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A perspective on the networked energy consumer
An interview with Gerd Leonhard, Futurist and CEO of The Futures Agency, and Greg Guthridge, Global Managing Director of the Accenture Retail Business Services for Utilities
Narrator: Welcome to the latest Accenture Retail Business Services podcast in the Utilities Podcast Series. Today we’re covering an interview with Gerd Leonhard, futurist and CEO of The Futures Agency, and Greg Guthridge, global managing director of the Accenture Retail Business Services for Utilities. Gerd and Greg, welcome. We’re looking forward to hearing your discussion today, and I’ll hand over to Greg, to introduce our first topic. Greg Guthridge: Thank you very much and thank you everybody for joining our podcast today. We’re very excited to share with you three interesting concepts that have been featured in our international utility conference here in San Francisco, and leading up to the launch of our New Energy Consumer research and point of view which will be a full and comprehensive overview of our entire new energy consumer thinking around the utilities space. I’m really excited to have Gerd here today. Gerd has been collaborating with us around some of the, concepts and today we want to talk about three very interesting trends that are affecting consumers in the energy space and, frankly, might have some relevance to utilities and energy providers. So Gerd the first thing that I’m hoping that 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 from being individuals to more networked. Can you give us a bit of a sense of what you mean by that and what the implications are for a utility? Gerd Leonhard: First of all thanks for having me here, really great to be here. I have this concept of the networked society what that means is basically now that we’re essentially always on, our mobile devices using tablets for news and video and so on, we are becoming quite a different cup of tea in terms of being a customer. We’re used to being able to rate people, to rate organizations, to comment on what they do, to tweet about what doesn’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 see Facebook and so on. But now it’s happening B2B as well. So that people are forced to be more transparent. We’re forced to fix things quicker. We’re forced to react faster, you know this kind of idea of newness. And then this book by Rohit Bhargava that’s coming out very soon called “Likeonomics”, points out that you essentially don’t do business with people or companies that you don’t like anymore. This is a global phenomena. What that means, as a utilitarian provider, you have to go beyond, beyond the meter, beyond the power, beyond just having, you know making it work. Greg Guthridge: So Gerd, clearly this has a major implication for utilities. If we look at some of the other industries like banking and financial services and travel, the concept of the networked customer has been around for a long time and, if I understand what you’re saying, the best energy providers in the future are going to be the ones that embrace social media and networking and interdependence, head on, and start to interact with their customers in a completely different model. Is that correct? Gerd Leonhard: Yeah in a way you could say the word social media is a bad word because in the end what we’re talking about is a social operating system or the whole way of how you do business is changing and the way that we collaborate and actually how we work and study and how we pay and how we vote and all these things. So this is not about social media or Facebook or twitter these are just the top level things. It goes much deeper than that for example being an open organization requires the internal organization to be open to conversation, and to be open to criticism and change how they work together internally, before they go to the outside and talk to them on the outside.
So it has implications across the board. It also impacts the business model, which means that it’s not going to be about selling energy per say, I mean that is an assumption, of course that’s a given that you’re going to sell energy, but what else are you going to do? What else do you offer? Do you offer smart metering? Do you offer extra social connections? Do you offer other services? You have to a bundle with internet traffic, or vice versa. In five years from now, these businesses will be hard to recognize as they are today in fact. Because they’re going to be completely interconnected. Greg Guthridge: That really resonates and I think a number of our utilities and energy providers would definitely understand that this is a significant shift. And I do respect your comments around social media and the fact that it potentially could be more of the tail wagging the dog here and what we’re really talking about is actually a completely different operating model to support these new customers which I think is something that we all need to get our head around. I liked your comments about the new products and services. And one of the things Gerd that you have really highlighted for us, is this shift to the ecosystem of value. And, that price and price alone, which clearly, today is one of the key drivers of a lot of the propositions with utilities and energy providers may not hold up for much longer. There may be other values that start to become more important with consumers. Can you comment a little bit about your thinking in this particular area? Gerd Leonhard: The reality is that price doesn’t really drive commerce. It’s trust, that drives the commerce, and that’s really true for any business but especially in utilities. If you eventually find somebody who’s going to do it for one cent cheaper per kilowatt maybe you switch before, but if you have other things that this company is providing you wouldn’t switch. It’s like in telecomm you don’t churn and change your provider if you also have a music service attached to it, or, if your social connections are also in the same system then you wouldn’t switch.
