One day on disruptive business models and another on innovation culture and entrepreneurial spirit. This was the programme in Rome for the Innovation Roundtable, a network that links up over 150 multinationals in order to share innovative best practice. Thanks to Enel, from 23 to 24 May it was hosted for the first time in Italy.
The event was held at the Sheraton Parco de’ Medici hotel, where our Group also made two contributions to the programme. Francesco Venturini, CEO of Enel X, gave the opening talk about the changes that our new division, which handles the introduction of hi-tech into the energy industry, seeks to bring about in the sector. On the second day Ernesto Ciorra, Chief Innovability Officer for Enel, began proceedings with a presentation on innovation culture. Enel’s business model, which combines innovation and sustainability and has made our Group world leader in renewable energy production, is also a benchmark for the Innovation Roundtable.
The challenges presented by the energy market
Four trends can now be identified in the energy sector, and they are bringing about profound transformations in the market: decarbonisation, electrification, digitalisation and an increasing focus on consumer needs.
Venturini sees renewable energy as one of the most important disruptive factors, and forecasts on its use by Bloomberg New Energy Finance make this clear. By 2040 penetration by renewables will rise to 60%, and electricity will become the most important source of growth in energy consumption (38% of the total). Investment in digital electric infrastructure also seems impressive: on a global level, the period 2014-2016 saw an increase of 45%. In order to respond to the new requirements generated by sustainable development, Enel X has also launched four global product lines for companies (e-Industries), cities (e-City), the home (e-Home) and mobility (e-Mobility). This makes it possible to meet the “customer experience” challenge (89% of companies expect to compete on this basis according to research by Gartner), attract the right talent (81% of millennials consider state-of-the-art technology important for creating the ideal job) and react to market transformations using the right instruments. The convergence between products and services makes it necessary to develop a new business model where asset owners, service suppliers and technology creators operate in networks to create profit.
“We must be ready to change quickly and often, because digitalisation introduces unpredictable innovation factors. To plug the skills gaps we have to adopt new business models, collaborating with the startups while creating the right conditions for attracting new talent”
Francesco Venturini, CEO of Enel X
Business sustainability for a better world
Innovation depends more on people and their dreams than on technology alone. To provide inspiration Enel intends to provide access to electricity for all. In actual fact we have made a formal commitment to the seventh of the UN’s Agenda 2030 17 Sustainable Development Goals (SDGs): access to “affordable and clean energy” (SDG7). This is together with the implementation of measures promoting “climate action” (SDG13), “decent work and economic growth” (SDG8) and “quality education” (SGD4). As our Chief Innovability Officer, Ernesto Ciorra, explained, nowadays innovation is impossible without sustainability, but it is impossible to achieve sustainability without innovation. Only by acknowledging this relationship is it possible to create value and bring about improvements in society. For Enel, Crowdsourcing, Innovation Hubs and Innovation Communities are development resources that can take us beyond traditional business models because they place people at the centre of things. As well as partnerships with startups, companies, universities and research centres, the list of effective initiatives includes the Enel Innovation World Cup. This is a competition that our Group holds in order to stimulate employees in all countries to transform their ideas into projects to be launched onto the market, while the My Best Failure platform encourages staff to learn quickly from their mistakes. Diversifying innovation instruments has enabled our Group to overcome challenges that seemed impossible. Examples include the Stillwater plant in the USA, which combines technology based on geothermal, thermodynamic solar and photovoltaic energy on the same site, and Cerro Pabellón in Chile, South America’s first geothermal plant, which operates at 4,500 metres above sea level. Enel has also changed the conventional perception of electric cars, transforming them into batteries that can stabilise the grid through bidirectional charging on V2G technology. Changing your point of view is the first step towards innovation.
“Innovability is the term we use to describe Enel’s business model, linking innovation to sustainability. Our new technological solutions help improve the planet, because they are based on the 17 Sustainable Development Goals of the UN’s Agenda 2030”
Ernesto Ciorra, Chief Innovability Officer at Enel
In a series of presentations and group activities, the Rome event enabled company managers and university professors to share their ideas for finding new development models. As Axel Rosenø, founder and CEO of Innovation Roundtable, explained, the speakers involved did not simply offer inspiring contributions, they also guided participants into putting methods and individual knowledge into practice.
Stephan Altmann, Senior Manager in Strategic Innovation Management for BASF and professor of Engineering & Management at the Mannheim University of Applied Sciences, showed how a competitive value chain can be transformed into a collaborative business network. Five elements should be taken into consideration – a systematic design of future growth options can easily be achieved through a strategic portfolio; understanding how innovation occurs today must precede the development of future innovations; tomorrow’s innovation will no longer be based mainly on a company’s individual excellence or from a point of view of dominance; the spirit of innovation depends on integrating the client and the collaboration of partners; the ability to develop new competitive business models will become a key factor in creating new value.
“We’re grateful to Enel for hosting the Innovation Roundtable for the first time in Italy. It’s one of the benchmark countries for innovation, drawing energy and inspiration from the opportunity to expand its horizons. Since 2008 our network has helped make it possible to share ideas and best practice, involving over 4,000 innovation managers every year”
Axel Rosenø, founder and CEO of Innovation Roundtable
Sebastian Budischin, Head of Corporate Business Model Innovation for Bosch, explained the best ways to identify innovative projects. As well as selection based on experience and strategic suitability, repeated self-selection according to market responses can also be effective. So can an assessment which, on defined criteria, helps improve the positioning obtained by a project. These measures help large companies to protect themselves from startup failures. Startups are one of the major channels for innovation, but they are also exposed to high risks. Clients don’t always pay, poor products and services have low take-up, the wrong moment may be chosen for launch, and sometimes the team make-up or the qualifications of its members may not be suitable. As a result, acceleration programmes are crucial in spotting errors or inefficiencies as soon as possible, because the gains made on the market – when there is as yet no competition – are proportional to the speed the most innovative product or service is identified.
For Reza Moussavian, Head of HR Digital and the Innovation Department at Deutsche Telekom, an innovation lab at the service of human resources could be the ideal space to develop a new approach combining design thinking, prototyping, Most Valuable Player and agile development. Within Deutsche Telekom, in fact, the presence of a lab like this has made it possible to support over 400 projects. This has led to a clearer understanding of the effects of the digital transformation on business, in addition to promoting the spread of skills and methods among its staff. A digital learning platform called Magenta MOOC (Massive Open Online Course) has also made it possible to use software to simulate human behaviour through AI (chatbots), identifying new question/answer modes.
Looking beyond the methods
Many other contributions helped shape the content of the Innovation Roundtable in Rome, and they were all based on defining a new model as a fundamental step towards opening new paths for innovation. Taking part in this way were the IESE Business School of the University of Navarra, Stockholm’s KTH Royal Institute of Technology and the Aalto University & Hanken School of Economics of Helsinki.
Researching processes using an operational model that develops by seeking the areas where theory and practice overlap is a process our culture evolved centuries ago, but it is now being called into question in its turn. Digitalisation is also revolutionising our thought paradigms, which regard the mechanistic cause and effect principle as a foundation of the heuristic (i.e. self-learning) method. In future, innovation will no longer have a definite centre or single direction, but it will be the product of interconnection and sharing. This more closely resembles the plant world than animal individuality, a concept expressed by Christoph Zott, professor of Entrepreneurship at the IESE Business School, under the slogan “Think Forest, not Trees.”
An innovative “green” attitude for a totally sustainable world. A world of renewable energy, circular development and Open Innovability - an Enel world, in actual fact!