Innovation is about introducing “anything new or useful” that creates value for your utility or its customers. “Anything new” means a first-of-its-kind idea for the organization. In the regulated utility industry, going first means taking on risk. Often, these first-of-their kind ideas are not only risky, but they can also be controversial, or unpopular with the status quo way of thinking. Reducing this risk through rapid piloting and experimentation is the purpose of your innovation program, which is built to stress test new technology, learn from it and to share the valuable learnings back through the utility in a way that can be deeply strategic to meeting your corporate initiatives.
But too often we see “pilot purgatory” sink in because too many skunk-work pilots fly under the radar. Here the utility never knows if or when they land and they don’t capture the value through the learnings. Often, this means someone else will probably attempt a similar project only to duplicate the effort and find similar results which amounts to a lot of wasted time and energy. In today’s reality where we are asked to “do more with less” and engineers feeling stretched thin, this is not the best use of a utility’s most valuable assets – their human capital.
In this second article of our three-part series commemorating Energy Central’s 2024 Special Edition on innovation, we focus on the importance of piloting and how utilities can get through the pilot process by having an innovation program that standardizes pilots to move ideas into production faster.
5 Best Practices to Avoid Pilot Purgatory
To move beyond pilot purgatory, utilities can adopt a few best practices. Here’s our top five.
1. Standardize the Innovation Pilot Process
Creating a standardized process for innovation where the pilot process is “built-in” can help streamline activities and ensure that every attempt follows the same rigorous methodology. This consistency helps in comparing results and scaling successful pilots more effectively. It creates a standard for the organization in documentation which is becoming more important as many utilities are receiving significant grant money to trial first-of-their-kind ideas. Our data shows less than 20% of new ideas make it to production. Without a standardized process that is documented, how will you report what came out of this investment if your pilot doesn’t advance?
2. The Importance of a Succinct Challenge Statement –Shorten Your Pilots by 65%
The best pilots in an innovation process start with a clear and concise challenge statement. By defining the problem to be solved in a sentence, you can provide clarity and a narrow scope around your field test a focused pilot. This clarity helps teams stay aligned and ensures that everyone understands the goals. Plus, we’ve seen utilities shorten their overall pilot process by up to 65% following this one simple trick in developing a succinct challenge statement:
[UTILITY] needs [CAPABILITY] in order to [BENEFIT].
For example, here is one we recently crafted: Our utility needs an [Electric Fleet Management solution] in order to [prevent transformer overloading].
When you can get what it is you hope to test down to one sentence, it becomes easier to think through the questions you would want to ask in the test plan which then drives acceptance criteria. It is also easier to state any assumptions and out of scope items to avoid pilot purgatory.
3. Always Draft a Test Plan Ahead of the Field Trial
A well-thought-out test plan is critical for a successful pilot. In our templates, we ask that the Subject Matter Expert driving the pilot capture the following, every time:
- Define each test criteria.
- Explain what acceptance for pass/fail look like for each criterion. What metrics equate to “pass”?
- Enter any assumptions, for example you assume that you will have accurate data to run the trial or what else may need to be provided for a successful pilot. This is important because if these can not be provided, a pilot may not make sense and you can pause it before a lengthy experiment begins.
- Set boundaries with what’s out of scope. Too often we see pilots drag on longer than they should due to scope creep in the field. Try to avoid this by moving any new items in to a new pilot should the first test prove successful.
4. Empathize by Getting “Day in the Life” Feedback from Field Interviews
Empathy is key to understanding the real-world challenges faced by the users who will be asked to change their way of working to embrace the new technology you are testing. Conducting field interviews and gathering “Day in the Life” feedback at the end of the pilot helps gain insights into a user experience - the voice of your customer. This feedback is invaluable in ensuring the new idea works better than the current state way of working.
Avoiding this step can put the whole transformative idea in peril because when it is ready to get deployed to the field, without proper feedback, you could hit a wall of status-quo thinking. This is the number one killer of innovation as you near completion.
5. Land and Expand with a Decision to Move to Production
The ultimate goal of any pilot is to move the idea into production. Establish a clear decision-making process for what a pilot needs so decisions about transitioning to full deployment are consistent. With this standard, you can ensure fair and integrated decision-making which is a key in building trust for those that will be asked to run a different pilot through the same process.
Finally, consider setting predefined criteria for success like ensuring necessary resources are ready to support and scale the solution on a “go” decision. One of our customers call this the “warm hug” as the innovation program hands the idea over to the business for deployment. You want a clean and clear handoff always.
The Path Forward
Escaping pilot purgatory to deliver on the capital projects that will drive your grid modernization or decarbonization approaches are more important than ever before. With funding coming from rate cases, grant money or innovation funds, documenting the learning is important to show that even if your first attempt failed, you were able to parlay the learnings into a second or third attempt that was the success.
The stakes are high. By adopting these best practices, utilities can ensure they are not only keeping pace with the industry but also leading the charge towards a cleaner and more sustainable energy future – one that their customers and regulators can appreciate.
If this resonated with you, be sure to catch a replay of our Power Session: “De-Risking Innovation within Regulated Utilities” with panelists from Liberty Utilities, National Grid, PGE, PG&E, Southern and world renown innovation expert Dr. Linda Hill, HBS professor and author of Collective Genius: The Art and Practice of Leading Innovation.