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The Wrap #24 | Keeping energy flowing, physically and metaphorically
A shot of thinking fuel, brought to you each month by Futurestate Design Co.
As we say goodbye to the last of the summer wines and head into the winter of dissed content we’ve picked out three pieces of advice, from three articles, for businesses looking to navigate an increasingly unpredictable time ahead.
On this month's agenda is an example of why operating in accordance with your purpose matters most in turbulent times, why some really bold futurestate thinking is needed if we’re going to make the transition to EVs without turning the lights off everywhere else, and the importance of partnerships being able to see and agree on the long road ahead.
Let’s get on with it then.
The Purposeful Octopus
What’s going on?
As the global energy crisis deepens, few in the industry are remaining untouched by widespread criticism. Here in the UK, there is an increasing sense of unease over the scale of emergency measures being put in place, the risk for households and businesses and the lack of flexibility being shown by the companies that are relied on to provide energy, especially to those most in need. You only need to add the backdrop of a warming planet and you’ve got all the ingredients needed for a full-blown crisis for every business involved.
This brings us to Octopus Energy. Seemingly, doing quite well for itself. After becoming the fifth biggest energy supplier in the UK earlier this year they are sitting pretty at the top of Trustpilot’s consumer ratings with a score of 4.8. That’s better than its closest big five rival EDF who sit at 4.2 and substantially better than Eon, Scottish Power and British Gas who sit on scores of 3.5, 3.4 and 3.3 respectively. Remember, these are all companies that offer exactly the same core products (gas and electricity) that consumers largely take for granted, in a highly regulated market.
Why its important
While there is no magic tonic for businesses in the midst of a crisis there are a number of tools that the most resilient (and successful) regularly lean on to navigate the overwhelming pressures they face. Octopus are clearly leveraging the value of a clear purpose.
We’ve long written about the value of a clear purpose being one of the most powerful strategic assets for a company and Octopus has shown us that they are no exception.
Every action Octopus has taken during the energy crisis has been aligned with – and measured against – its purpose. Giving customers the ability to use energy when it’s cheapest or healthiest for the grid, charge their EV’s based on when they are most likely to use it, running trials to explore how customers can engage with energy in new ways or simply helping customers switch from gas to electric. Every scheme or initiative is aligned with their purpose.
While Octopus isn’t the cheapest supplier, it consistently outperforms its major competitors… some of that is down to great operational management, but we believe it’s a great example of why and how a clear purpose can help businesses perform better day-to-day.
You can read more about Octopus Energy's rise to the top on WIRED
Sunset for overnight charging?
What’s going on?
Staying on the energy theme, research has found that the growth in electric car ownership could overwhelm power grids if most drivers continue charging primarily at home overnight. The findings come from computer models analysing EV driver charging behaviours and how they impact peak net electricity demand.
It makes for uncomfortable reading – peak net electricity demand at night may make cheap overnight energy more expensive for consumers because peak demand will shift from washing machines and kettles during the day to EVs (and many other devices) at night. Consumers relying on ‘intelligent’ charging patterns for their EV based on when they are most likely to use it may end up out of pocket. The report does suggest, unsurprisingly, that daytime charging opportunities could help solve the problem and help reduce costs. But no matter how you cut it, energy companies need to adapt.
Why its important
A few months ago, we wrote about Netflix’s in-house content distribution network – Open Connect – and how they realised that they could steal a march on their competitors by taking ownership of this critical network component themselves. They built their own bespoke CDN (content delivery network) to host their content… close to where their users are. Recent economic headwinds aside, this has been a massive part of Netflix’s success to date.
There’s an obvious parallel here. Energy companies need to rethink, away from a traditional centralised system, towards a more adaptable localised infrastructure. It’s not about cables, it’s about what goes down them, how much is available at any given time, and how much it costs to deliver it.
This has the smell of an inflexion point, with the global drive (sorry) to adoption of EVs the factor that could really tip things over. Forward-thinking is needed by the bucketload, lateral thinking even more so. Oh, and whoever’s writing those smart charging algorithms might need to start shipping some firmware upgrades before they switch all the lights off.
Read more about the report on New Scientist
Your virtual GP will see you… never.
What’s going on?
Babylon Health rapidly grew into one of England’s biggest GP practices by taking advantage of structural changes to the NHS that allowed people to register at a doctor’s office outside of the usual catchment area. The remote GP service was able to register thousands of people – almost ten times more patients than the practice it took over from. Unfortunately, it ended up sparking a £22-million shortfall in the budget of the West London health authority where it was ‘based’.
Earlier this month Babylon Health cancelled its last hospital contract with the NHS, eight years early. It’s the sort of dine-and-dash conclusion we are all too familiar with when it comes to the NHS and health tech start-ups. Babylon wouldn’t flex its model enough to work better for the NHS, and the NHS wouldn’t grant it opportunities for greater scale unless it became structurally NHS-friendly. As a result, Babylon has walked away to focus on private and US growth where, of course, everyone pays for their healthcare and margins can be meaty.
Why its important
Public/private partnerships are critical to delivering innovation in public services, as robust ecosystems are for commercial organisations. Babylon walking away from the NHS shows that this type of partnership can be nigh-on impossible to make work if the parties aren’t aligned on a vision and long-term goals from the very start. Babylon’s business model is geared towards growing both its per-customer revenues and its company value, not optimising its service for low-margin public health contracts.
Aside from re-emphasising the point we made last month – that healthcare needs a bigger, bolder futurestate vision – this is a great example of why in any kind of partnership it’s critical to invest the effort needed to build, visualise and align behind a shared vision from the outset. Realising a bold ambition is not about water-tight contracts, it’s about deep alignment on key goals – and nothing is better at making that happen than a vision that everyone can see.
Read WIRED's report on Babylons exit from the NHS here