utility company has been devastated by the loss of several major casino customers. As a result, the utility is requesting multi-million dollar exit fees from the casinos (McDonald). “It’s a strange case where new technology — designed to save money — ends up costing more because of the loss to the old technology it replaces” (McDonald).
Similarly, this past January, California utility regulators narrowly passed new rules that will increase costs for owners of rooftop solar systems for the same reasons (Penn). People who have installed solar are now paying an extra $10-$15 fee per month to cover the costs required to maintain their utility company’s non-solar transmission structure. Penn notes that “some states such as Nevada have rolled back rooftop solar benefits to a point that the solar industry intends to close operations in those locations”.
This is a complex issue with many pros and cons which I cannot adequately cover in this blog. However, these energy examples all point to the challenges of change. McDonald summarizes it well;
“When the automobile came along, horse farms, blacksmiths and saddle makers were eventually replaced by garages, gas jockeys and mechanics. The printing press replaced hand printing, automation changed the way assembly plants operated. The list is long.
In every case, one profession — and along with it, many jobs — was lost. But at the same time, a new trade came along, demanding a new set of skills — such as robotics technicians or computer programmers — that kept people employed. In addition, many new industries that didn’t even exist before spun off from the new technology”.
The traditional energy industry is in the midst of one of these changes. The emergence of solar energy and personal energy grids (microgrids) are revealing an energy structure that has not kept up with changes in the energy industry. In fact, it makes me wonder why our energy companies have not been at the forefront of embracing and leading this innovative change.
As organizations (and individuals), the ability to foresee and adapt to change has become an issue of paramount importance in the information age. This is why I focus a lot of my work on both the art of leading change as well as the ability to anticipate it (strategic foresight). While it is easy to point our fingers at examples like the energy industry, our own organizations are no less vulnerable! So what are you doing to ensure that you don’t become the next Kodak?
Jeff Suderman is a futurist, professor, consultant and pracademic who works in the field of organizational development. He works with clients to improve leadership, teamwork, organizational alignment, strategy and organizational Future-Readiness (and he loves great customer service!). He resides in Palm Desert, California. Twitter: @jlsuderman. Email: firstname.lastname@example.org
McDonald, Bob (Mar. 11, 2016). Cashing in the energy chips in Las Vegas. CBC News online.
Penn, Ivan (Jan. 28, 2016). California solar owners face new fees, utilities say costs should be higher. LA Times online.
Photo Credits: http://www.aecom.com