The OODA Loop

Observe, Orient, Decide, and Act in rapid succession.

Oh boy, Joel, are you kidding? How can you blog about something like this to OODAyour clients in the energy utility industry? After all, many like to criticize energy utilities for their speed. This is not the electronics, pharmaceuticals, or similar industries.

Perhaps the root problem here is not speed but risk aversion. It seems safer to do nothing than to change and be wrong, even if what we are doing right now is dead wrong. I remember one utility that had the policy that no customer would be promised a new electric service in less than 30 days because that was the amount of time the utility was certain they could achieve. I asked if they could change the policy to be a guarantee of no more than 30 days but the utility would make every effort to beat that date. I made the plea with the obvious benefit that the revenue impacts are better if the meter is set and spinning sooner. The room fell into a cold silence. They simply did not like the increase in risk.

I still remember one management leadership session I ran decades ago where I characterized this and criticized the industry as changing in geologic time frames. To my shock, the ranking executive in the room leaped to his feet and challenged me …

“Mr. Gilbert. I have listened to you for the better part of an hour commenting on our need to listen to our customers and to move quickly to resolve their concerns. I am objecting to your choice of words implying we change in geologic time frames!” … after a seemingly endless pause, he continued … “We don’t move that quickly!”

Obviously, this was a gracious and supportive comment, which I have cherished to this day.

The OODA Loop sounds an awful lot like that old joke about the two guys running from an approaching grizzly bear. The one stops to put on a pair of sneakers while the other asks him why as he keeps running. The answer is of course that the challenge isn’t to outrun the bear but the other person.

The OODA loop was developed by military strategist and USAF Colonel, John Boyd. Boyd applied the concept to the combat operations process, often at the strategic level in military operations. The approach favors agility over raw power in dealing with human opponents in any endeavor. John Boyd put this ethos into practice with his work for the USAF. He was an advocate of maneuverable fighter aircraft, in contrast to the heavy, powerful jet fighters that were prevalent in the 1960s, such as the F-4 Phantom II and General Dynamics F-111. Boyd inspired the Light Weight Fighter Project that produced the successful F-16 Fighting Falcon and F/A-18 Hornet, which are still in use by the United States and several other military powers into the 21st century.

Perhaps then, the key to the future is to focus the organization on OODA. How quickly can you make decisions? How comfortable are you with adjusting your path as new data emerges? Can your organization change its mind without fearing criticism? And, can it truly mobilize and act on the ideas it does decide?

Observe, Orient, Decide, and Act or risk being nullified by others who outmaneuver you. This is the key take-away from the book I recommended in last week’s blog, The Creator’s Code. It’s a must-read for anyone working to innovate in our industry.

 

 

The Right Stuff

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We respect Edison for many of the right reasons. Most of us though do not know the back-story to his inventing the electric light. The driver behind his research was that he got angry with the local gas company for the way they treated him, so he shifted his laboratory’s research priorities to get even. Yep, the gas company was going to cut him off for late payment. Many electric utilities now honor his legacy with his name as a part of theirs. So, maybe it is also time to honor him more widely by following his lead.

Rather than just lament the way things are … do something. Don’t do it by consensus. Do it by letting individuals try ideas, make mistakes, and then learn from them.   But, do it quickly. Learn from what doesn’t work so you can apply it to what can work.

My latest read is a fabulous new book written by Amy Wilkinson on the six essential skills of extraordinary entrepreneurs called The Creator’s Code. If your company wants to adjust to the shifting landscape of regulatory realities, legislative issues, and customer attitudes, this is a must read.

The key is what Amy describes as the OODA loop. I will cover this in my next blog, but the key advice she offers about failing wisely is my point in this article. Edison had the right attitude about failure. Does your company embrace failure this way and encourage trying new ways of solving old problems using the latest discoveries from other industries? Does it reward people for stepping up, sharing their ideas, and trying new approaches better suited to our rapidly changing environment? As Edison points out, you don’t get to the one idea that works perfectly without taking some risks and failing along the way.

 

I really do not like lawyers

There are many professionsRats where one person can eke out a life in a small town. One physician … one car mechanic … one painter, etc. There is one, where that is impossible: one lawyer. The one lawyer would starve to death.

It seems to me that lawyers are trained to argue so they need someone to argue with. Perhaps that is part of the problem in our politics today. We have mostly lawyers as politicians. Maybe we should be voting pastors and rabbis into office. Maybe we should consider more psychologists and teachers. What we don’t need any more of are lawyers.

