Blessings of an Aging Workforce

This post is opposite to what most people would say in the power industry. Aging workforce is a problem. A big problem in the industry. Knowledge is retiring and there aren´t enough younger replacements to take their positions. In most utilities, engineers and technicians are retiring just to get hired back as freelance consultants. Some utilities are responding more than the others. Companies like TVA have done some remarkable efforts. There are several organizations that have made ¨aging workforce” a buzz word. I take an alternate view on this issues. I do want to caution readers that I am in no way diminishing the seriousness of this problem in saying what I am going to say.

Aging workforce resulting in retiring may have a silver lining. In a Schumpeterish way, this may be utilities and power industryś moment (or period) of ¨creative destruction¨. It is no longer a secret that the electric grid is running on old infrastructure that needs to be retired and replaced by new; and more importantly, a mindset that is averse to ¨letś do business as usual¨ mindset. And there are good reasons for doing so. ¨Letś not fix if ain´t broke¨, ¨Show me the money,¨ ¨where is the ROI,¨ ¨lets not use technology just for technology's sake,¨ ¨I am not going first,¨ etc. are just some of what one hears whenever there is a talk about new upgrades let alone implementing a new technology. And all of them are right. They are justified or called for justification. End result, we have been successful in maintaining a 40 year old system with 40 year old procedures and according to most people in the industry taken the power grid to its Gladwellś Tipping Point of disaster. Ask any CEO of a utility – that is his nightmare.

Amidst all these push and pull, it is clear to everyone that more than ¨technology is available¨ and the ¨finances that are expected¨, it is about the people sitting in decision making positions. Hardly anyone seems to be really bothered why there has not been much of a change for the better. Why has it lagged behind? Why has innovation been so slow? Why are we so tunneled into ROI mindset? Personally, my train of such questions has led to me just one thing - people in the industry. Their willingness and drive to try out new things, of innovation, and creativity - I mean, lack there of all these. Like the HBS MBA students in McAfeeś class, some may argue it is all about the incentives. No incentives for innovation – why innovate? I would add – it is not just about not getting supported for doing something new and bringing into market – it also about not being punished (getting sued or butchered by the press) severely for doing so if it fails. Finally, it all comes back to one thing - people. Why kids take or don´t take up power engineering majors in colleges? What sort talent the industry hires? How are performance reviews done? How is performance measured? Do seniors help juniors grow? Does one get a rewarding career?

Currently, utilities and power companies, albeit their pervasive and ubiquitous presence in the market place cannot boast of a workforce that is looked upon as innovators. It is in fact quite the opposite. They are those who worship status quo. In this world, to get somebody to agree on something new to happen is almost challenging the impossible. This is in quite contrast to 25-30 years back when lots of cool products spun off from utilities. From basic numerical methods, sparse matrix algebra, optimization algorithms, compex control and automation systems, and large scale computation. So, when aged people are gone and new people come in, I view this as an opportunity. An opporutnity to creep in new ideas. To leverage the benefits of IT, communications, and collaboration. To actually see and implement IT to capture knowledge and easily retrieve when needed.

The power grid is a perfect example how as individuals we can exist in ourselves and yet exchange power whether we are in surplus or in deficit. Such sharing not only works in the physical network but also in our social networks. This needs a level of openess where using IT can be a core. We can certainly bring in rapid changes and innovation leading to new host of services. New avenues for better collaboration and information sharing among entities that fulfills some of the requisites to improved reliability and performance of an interconnected system.

To move into this new paradigm we will need everything. Making a ROI case for IT is not easy on its own merit. But instead of using it is as only way to justify improvement we can just take a chance. Imagine if the intial venture capitalist tried to value Google using ROI. In a nutshell, a change in mindset and attitude is required before anything can happen. And for that aging workforce may not be all that bad by adiosing the old and ringing in the new.