How Customer-centric are you?
There is no more profound result of the Internet and general availability of information technology than the shift of power from institutions to individuals. This impact is more profound than simply the availability of information to the masses, or the ability to derive intelligence by processing this information.
What the individual has at his/her fingertips is the complete picture of the market and the options presented by the market. Whether this picture is available today to energy consumers matters little. The fact is it will be available to them soon enough and they will act on not only their complete picture of the reality of their energy options, but also on its relation to every other market picture available to them.
What does this mean? That the energy markets of the future will be designed by and responsive to energy consumer preferences, regardless of what the new emerging energy institutions might prefer. Any attempt to usurp the ‘power or opportunity of choosing’ by any segment of the energy markets will fail miserably!
Creating the Innovation Engine
The greatest danger for energy companies, regulated or deregulated, emerging or traditional, is their inability to innovate in response to emerging consumer trends. Energy companies need to listen to signals provided by their commercial, industrial and residential consumers and, as important, have the ability to respond.
The ability to respond has been a serious deficiency for the energy industry throughout its history. The ability to listen and lead in the delivery of new solutions has been largely absent. This is the concept of the innovation engine. To survive and prosper in the face of rapidly changing rules (institutions) in today’s globalising energy markets requires an unprecedented ability to assimilate and analyse consumer wants based on data inputs, the ability to change rapidly in response to consumer preferences and market signals, and to develop new solutions that are defined and preferred by energy consumers.
This observation has led this writer to propose that energy leadership adhere to the principle of “ib4e™”, innovation before excellence. The traditional paradigm of pursuing excellence in existing business processes may lead to failure in a market where business processes are changing at rates that render the focal point of such a strategy obsolete – that is, the business processes superannuate before excellence is possible, making adopting the new emerged business processes far more important than rendering them perfect.
Respecting the customer will not be an easy task. It will require a redefinition of most, if not all, of the business processes and technology underpinnings associated with the customer. It will require a new agility – a new standard for customer response. It will require a new sensitivity to customer preferences. In fact, it will require a whole set of new practices aimed at anticipating the direction of energy customer preferences, and offering, in advance of clearly defined requirements, options that move customers more quickly in directions of their choice. Beyond business processes and old world energy cultures, the new requirement for energy companies to be customer-centric rattles the technology bedrock of these institutions. Legacy Customer Information Systems (CIS) are now the lumbering giant of old, ill-suited to provide nimble response to changing market conditions and customer requirements. Customer choice also puts a new face on CRM for energy companies today.
Such is the Stuff of Competitive Advantage
Building the organisation that innovates – that continually reinvents itself in response to changed consumer-driven market models – is the worthy paradigm in today’s energy markets. And building this innovation engine requires a redefinition of the people, processes and technology that are employed within the energy company (utility) to define and deliver service to customers.