I am reminded of all this because of an article I read in the Wall Street Journal today where mice were being used to decide the benefits of a time-based diet where eating at certain times of the day was better than eating at others. One of the comments was a question about why humans weren’t used in the study … it certainly seems safe enough to try this on humans. After all, there were no restrictions on calories or even food type. It was only about when you ate during the day.

That reminded me of a similar question asked by some: why don’t they use lawyers for these medical experiments. The justification for using lawyers was based upon three arguments:

  1. There are far too many lawyers in the US,
  2. Researchers are far less likely to form an emotional bond with lawyers, and finally
  3. There are some things even a rat will not do.

Seems reasonable to me.

Big Data – Big Noise

bigdataIt seems like the topic of big data is all the buzz these days. Somehow, the hope is that if you put enough big data in a barrel, stir it all around with some secret statistical sauce, you get magical results. Yeah, right… Dream on!
I have been at this way too many years to put up with such nonsense. Face it. Big data by itself simply results in big noise. If you want to find the gold nuggets buried in that big data, you need noise reduction algorithms and analytics operating on the filtered data.
Right now, I am sitting in a room filled with people talking and with a lot of ambient noise while listening to some beautiful classical music on Pandora … but the reason I can do that is that I am listening to it on Bose noise-canceling headphones. I can tell there are people talking … but I can still hear the clear sounds of the music. The noise has been reduced so much that I can truly enjoy the music.
Therefore, if big data is on your agenda, invest in some good noise reduction technology. Otherwise, you won’t be able to differentiate Beethoven from Bon Jovi. And, you won’t enjoy it either.
We have been experimenting to see what can be extracted from simple utility billing data combined with weather information and run through our analysis engine. The results are staggering. Would you like to know which of your customers are likely to have demand response potential because they keep their homes in winter at a toasty 72°F and which ones hold a chilly 70°F in the summer? How about which have gas water heating, and which are using far more or far less energy than engineering estimates would predict? Those criteria would identify the best targets for energy efficiency programs, demand response offerings, or sales prospects.
We are currently researching the possibilities with one of our utility clients and will be sharing the results on an Apogee Institute Webinar on March 25th at 2PM Eastern. Technology is advancing at warp speed and what was impossible just a year ago is now at our fingertips. We can deliver prospects with laser beam focus as opposed to expensively broadcasting an offer to the masses.
The combination of the best noise reduction and analytics can take big data to a big financial payoff in your world. Join us on the Webinar by signing up on our website: www.apogee.net  Seating is limited register today.

Moving from Anecdotes to Analytics

analyticsHave you noticed how many conversations you have each day that are based upon anecdotes? It probably started with “how did you sleep last night?” Today’s fitness monitors are changing all that. You can now see your sleep pattern, how quickly you fall asleep, how deep your sleep is, etc. Sure, the engineers on this blog will say that the analytics are not precise, but they are certainly a lot more precise than the anecdotes they are replacing.

The energy industry is facing a similar transition. It is moving way past segmentation and personas (which are even less personal than anecdotes) to personalized messaging methods. But, the next big wave will be the transition to business analytics platforms. Here are just a few examples:

Home Performance Analytics – Consider not just the age and size of the home, but the actual operating energy performance. How would you like to know which homes are the most efficient and the least efficient without talking to the customer at all? While it is obvious from the electric bills which homes have gas heat, why not pick out the homes that are using space heaters as well? Why not pick out homes that have significant air distribution losses. Spot those old heat pumps before they fail and help customers see the benefits of replacing them with new ones while also finding customers running space heaters and show them the benefits of the new through-the-wall high-efficiency heat pumps?

Home Behavior Analytics – We have proven we can now identify how homeowners are setting their thermostats just from the same billing histories we have always used in the past! Yes, you read that correctly. So, perhaps you might like to target customers who are holding cool temperatures for your demand response program for this next summer. Use your creative side to think of all the ways this might help you target customers for all types of programs and services. In addition, our math lets you compare each and every home to itself in the past … M&V on a home-by-home basis.

Home Progress Reports – Offer all your customers year-on-year and even month-to-month progress reports showing them how their energy use is really changing. Otherwise, customers get fooled into thinking that their savings efforts are in vain when their improvements are blunted by colder than normal winters and then hotter than normal summers.

It is time to replace the stories about how energy is used in the home with real, reliable analytics. Give us a call to see how we can make this a reality in your company.

678-684-6801 or info@apogee.net