So basically the added values are becoming the core business, and if you compare to media for example, newspapers or movies, it’s quite clear that we’d like interfaces and designs and the social connections that come through it, and all the extra stuff. The added value has become, the core reason that I buy. For example if I buy a car, the added value may be that I can customize the dashboard using apps, you know maybe I buy the car because of that, because really the engine’s all the same. This is a key issue and I think really what that means is that you can no longer live in the world where you say you know we have the cheapest and best possible product and that’s that right. That’s not the reason that people will make the choice to go with you. Greg Guthridge: I think this is an incredibly important message Gerd, and I can see, in our New Energy Consumer research highlights very clearly, that the most successful energy providers will be the ones that combine price with some other kind of value and these other values, whether that be green values or sustainability values prestige or fun or whatever it is, are going to play a more increasingly important role in in the value proposition. Let me shift to one other topic, one other key thing that, you have mentioned a number of times that I think is important to highlight. And that’s the concept of interdependence. You have made it quite clear that, the days of organizations, operating in silos, is coming to an end. And the eco systems and the interdependence capabilities will be, in effect how many companies will survive in the future. Can you highlight your point of view and what does that mean for utilities and energy providers?
Gerd Leonhard: In a connected society we can’t have businesses that are essentially either monopolies or silos or cartels or It’s basically very hard to build that today. What that means is that five years from now there won’t be a business model that says that you’re just going to do all the things yourself, and keep all the profit, it’s basically going to collaborate with others and share the profit that in itself is a sort of a new kind of protocol, sustainable capitalism. It grows as the others grow, otherwise, if you only grow when you are growing you’re going to outgrow the others and then eventually it ends. We have in Europe quite a few pointers in this direction what’s happening in Europe. Also the fact that renewable energy is of course a huge generator of jobs and new possibilities there that are, much more decentralized than traditional energy so there’s lots of benefits in that system. Greg Guthridge: Gerd this has been very interesting, when we think about the five or ten or fifteen year horizon for utilities and energy providers and what they might look like in the future, it’s incredibly interesting to hear these points of view around the networked customer, around the value ecosystem and these interdependent capabilities. They’re themes that need a lot more thinking, in terms of how we operationalize them and what they mean from an operating model for utilities, but, nonetheless, many other industries have already been down this path and are already operating quite successfully in this new environment. So very much appreciate your points of view on this. Gerd if any of our listeners are interested in more information on your point of view, how can they contact you?
Gerd Leonhard: I’m quite popular on Twitter G-Leonhard, G-L-E-O-N-H-A-R-D is my twitter handle, also if you’re interested in the topic from “ego to eco”, which is my next book you can just Google, “ego to eco”, and you’ll find lots of videos and those kind of things, and of course my website is at future agency.com and mediafuturist.com. You can also visit me on Facebook just look for Gerd Leonhard. Greg Guthridge: In terms of Accenture, for our listeners, you can follow our blog on utilities and energy providers and you can also visit our site at Accenture.com where our new and latest version of the New Energy Consumer point of view and research is available. Have a look, you’ll get a complete and comprehensive overview of our point of view for New Energy Consumers and, next generation customer care utilities. Thank you very much everyone. Narrator: I’d like to thank our listeners for joining us for this installment of the utilities podcast series. And to learn more about Accenture’s utilities industry capabilities, to hear other podcasts in our series, or to see our recently published New Energy Consumer research, please visit our website, which is www.accenture.com/utilities. Thank you.
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