Leading Change: Learning from the Laggards

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?


Head ShotJeff 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: jeff@jeffsuderman.com

References

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

Which Energy Company is Masquerading as an Automaker?

“Tesla isn’t a car company; it’s a battery company” (Montenegro).

Last summer I blogged about Tesla’s ground-breaking decision to make all their Tesla automobile patents public domain (see Open Source Life). Tesla stated that open source patents were a means to accelerate the electric car movement and limit harmful emissions. While this may be true, many believed this was part of a bigger plan to accelerate the public need for portable/modular batteries.

At that time Tesla was shopping for a State in which to build their battery factory. That deal is now sealed and Tesla has begun construction of a $5 billion facility in Nevada. This factory will be used to develop modular batteries which can store large amounts of energy for personal or business use. Last week Tesla announced the launch of their Powerwall scalable battery. With this announcement, Tesla is showing us that their core business is portable energy, not automobiles.

As we review this fascinating case study, here are three lessons we can learn from.

  1. Form vs. function. An organizational adage reminds us to not confuse form with function. Form, how a company runs and operates, should always serve its function, why the company exists. At their heart, Tesla wants to enhance environmental sustainability. It began with electric automobiles and has now extended to our homes and businesses. Tesla’s move from automobiles to batteries is a great example of how function should drive form.
  2. Claiming our preferred future. A foundational premise of my work in strategic foresight is that we each have the ability to shape our future. However, this is not a passive process. We must both identify the future change we desire and then take the risk to change.  Musk teaches us a lot about what the vision of innovators and disruptors can do when we are willing to change our model (in this case, a reliance on fossil-fuels). He and his leadership cadre may become the ‘Renaissance Men/Women’ of our time due to their vision and risk-taking abilities.
  3. Disruptive technology. This term is bandied about regularly. But in the next decade you will watch a textbook example of how modularized power is going to disrupt the power industry. I believe that many electricity monopolies are taking their last breaths. As Powerwall gains acceptance, neighborhoods will begin assembling microgrids of shared power (think of Uber or AirBnB concepts used for sharing excess power). Citizens will break the monopolistic power of electricity companies when they begin to purchase cheaper power during non-peak hours, store it, and resell it at a higher cost (think of it as the new form of ‘currency’ trading). In time, modular power will highlight the sweeping effects of disruptive technology.

It’s time to start saving for a $3,500 Powerwall! I don’t know how to do it, but it is definitely my preferred future!


 

Jeff Head Shot 3.jpgJeff Suderman is a futurist, professor and consultant who works in the field of organizational development. He works with clients to improve leadership, teamwork, organizational alignment, strategy and organizational Future-Readiness. He resides in Palm Desert, California. Twitter: @jlsuderman

References

Robert Monenegro. Tesla’s worst kept secret has become Power Companie’s Nightmare.

 

 

 

Fast Forward: Five Forecasts for ’15

Now that the New Year is well underway, I decided it was time to use my futurist skills and make some forecasts about things that I think will become prominent in the year ahead. So here it is, my inagural Five Forecasts for 2015!

  1. The ‘internet of things’ takes off: Eventually, the nebulous concept of ‘cloud-computing’ has made sense to those who use technology (which means almost everyone!). In a similar way, expect the concept of ‘the internet of things’ to creep into our vernacular in the year ahead. In simple terms, this idea refers to what occurs when we start linking our stuff to technology. Digital camera’s did not used to be connected to our digital world but now wifi enabled cameras are a part of the internet. Exercise used to be technology free but now we wear devices which uploads our fitness activities. Soon we will have clothing with digital sensors which will connect us to the internet. Even our thermostats are now part of the digital grid (think NEST). The internet of things is what cloud computing was five years ago and it will turn most of our non-digital world into something connected to the internet.
  2. Oil takes a back seat: As solar power becomes more affordable and people are learning how to create their own power microgrids, petroleum-based fuels will continue to decline in global importance. We will be oil dependent for several more years, but the role of oil and gas is shifting. It used to be the bus driver but is becoming just another passenger on the bus.
  3. US foreign policy shifts: With the rise of ISIS, the lingering aftermath of Bin Laden and the Middle-Eastern fall-out from the Arab Spring, I believe we will begin to see subtle indicators that the United States will shift its position as ‘the worlds police’. While readers of this forecast will have a diversity of personal viewpoints on this matter, this is a statement without prejudice. The rules and norms of global security have shifted and as a result, I expect methods and policy will as well.
  4. The rise of the shrinking middle class: The gap between rich and poor (measured by something called the GINI index) has historical links to stability/peace (a low GINI score or income gap) and instability/unrest (a high GINI score or income gap). Between 2009 and 2012 the top one percent of Americans enjoyed 95 percent of all income gains. This does not bode well for the middle class in America and we will begin to see more signs of unrest and this gap increases.
  5. Ethics enters the mainstream: As we begin to acknowledge the interconnectedness of our world we are going to take more responsibility for the effects of our actions. Consumers are already expecting that their brands behave ethically or give back to  the world. The example of the CVS drugstore chain (which stopped selling cigarette products because it did not support their brand promise of health) is an excellent example of the realignment of business and values.

As a bonus forecast, expect to hear more discussion about the post-capitalist era. Our literature and media is increasingly admitting that the economic capitalism is a broken model that is beyond repair (for example, review #5 above!). The collective culture will take some time to get used to this massive ideological shift (at least in North America). However, as this happens, watch for experts to begin proposing alternate concepts such as the sharing economy, economic democracy or economic sustainability.Granola Bar

And finally, I have one long-shot wish for 2015. I wish that food companies would begin adding the products % of daily sugar intake on food labels. Current law only requires them to list how many grams of sugar are in a product. As we shifted from away from high fat (a good thing), we simply replaced our problem with a new one – sugar intake. Low fat tastes bland so sugar has filled the void. Adding the daily recommended intake of sugar would be a big step in helping consumers realize this problem. When labels show that one granola bar contains 40% of our daily recommended sugar intake, attitudes and behaviors will begin to change!

Whatever occurs in the year ahead, I wish all of you a safe and joy-filled 2015!


 

Jeff SuHead Shotderman is a futurist, professor and consultant who works in the field of organizational development. He works with clients to improve leadership, teamwork, organizational alignment, strategy and organizational FutureReadiness. He resides in Palm Desert, California. Twitter: @jlsuderman