Welcome to the latest Accenture RetailBusiness Services podcast in the UtilitiesPodcast Series. Today we’re covering aninterview with Gerd Leonhard, futuristand CEO of The Futures Agency, and GregGuthridge, global managing directorof the Accenture Retail Business Servicesfor Utilities. Gerd and Greg, welcome.We’re looking forward to hearingyour discussion today, and I’ll hand overto Greg, to introduce our first topic.
Thank you very much and thank youeverybody for joining our podcast today.We’re very excited to share with youthree interesting concepts that havebeen featured in our international utilityconference here in San Francisco,and leading up to the launch of ourNew Energy Consumer research and pointof view which will be a full andcomprehensive overview of our entirenew energy consumer thinking aroundthe utilities space. I’m really excitedto have Gerd here today. Gerd has beencollaborating with us around some of the,concepts and today we want to talkabout three very interesting trends thatare affecting consumers in the energyspace and, frankly, might have somerelevance to utilities and energy providers.So Gerd the first thing that I’m hopingthat you can discuss is this concept of the networked customer. And the‘likeonomics’ as you like to describe it,in terms of the shift in customers frombeing individuals to more networked.Can you give us a bit of a sense of what you mean by that and what theimplications are for a utility?
First of all thanks for having me here,really great to be here. I have thisconcept of the networked society whatthat means is basically now that we’reessentially always on, our mobile devicesusing tablets for news and video and soon, we are becoming quite a differentcup of tea in terms of being a customer.We’re used to being able to rate people,to rate organizations, to commenton what they do, to tweet about whatdoesn’t work. And what does work.So consumer empowerment is huge.What that means is that, first all the stuff happens in the consumer space, on seeFacebook and so on.But now it’s happening B2B as well.So that people are forced to be moretransparent. We’re forced to fix thingsquicker. We’re forced to react faster,you know this kind of idea of newness.And then this book by Rohit Bhargavathat’s coming out very soon called“Likeonomics”, points out that youessentially don’t do business with peopleor companies that you don’t like anymore.This is a global phenomena. Whatthat means, as a utilitarian provider, youhave to go beyond, beyond the meter,beyond the power, beyond just having,you know making it work.
So Gerd, clearly this has a majorimplication for utilities. If we look atsome of the other industries like bankingand financial services and travel,the concept of the networked customerhas been around for a long time and,if I understand what you’re saying, thebest energy providers in the futureare going to be the ones that embracesocial media and networking andinterdependence, head on, and start tointeract with their customers ina completely different model. Is thatcorrect?
Yeah in a way you could say the wordsocial media is a bad word because in theend what we’re talking about is a socialoperating system or the whole way of how you do business is changing and theway that we collaborate and actuallyhow we work and study and how we payand how we vote and all these things.So this is not about social media orFacebook or twitter these are just thetop level things. It goes much deeperthan that for example being an openorganization requires the internalorganization to be open to conversation,and to be open to criticism and changehow they work together internally,before they go to the outside and talkto them on the outside.So it has implications across the board.It also impacts the business model, whichmeans that it’s not going to be aboutselling energy per say, I mean that is anassumption, of course that’s a given thatyou’re going to sell energy, but what elseare you going to do? What else do youoffer? Do you offer smart metering?Do you offer extra social connections?Do you offer other services? You haveto a bundle with internet traffic, or viceversa. In five years from now, thesebusinesses will be hard to recognizeas they are today in fact. Because they’regoing to be completely interconnected.
That really resonates and I think a numberof our utilities and energy providerswould definitely understand that this isa significant shift. And I do respect yourcomments around social media andthe fact that it potentially could be moreof the tail wagging the dog here andwhat we’re really talking about is actuallya completely different operating modelto support these new customers whichI think is something that we all need toget our head around. I liked your commentsabout the new products and services.And one of the things Gerd that you havereally highlighted for us, is this shiftto the ecosystem of value. And, that priceand price alone, which clearly, todayis one of the key drivers of a lot of thepropositions with utilities and energyproviders may not hold up for muchlonger. There may be other values thatstart to become more important withconsumers. Can you comment a little bitabout your thinking in this particulararea?
The reality is that price doesn’t reallydrive commerce. It’s trust, that drives thecommerce, and that’s really true forany business but especially in utilities.If you eventually find somebody who’sgoing to do it for one cent cheaper perkilowatt maybe you switch before, but if you have other things that this companyis providing you wouldn’t switch. It’slike in telecomm you don’t churn andchange your provider if you also havea music service attached to it, or, if yoursocial connections are also in the samesystem then you wouldn’t switch.