Those specific conclusions focus on how organizational culture frames internal communications and deployment of new technologies. As the report noted, it is “difficult to capture the full spectrum of factors that make an organization unique, such as history, hierarchy, mission, leadership, experiences, attitudes and values. “ But utility and regulatory cultures must change into innovation cultures to plan and manage the transformations that Smart Grid technologies and services can play in the electricity value chain to benefit consumers and society.

First, the silos that are common to most utilities can impede successful deployment of Smart Grid technologies. Several panelists at the Electricity Storage Association conference in San Jose last week pointed out that energy storage challenges the traditional utility classifications (silos) of generation, transmission, and distribution. Depending on the type of storage technology and application, it can be considered time-shifted generation, or a service to bolster power quality for transmission purposes, or a distribution asset to improve reliability, or a mobile battery for geo-shifted generation. Pity the energy storage vendor with a solution that crosscuts silos. Both utilities and their regulators must take care to not use siloed thinking about innovative technologies or solutions – they must think on a bigger, broader scale of what safe, reliable, and cost-effective electricity means and not in the context of limited applications for a single link of the electricity value chain.

Second, investing all organizational energy into emerging technology deployments without concomitant process, policy, and people changes is a sign of pending doom for project success. It’s like slapping fresh paint on a termite-riddled house – ignoring the structural weaknesses undermine the results of the paint job. It’s a common trap across all types of businesses. Experienced project managers will tell you that technology deployments are easy compared to planning and implementing organizational change.

Change management can facilitate cultural change. It is a necessary component to any successful Smart Grid project, and vital to any project that has visible or disruptive impacts to consumers. Business research shows that the most common reason for failure of major projects is the lack of change management plans that build internal consensus and support. Managing change within a utility requires an in-depth communications plan and targeted messages that are delivered at all organizational levels in all functional areas. Successful Smart Grid projects must also extend communications to external audiences – consumers- as well, to educate and enlighten them about the short and long-term benefits of new technologies or services. “Trust us” is not a communications strategy. Regulatory agencies must recognize the value of cultural change and support utility change management and communications activities as necessary steps to successful Smart Grid initiatives.

We’ll discuss tactics in a webinar on June 21 about change management and communications about Smart Grid benefits to internal and external constituencies. Join us to learn more about transforming operations to support innovation cultures.

A few weeks ago I had the opportunity to discuss, well, no, that’s the wrong verb to describe the scenario.  I had the chance to bow on bended knee to humbly suggest to a representative of my local utility that it could improve its messaging about the benefits of smart meters and Smart Grid technologies in general, and target messaging to women in particular.  The response, delivered in the chilliest of tones was that since the utility had a woman at the head of the marketing effort, that demographic was more than amply covered.  No, sorry, it’s not covered.  Not even close.       

It is employee attitudes like this that will kill Smart Grid support, which is needed at both the taxpayer and ratepayer levels.  It is employee attitudes like this that have utility CEOs despairing of successfully effecting change within their own organizations*.   It is attitudes like this that torpedo any possibility of a utility being the trusted advisor to help consumers manage significant changes in their relationships with energy.  And the saddest realization of all is that while consumers overwhelmingly expect utilities to offer advice about energy consumption, utilities like the major IOU (Investor Owned Utility) in my area are serving up plenty of material for future business school courses about how to squander trust in utilities through a lack of interest in ratepayer communications.    

There are smart utilities out there that have successfully enlightened their customers about smart meters and Smart Grid benefits, and it would be fantastic if all utilities actively shared successes and failures to facilitate the development of practical advice.  The smart utilities understand that today’s ratepayer relationship may migrate to a customer relationship in the future, and that customers will have choices about energy suppliers.  These same utilities also understand that sustaining and growing trust relationships will help engage consumers to be enthusiastic participants in residential demand response programs and energy efficiency programs. 

So when you read the definition of the Smart Grid in the Smart Grid Dictionary, the point about bi-directional communications is more than an evolutionary change in a network, for some utilities, it’s a revolutionary change in their behaviors.  You may not always like what you hear from your ratepayers, but start listening now and building rapport to deliver the complex messages about the Smart Grid and the benefits to consumers.  And Smart Grid solution vendors need to remember that the Smart Grid is more than just wealth creation for them.  It won’t happen without value creation for consumers. 

To all the hard-working, dedicated, and insightful PG&E employees who understand the importance of enlightening consumers about Smart Grid initiatives and are working to do that, thank you from the bottom of my heart.  I support your efforts, and I am sorry that you have to deal with colleagues who just don’t get the fact that Smart Grid success is contingent on ratepayer and taxpayer support.  Maybe if you post “It’s the Consumer, Stupid” signs in the office, the message will sink in. 

*IBM global study of utility CEOs:  70% anticipated turbulent change within their organizations about Smart Grid, and from one year to the next reported a 19% drop in their expected success in managing that change.