Twenty years ago, business value was measured in dollars and cents. In today’s uber-connected world, everything is scrutinized — and any misstep can turn your markets against you. To succeed in these modern times, industry needs to shift their barometers of success to the triple bottom line: people, process, and planet.
Understanding The Path
The way people work has changed exponentially over the last few years. The utility industry has invested in and undergone substantial digital transformations regarding IoT, AI, machine learning, data analytics and more for the purpose of improving process efficiency.
In most cases, improvements served to improve the overall work experience for people too. It eliminated the drudgery of paper and data entry. It boosted productivity while simultaneously making work safer. It created a halo effect of job satisfaction, where employees saw tangible growth.
Often, these benefits of digital transformation spilled to the customer base as well. Faster, safer and more stable processes lowered costs. Digitization opened the floodgates of communication, creating more frequent touchpoints, self-service and overall improved customer experiences.
Meanwhile, as the transformation process rippled across the industry, digitization connected communities around industries and the world. Unified, people were able to collaborate more easily across distance and time. Topics like global warming became a focus. Data became available for independent analysis, and Joe Public had the keys to make a difference.
Certainly, the utility industry realized long ago it needs to lead the change toward renewable energy. It is common sense to realize you are working with a finite supply, and to continue operations, alternative supplies will be necessary. In a world where these supplies are not available, utilities must work earnestly to create them. However, we did not fully predict the benefits of those efforts on today’s business performance.
Proof That Being Good Is Good Business
This new interconnected world afforded new parameters to influence customer relationships with vendors. Sustainability resonates with all demographics on some level, and while most are unable to effect serious change, they can use their wallets to encourage others who are being better stewards for the future.
Overwhelmingly, sustainability-minded products beat out the competition. More than 90% of the time, customers will choose a product because they prefer to feel better about their purchases. Nearly three in four customers will actually seek out information on sustainability when considering purchases. In fact, consumers generally indicate they would pay an additional 5% for a green product if it met the same performance standards as a non-green alternative. A solid majority of them will switch brands if they discover environmental transgressions.
So, sustainability isn’t just something we need in the long term for our planet, but in the very immediate term, it is governing customer relationships and purchasing decisions.
Conservation and Sustainability Hits an Inflection Point
For more than a decade, utilities confined their efforts toward environmental conservation and sustainability to R&D and communications. Most of the efforts were in active pursuit of a competitive advantage when fossil fuel supplies run out. These efforts involved huge investments and frequently made the agenda for board meetings, annual reports, and investor relations.
Efforts on these fronts often earned positive media coverage, and transparency reports became standard. Almost compartmentalized from regular operations, and only tangible in reports, the real impact of a truly sustainability-minded utility was unapparent.
Then the pandemic happened. Anyone who hadn’t already, desperately needed to complete their digital transformation. Eighty percent of energy industry respondents to the KPMG 2020 CEO Outlook said they have either accelerated or rapidly accelerated their efforts to digitize operations and create the next-generation operating model since the outbreak began.
Unable to avoid change, some smart utilities used it as a catalyst to improve their relations with their communities. They used their newfound business agility to create new engagement points, deepen connections and earn the moniker of being an essential steward of the markets they serve.
Georgia Power: Transforming Trash to Treasure
Utilities like Georgia Power looked at creative ways to address waste in their vegetation management activities. In urban areas like Atlanta, crews frequently carried trimmings and debris 15-20 miles for disposal outside the city limits. In a city that jokes that Atlanta is an hour away from Atlanta, this distance translated to an expensive loss in productivity and fuel. Instead, Georgia Power created a digital system to create new waste depots, allowing community farms, non-profits and schools to register to receive free wood chips.
Now Georgia Power can access disposal sites that are in a reasonable range, boosting productivity and lowering costs. Importantly, they are also creating powerful ways to improve job satisfaction for their crews, while also elevating sentiment for their brand across their customer base. Their people are prouder of the work they do, and their efforts affect civic centers that echo gratitude for their brand. This is smart business.
The success of Georgia Power’s woodchip program inspired another opportunity to be a community ambassador by working with Zoo Atlanta. In this program, they more selectively reroute fresh vegetation from tree trimmings to be used for zoo animal feedings. The star animals like giraffes and elephants now have access to fresh, locally sourced food thanks to the power company. And you can bet that the zoo and the animals are sure to publicly thank and promote the goodwill of Georgia Power. These two programs, made possible by GIS-powered workforce management, created a triple win for process, people, and the planet.
AEP: Being Good Is Good Business
AEP’s history of environmental, social and governance efforts is also bearing fruits. Over the past decade, they increasingly found that efforts here realized both short- and long-term benefits across a variety of areas with a profound effect. Today, those seemingly softer efforts, aimed at benefiting the world around them rather than solely focused on their coffers, are becoming as pivotal to success as the dollar.
In their words, today, the “view of a company’s non-financial performance has become as important as its financial health.” Their priorities now include being a good neighbor.
The triple bottom line of process, people and planet are the company’s non-financial performance measures. And it directly impacts their cost of capital, credit scores, insurance rates, how shareholders vote and how stakeholders engage with them.
“Research has proven that companies with strong ESG performance realize short- and long-term value through enhanced growth, reduced costs, improved stakeholder relationships, increased employee satisfaction and optimization of investment and capital expenditures.”
Their commitment to the triple bottom line is paying off too. AEP was named to the Forbes JUST 100 2021 list, which recognizes companies that set the standard in commitment to their stakeholders while remaining in the upper half of the Fortune 500.
The Future Is Bright
Being good is proven to be good business. The best utilities used the pandemic to reinvent themselves as essential stewards of the communities they serve, paying particular attention to the triple bottom line of process, people and planet. They actively created opportunities to expand past the artificial boundaries of corporate walls and create meaningful engagement within their communities.
Their ability to surprise and delight their neighbors has paid off with enormous dividends of goodwill. And it’s addictive. Personally speaking, I have served the utility industry for more than 25 years, solving truly hard problems around workforce management. But creating solutions that benefit our customers, community and ecosystem equally is something more than work or a career—it is a recipe for a better business and a legacy for a brighter future.
Chris Kelly is CEO and co-founder of Clearion.
