From disruption to innovation: What the utility industry can learn from cable TV

The evolution toward a smarter grid is the most comprehensive

about selling kilowatt hours -- but it's evolving to become more digitized. Maikel Van Verseveld, Chief Executive Officer of Omnetric Group (a joint venture of Siemens and Accenture) likens this to how the cable TV industry evolved over the last 30 years.

"Back in the 1980s, cable companies were the dominant force determining the kind of video content available on TV, how much it cost consumers, and the direction of interaction (one-way)," said Van Verseveld. "But then, technology disrupted the cable industry in a huge way -- digital video recording, the internet, mobile technology and more.

"Cable companies responded. Along with delivering video content they introduced multidirectional communication, apps that provide access to content and services, video on demand and other innovations that met emerging consumer demands."

Most importantly: "The cable companies modernized and diversified their operations. They developed an entirely new business model," said Van Verseveld. "That's crucial -- because when powerful industries get attacked, the target is almost always their business model.

"Today, the big challenge to the traditional utility business model is that consumers are playing an active role in the energy market. They're producing energy and selling it to each other, or to utilities," a process Van Verseveld likens in some ways to market disruption represented by Uber and AirBnB.

Regulators struggle to catch up when disruption occurs on this scale, he noted. But in the long run, regulators eventually tend to find ways to accommodate industry disruption -- since disruption is a source of innovation that serves changing consumer needs and market forces.

What's the most constructive way for utilities to respond to disruptive challenges to their core business? "Utilities should embrace that world is changing and start experimenting for themselves with what it means to become a digital company," Van Verseveld suggested. "It's a learning process. Be willing to experiment, so you can understand the impact of change on your processes and predict emerging demands on your organization. You'll need to be hiring people with different kinds of skills and experience, gain new capabilities, and explore new revenue streams.