Originally published in Energy Central by Allegra Hodges, PGE's Head of Strategic Innovation
Portland General Electric (PGE) is embarking on a journey to support digital innovation by exponentially increasing the number and quality of ideas they put into their innovation program. By rapidly testing and prototyping a variety of ideas, PGE hopes to drive transformational innovation with disruptive technology. Across the enterprise, teams have been experimenting with a rich set of digital transformation technologies from AI to 5G with a future roadmap to test digital twins, AR/VR, drones, automation, grid edge intelligence, new sensing technologies and transportation electrification. Digital transformation is not just a nice to have, it is a must-have if PGE is to meet the aggressive decarbonization targets for 2030.
However, disruptive technology was not the biggest learning PGE acquired from building the structure to support digital transformation. Instead, it was the importance of embracing the “the why” and “the how” behind digital transformation. PGE had to think differently about the way they wanted to innovate. Where innovation traditionally happened in pockets, now the utility wanted to embrace enterprise-wide collaboration to accelerate ideas and learnings across the business. This required hard work to align the rest of the business to support the innovation process from the support of the board to business partners in operations, risk, IT, and cyber security – as well as recruiting outside help from ecosystem tech partners.
Innovation is part of many employees’ day jobs; there was not a dedicated staff managing innovation or innovating in an R&D group. Therefore, it became important that PGE digitize and automate its own innovation program. With dashboards crunching data, PGE has created a function to set the vision around innovation, establish KPIs, and transparently measure the effort and time frontline innovators spend in the process. Additionally, PGE wanted to ensure that for every innovation experiment, the learnings were captured and shared internally.
An “Air Traffic Control System” for Innovation Management– How Innovation Takes Flight at PGE
To get the organization behind the effort, PGE needed a simple way to explain the “why” and the “how” behind the complicated process of transformational innovation. PGE set the foundation for their program on an “air traffic control system” for innovation. Here, the innovation process was intuitively analogous to the way a plane takes off and lands at an airport:
Ideas are catalogued in the hangar, which serves as a library of ideas that helps to organize and make opportunities visible.
Ideas that are aligned with strategic priorities and have a business unit sponsor (captain) become planes on a runway with a schedule for take-off and arrival.
Pre-flight checklists are completed by the business sponsor (captain) and reviewed by IT and cyber security before a plane could be cleared for take-off.
Field trials become test flights that are run in 90-day sprints.
An air traffic control system (dashboard) makes clear which flights are in the air. The innovation manager guides the process to ensure safe, on-time landings with warm hand-offs into the existing decision-making venues in the organization, where good ideas are carried forward into the production environment.
Harnessing PGE’s “Collective Genius”
PGE did not embark on their innovation journey alone. They created a supportive ecosystem of external support from their board, tech leaders, accelerators, and academia to help drive a quality pipeline of ideas. In the ideation stage, PGE works closely with industry partnerships from Energy Impact Partners, EPRI (LCRI, Incubatenergy), along with accelerators like Greentown Labs and the 5G Open Innovation Lab. With the help of InnovationForce, PGE created their own Connected Utility innovation lab to support 5G initiatives across an ecosystem of digital tech leaders from Intel, Google, T-Mobile, Expeto and InnovationForce who have identified nearly 50 use cases being evaluated for trial. PGE based the idea of ecosystem innovation on the work of Harvard Business School professor Linda Hill’s book Collective Genius. This book has helped them see that there is a big piece of the innovation process that can be opened to an actively engaged ecosystem of solution providers ready and willing to co-create products with PGE that are utility-grade.
Rapidly Testing Digital Transformation
In the innovation process, the emphasis is on learning fast. With that goal in mind, PGE created a five-step process to quickly test innovative tech in the field in 90 days or less. Field trials and “day-in-the-life” results are gathered to determine whether the new solution worked better than the status quo. These metrics were used to assess the business case for the solution. Every quarter, go/no-go decisions are made on whether to proceed towards a full-scale business case or to archive the lessons learned in the innovation library (hangar).
Learnings are documented and data are shared in an Innovation Hub with dashboard reporting. This structure became important as the number of use cases started growing exponentially (now up to over 50 being tested) through PGE’s need to test the limits of new digital transformation from how to leverage video, geospatial data, surveillance, automation, robotics, 5G and AR/VR.
Digitizing Innovation - Measuring Results in an Innovation Dashboard
Innovation cannot be coerced; a supportive environment for it must be created through collaboration with frontline employees who lead the use case tests (test flights). Here, the importance of measurement is key so that teams can see the outputs of their efforts and share results with management and the board. Using a dashboard created by InnovationForce from SLAs that were created with different stakeholders in the innovation process, PGE tracks the number of days spent in each stage to drive accountability from all participants, keeping them aligned. Digital innovation dashboards gave everyone a transparent benchmark and data to assess how they were doing in the process. If roadblocks or obstacles were present, they would be seen in the process and could be removed with help from executive champions and air traffic control.
Some of the important KPIs measured:
Quality of Intake: how many ideas are being worked, sources of ideas, and quality of ideas.
Throughput Efficiency: how many days are being spent in each stage, how many people are participating, how many decisions are being made, are decisions made on-time?
Quality of Output: how many test flights landed on-time to drive decisions? What flights are advancing into production-ready deployments? How much capital (CAPEX) can be redeployed to high-value projects, and how much operations and maintenance (OPEX) can be avoided with new digital innovation?
The process has already helped vet ideas that have identified as much as $500M in CAPEX and $500M in OPEX savings/avoided (estimated over 20 years) by use of more affordable, disruptive digital technology.
Key Lessons Learned
Formalizing the innovation process to move more digital transformation through the pipeline has had a positive effect on the organization from the board to frontline innovators. While this has taught the utility many lessons, here were two of the most important learnings:
Innovation management is different from project management: innovation is about creating the spark to ignite great ideas and energy to solve them within the organization. It requires inspiring the team to go after a moonshot idea or pursuing the art of possible. This takes building trust throughout the organization so that the frontline innovation team is left to drive ideas in a management environment where they know it is safe to “fail fast”, or, as the innovators at PGE like to say, “learn fast.”
Measure innovation to make it a transparent, closed-loop process: As PGE rolled out the innovation program, they sought buy-in from the stakeholders in the process who agreed accountability was an important team norm to enable innovation. By measuring SLAs in the innovation dashboard, stakeholders know how much time they are spending in each stage against their target and the organization strives to make faster decisions. Because PGE knows where test flights are being held up, the organization can have data-driven discussions about process improvement and reset expectations around realistic priorities based on time and budgets.