Innovation is an unquestionable profit driver – it’s also unquestionably complex. Here’s the deck with our most frequent innovation strategies for utilities (and our best implementation practices for seeing them through.)
2. Energy industry megatrends create need for innovation
within utilities
Innovation Strategy
Traditional utilities must be able to compete in these spaces, or risk losing their customers
to new firms that are entering the market by piecemealing the traditional energy value chain.
Energy is an affordable commodity
for everyone that requires a customer
centric and smart management
of transactions and assets.
Human interaction is reduced to a
minimum when artificial intelligence
creates autonomous, data driven
and decentralized micro-grids.
Digital value-added services meet
demands from consumers to provide
solutions that promote individualism,
convenience, and control.
ENERGY INDUSTRY MEGATRENDS
Democratized
Supply
Autonomous
Grid
Connected
Customer
Page 2
3. Innovative companies outperform industry peers on
growth, profitability and share price development
10 Most Innovative Companies Top 10 R&D Spenders
50%
69%
65%
40% 40%
49%
Revenue growth
(5-yr. CAGR)
EBIDTA as a % of
revenue (5-yr. Avg)
Market cap growth
(5-yr. CAGR)
100%
50%
0%
Highest
possible
score
Normalized
performance
of industry
peers
Lowest
possible
score
Innovation Strategy Page 3
4. Innovation is complex – Options need to be evaluated
based on proximity to the core and time horizon
OPTIONS FOR INNOVATION DESCRIPTIONS
Business incubation
Support of and cooperation with
start-up companies in early stages
Venturing
Equity investments to assess and
access new growth opportunities
Strategic partnerships
Partnerships/joint ventures
that drive incremental
revenues for business unit
M&A
Acquisition of developed
companies with existing business
Internal R&D
Internal product development
Business incubation
M&A
Time to impact for business unit
Venturing
Strategic
partnerships
Internal R&D
Proximity
to core
business
New
Adjacent
Core
1 – 3 years 4 – 7 years 7 – 10 years
Innovation Strategy Page 4
5. Incremental and disruptive innovation have different
targets and require different setup and tools
IMPLICATION
FOR COMPANIES
Make sure structure
and processes are
derived from
innovation strategy
Set clear KPIs in place
to effectively steer
innovation activities
Account for external
partners when
setting up the
ways of working
Organi-
zation
Board
Area 1 Area 2 Area 3
Strategy Strategy Strategy
HR HR O and M
… Controlling …
InnovationBoard
Area 1 Area 2 Area 3
Strategy Strategy Strategy
Innovation Controlling Innovation
HR Innovation O and M
... ... ...
INCREMENTAL
IMPROVEMENT
DISRUPTIVE
INNOVATION
Strategy
Target
Scope
External
partners
Product/process
improvement
New business
models
Within current
business activities
Outside core
business
Provide
tools
Co-generate/
deliver ideas
Innovation Strategy Page 5
6. We help our clients become innovation leaders through
a three step process
INNOVATION
STRATEGY SPRINT
ORGANIZATIONAL
READINESS
IMPLEMENTATION
SUPPORT
What does the company
want to achieve with
innovation & how is
it going to innovate?
What organization
will best support the
company’s innovation
strategy?
Key
Question
How does the company
most effectively
implement its
innovation strategy
and become a leading
innovator?
• Innovation model with
link to corporate strategy
• Alignment with executive
team and innovation
team
• Defined role of regulated
business in innovation
activities
• Defined superstructure
inside or outside of
organization
• Defined people needs,
reporting lines, and
accountabilities
• Steering model and
relevant KPIs
• Tracking of initiatives
implemented and
sufficient progress
assured
• Detailed KPIs for
steering model
• Filled resource needs for
innovation organization
Phases
Expected
Output
Innovation Strategy Page 6
7. We helped innogy stand-up its industry-leading
innovation hub
INNOGY INNOVATION HUB OUR PROJECTS SUPPORTING INNOVATION HUB
innogy launched the Innovation Hub to focus
on key topics derived out of energy industry
megatrends and opportunity spaces
• Big Data
• Smart & Connected
• Disruptive Digital
• Shared Economy
• Machine Economy
In its first 4 years the Innovation Hub saw
• 600 start-ups sourced
• 120 evaluations started
• 60 successful pitches
• 24 businesses launched
Setup of Innovation Hub 1.0
We defined the structure and goals for the
concept that would become innogy Innovation
Hub
Develop strategy + data-driven business model
We designed a strategy that uses hard data to
find the most promising projects
Refine strategy, organisation setup, and steering
We advised on restructuring the organization to
promote streamlined innovation
Innovation Strategy Page 7
8. Our consultants are passionate about energy
and innovation
Innovation Strategy
Relevant topics of expertise
• Innovation Strategy
• Customer Experience Journey
• Change Management
Andre has 5+ years of consulting experience in the
energy sector. He was a core team member for the
setup of innogy’s innovation hub.
ANDRE RICHTER
Principal
GRAHAM DICKSON
Project Lead
Relevant topics of expertise
• Corporate Strategy
• Innovation Strategy
• C-Level Support
Oliver has over 22 years of management consulting
experience and 17 years with energy clients from
around the globe.
OLIVER RIEDEL
Managing Director US
Relevant topics of expertise
• Corporate Strategy
• Innovation Strategy
• Organizational Design
Jonathan has 12+ years of experience as a consultant
and strategy leader. Previous employers include
A.T. Kearney, Alcoa and the KION Group.
Relevant topics of expertise
• Strategy and Implementation
• Process Optimization
• Business Model Innovation
Graham has 7 years experience in the energy industry,
He has worked with C-suite executives on Strategy
Development, Energy Policy, and Sustainability.
JONATHAN CHEN
Principal
Page 8
9. innogy Consulting brings the experience needed
to successfully make innovation happen
INNOVATION
STRATEGY
We have experience in setting
up innovation strategy and
implementation – within and
outside the utility industry
INNOVATION
MANAGEMENT
We are experts in innovation
processes through skills in our
dedicated operations practice and
actual facilitation of innovation
CORPORATE
STRATEGY
We have developed new
strategies for global clients
ranging from small sizes to
huge corporations (200k FTEs)
ORGANISATIONAL
DESIGN
We develop strategies that can
be translated into practical and
effective organizational design
FACILITATION
CAPABILITY
We are skilled in organizational
change through our change
practice and our dedicated
LRN LAB unit
INDUSTRY
EXPERTISE
We have been the trusted
advisor in the energy industry
for 30+ years
Innovation Strategy Page 9
10. Since 1981 we have been helping utility clients succeed
through our unique access to global energy experts
Innovation Strategy Page 10
GLOBAL
PRESENCE
ACCESS
TO INNOGY
GROUPHISTORY
LEADING
PRACTICES
innogy consulting started
its operation in 1981
and in past 37 years it has
transformed from a small
organization to a global
management consulting firm
offering various services to
utility clients.
We offer traditional
management consulting
expertise within
the following practices:
Strategy, Operations,
Change Management,
Digital, and LRN Lab. We
have worked on projects
spanning across the entire
energy value chain.
Our extensive knowledge
in management consulting
is backed by 45,000 global
energy experts from the
innogy Group, who have
practical utility experience
and help us in delivering real
world recommendations and
exceed clients expectations.
In order to provide the best
client service we have local
offices around the world:
Essen, Berlin, Munich,
Frankfurt, Den Bosch,
Prague, London, Dubai,
Boston. We staff our
projects on a global basis,
leveraging the unique
expertise of each team
member.