Resource Revolution: How to Capture the Biggest Business Opportunity in a Century by Stefan Heck & Matt Rogers & Paul Carroll

Author:Stefan Heck & Matt Rogers & Paul Carroll [Heck, Stefan]
Language: eng
Format: azw3
Publisher: New Harvest
Published: 2014-04-01T04:00:00+00:00

BUSINESS MODELS FOR THE FUTURE

As companies work through complex integration issues, they will also have to be open to experimentation with their underlying business models. For instance, as more solar power is generated from the rooftops of homes and offices, utilities will need to be both big buyers and big sellers of power. The enormous costs of maintaining the grid will have to be distributed over significantly fewer kilowatt hours of use. Utilities will need to charge for backup capacity rather than kilowatts

Business models will, in general, require careful attention during the resource revolution. The core of the problem is one very similar to the innovator’s dilemma described by Harvard professor Clayton Christensen. A company at the top of its game has accumulated a number of rules of thumb—implicit assumptions and beliefs about what has been central to its success. New technologies and business models belie or change some of those assumptions, but they only seem sensible if the management team can become aware of those implicit assumptions and mind-sets and suspend them for a moment to contemplate the change. It’s very hard to do that with the inherited wisdom, experience, and lore of a company. This is why the failures of incumbents to capture the benefits of disruptive innovations are a result not of bad managers, but of good managers practicing what they have done best. Incremental innovations can quickly be scaled and incorporated. Disruptive innovations require changes in customer sets, business models, or performance metrics that are no longer consistent with what led to success in the past.

The issues in the resource revolution will be even more complex than those Christensen has described. His examples concern changes within one industry—for instance, the electric arc furnace and mini mills displacing the classic Linz-Donawitz steelmaking process. In the resource revolution, the landscape is much broader. Consumer electronics can disrupt the automotive market, for instance, by sparking innovations in batteries that could make electric vehicles a huge market. Cars might then disrupt utilities by becoming distributed storage throughout the grid—homes could run off cars directly or use batteries removed from cars, and download electricity at cheap rates overnight.

Silver Spring Networks, the leading provider of the sensors and software that make a smart grid possible, shows the kind of new business model that service providers will be able to deploy on top of the transformed electric grid. Service opportunities will be everywhere. The founders of Silver Spring Networks actually got their idea from supermarkets. While working on a supermarket project at Procter & Gamble, Eric Dresselhuys realized something fundamental about the bar code scanners at checkout lines. An intensive study showed that the scanners did not increase the accuracy or efficiency of the checkout process but were most helpful in the supply chain. The bar-code scanner readings enabled retailers to more accurately gauge customer demand and forecast and react to changes.

Dresselhuys applied this same logic to the grid. Silver Spring meters do not provide more accurate readings of individual electricity usage, but rather of the entire grid system.

Download

Copyright Disclaimer:
This site does not store any files on its server. We only index and link to content provided by other sites. Please contact the content providers to delete copyright contents if any and email us, we'll remove relevant links or contents immediately.