During times of crisis, the time for fresh thinking and business model innovation is ripe, says expert at UCT Graduate School of Business.
As South Africa battles with an electricity crisis, independent power suppliers have offered Eskom some solutions to keep the lights on.
Generator manufacturers and power barge experts (ships that produce electricity) say they have the answers to help the embattled power utility.
One of Eskom’s biggest distributors, City Power in Johannesburg, announced that the firm will implement several projects to help the city move off Eskom’s load shedding schedule and remain switched on when Eskom switches off. These projects range from sewage and water pipe turbines to smart metres and new solar technology.
According to City Power’s managing director, Sicelo Xulu, the city would like to be free from load shedding by June this year at the latest.
“It is fair to say that Eskom is experiencing a crisis at the moment. But in times of crisis, it can be beneficial to shift the organisation’s thinking from problem solving to solution finding,” says associate professor Kosheek Sewchurran, at the University of Cape Town Graduate School of Business (UCT GSB
“These may sound like the same thing, but the thought processes and way of being are different. While one is focused on the problem – fixing something – the other is about opening up the mind to explore new possibilities,” he says.
Sewchurran, who has a background in software engineering, computer science, systems thinking and design thinking, convenes the Business Model Innovation master class at the UCT GSB. The programme aims to help those at the top prepare and capitalise on volatile and uncertain situations in tough economic times.
Sewchurran says times of crises are ideal for business model innovation.
“Many companies are not set up for innovation and growth. Of course it is better to develop fresh thinking mechanisms when your organisation is not in crisis, but if you find yourself in crisis without those mechanisms in place, that is a good time to start,” he says.
Sewchurran also agrees with Stephen J Dubner, author of best-selling book Freakonomics that “crisis is the mother of all innovation”. The best seller is filled with examples of where crisis produced innovation, like during the 1970s oil embargo, Brazil was so concerned about its energy future, the country devoted itself to building a sugar ethanol industry that took off.
“It is likely that Brazil would have continued down the same oil-dependent path as other nations,” Dubner says.
Sewchurran says: “The key raw material for innovation is the experience of disharmony or anomaly that a crisis creates. To make productive use of these experiences however one must have mastery of design thinking, integrative thinking and systems thinking.”
“Business model innovation is a powerful mechanism for establishing a culture of change in a company. By combining theory and practical application, individuals are guided towards coming up with solutions for their business environment. Techniques like generative reasoning, causal modelling, assertive enquiry, design thinking and integrated thinking are used to obtain optimum results,” he says.
According to Sewchurran business model innovation involves reinventing two or more components of a business to deliver value in a new way. In the example of Eskom, he says, there are many problems and challenges compounding the crisis, but the basics remain the same.
“Developing new ways of looking at old problems to create new choices can be one of the most fundamentally powerful techniques any executive can learn.”
“Companies and organisations increasingly find themselves in unchartered waters and it is vital that they become comfortable with this complexity, so that their daily operation is less about crisis management and more about efficient and effective leadership,” he says.