Newtonian Shift Game Helps Power Industry Comprehend Transition
This article originally appeared in POWERmag.
How do you get generating company executives and those who interact with the power industry to think outside the box when planning for the future? The answer may involve a board game.
Humans are pre-programmed to prefer routine, tradition, and regularity, without questioning whether longevity equals good. Fear of the unknown, and the power of habit, contribute to our aversion to change. This is exacerbated by a lack of visibility into the future at both the individual and organizational level. As we read about a transforming energy sector specifically, forecasts convey myriad messages, and there is uncertainty around the concrete impacts that change will have on existing business models. As a result, it is difficult to visualize what a transforming energy landscape means for power generators, how change will manifest, and the rate at which change will occur.
Board Game for Real-World Power Players
The Advanced Energy Centre at Canada’s MaRS Discovery District in Toronto is delivering a new kind of simulation to energy sector players, aiming to address these questions through gamification.
The Newtonian Shift is a full-day, room-sized board game that provides participants with an opportunity to experience multiple years of change in the energy sector first-hand (Figure 1). It highlights factors at play in this transitioning sector, including the impacts of renewables’ declining costs, government commitments to carbon reductions and targets, aging infrastructure, and emerging nontraditional competitors.
Energy leaders in Canada, the United States, Europe, and South America, who represent a diverse set of generation technologies and a variety of policy and regulatory environments, are already engaging in this experience. The target audience is senior-level executives from a variety of organizations, including generators, utilities, system operators, government, regulators, and nonprofits. Three generating companies and 350 participants have played the game under Advanced Energy Centre facilitation in 2016.
Using experiential learning and gamification techniques, this immersive experience provides an opportunity for energy sector players to both physically and mentally remove themselves from their day-to-day roles and experience energy transition from a different perspective. It brings industry reports and trends to life, tests assumptions, and facilitates critical thinking about how individuals and organizations might react to change.
The game approach draws upon findings that many psychologists and change management experts have discussed. As Andrea Simon, a cultural anthropologist and CEO of Simon Associates Management Consultants wrote in a 2013 Forbes piece, “You have to ‘see and feel’ new ways of doing things, not just read about them. Experiential learning is critical. As you learn, your brain actually changes, reflecting new decisions, mind maps, and reality sorting.”
The game, which covers multiple years of energy transition in the fictional country of Newtonia, feels very realistic. From the beginning, players are thrown into a complex environment where they must navigate multiple challenges, conflicting goals, and external pressures. These include increasing energy prices, aging assets, the emergence of nontraditional energy players, and ambitious renewable policies and targets.
The simulation’s chaotic beginning is designed to emulate the ongoing need of businesses to address day-to-day requirements, fight fires, and focus on near-term goals. Naturally, each player within the energy system is focused on the immediate needs required to run a successful business today. At the end of the simulation, participants have consistently noted that a shift from a siloed approach focused on near-term goals to a collaborative approach with a long-term vision is required to be successful (see sidebar). Pursuing partnerships with other sector players toward shared goals is critical to maintaining the core business, whilst pursuing new opportunities and being adaptable to change.
More specifically, participants from generation companies have derived the following insights from their experience with the Newtonian Shift game.
Developing Stronger Partnerships with Customers Is Essential to Meeting Their Changing Needs.
North American households consume almost 2x the amount of energy as typical European households, and 6x that of Latin America or Asia
It is clear that customer needs are changing as new technologies emerge, renewables decline in cost, and customers are faced with greater autonomy and choice. With greater optionality for customers, the value proposition from generation companies and energy providers is eroding. There’s very little incentive for new entrants to collaborate with traditional players. Participants have noted that partnering with customers and new entrants is key to understanding their changing needs, ensuring a resilient business model, and maintaining a relevant value proposition.
Large Organizations Experience Cultural Inertia.
“The game teaches us that we have to start working from a different level of consciousness. Our hierarchical model of command and control does not work if we would like to survive the transition.” —Participant and utility CEO
Though the simulation is designed for a maximum of 30 participants, it provides insights into the constraints large organizations face to be nimble, fail fast, and make decisions quickly. Participants have noted that smaller groups are able to negotiate deals faster and make decisions quicker. Size makes dealing with other challenges—which include planning for an aging workforce, attracting and retaining talent, and developing an innovation culture—more difficult as well. Generators noted that the ability to communicate across silos and departments, and to collaborate both inside and outside the organization, is the key to success.
Dependence on Government and Regulation Can Stifle Innovation.
“I consider myself open-minded and an early adopter of change, but it was very telling that as we played the game, we started falling into a trap—the trap of being conditioned to think within a box. I kept looking for the regulator to step in and help.” —Participant and utility CEO
Participants from generation companies note that as the sector experiences chaos and uncertainty, there is a prevalent tendency to look to government and regulatory bodies for guidance. As traditional assumptions are challenged, the rules of the game—both literally and figuratively—become unclear. There is a lack of clarity around how to make money, reach end goals, and allocate resources. Participants note that, though generators are subject to policy and regulatory constraints, it is important to acknowledge this culture of government-led direction and seek market-based solutions where possible. Leveraging existing capital within the system through partnerships and other mechanisms is critical to enabling innovation.
From Simulation to Activation
[inlinetweet prefix=”” tweeter=”@marsdd” suffix=”#futureofenergy”]Can a board game actually sharpen decision-making in the board room and the executive suite? Yes.[/inlinetweet] A surprising amount of insight can be uncovered when, instead of reading about profound change coming to the sector, key players experience the sector’s transition in a neutral setting. This is what enabled large-scale change at Eneco, the Dutch utility for which this simulation was originally designed. Not only did the organization leverage its experience with the game as the basis for developing new lines of business and a renewed strategic vision, but it also had its employees engage in this exercise to provide the impetus for change across the company.
Eneco has since been named the most sustainable of five major energy companies in the Netherlands and is pursuing new lines of business in a variety of areas, including smart home, solar, storage, smart buildings, and smart mobility. Eneco envisions that each individual will become an energy supplier by 2030. The company’s mission is to have “renewable energy available to us all in the future” and enable individuals to “generate, use, sell or share [energy] with others.” To further this mission, Eneco has invested $520 million in renewables and $112 million in innovation and start-ups.
The Newtonian Shift enables players to experience the transitioning energy sector at an accelerated pace and to explore how they might respond. Participants are then empowered to enable change within their individual roles, departments, and companies at large.