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This is Marc Gunther, a guest blogger for the day for Schneider. Below is my live blog from the Schneider Influencer Summit, a gathering of company executives, industry analysts, financial analysts and press that was held on Thursday, Sept. 11, at Schneider’s beautiful new Boston One R&D center in Andover, MA. Here are some highlights from the day’s talks focusing on energy management, energy efficiency and sustainability.
A few takeaways from Schneider’s 2014 Influencer Summit
I’m back home in metro Washington, D.C., the place where good ideas come to die, but still feeling uplifted by what I heard the other day at Schneider’s Influencer Summit. I learned as much as you can in a single day about the company, and its people, and its ambitions. Here are a few things that stuck with me:
1. Schneider Electric is a big ($35 billion revenues, 160,000 employees), global (100 countries) and unusually diverse company that makes a lot more than electrical equipment.
I knew that the company had grown but I wasn’t aware of how many acquisitions it had made in the last 15 years: APC, Clipsal, TAC, Xantrex, Areva T&D, Summit Energy, Telvent. It now has powerful software capabilities to go along with its longtime expertise in hardware and so can sell comprehensive energy management and energy efficiency solutions to cities, utilities and hospitals.
This merger of hardware and software reminds me a bit of the media industry, which I used to cover. Many media companies — notably Sony, more recently Comcast — tried to marry hardware, software and networks, but getting them all to work together proved a struggle. I’m not enough of an expert on the infrastructure/utilities/energy/health care/buildings world to know what lies ahead for Schneider, but it’s a safe bet that both the challenges and the opportunities will be large scale. This company will be interesting to watch.
2. Schneider wants to tackle big, important problems.
Innovation is one of the most overused words in business. Most every big company pursues innovation. The question is, to what end?
What I saw at Schneider is innovation with a purpose. If we want to curb climate change and drive economic growth, there’s no better way to do so than to drive energy efficiency throughout the global economy. This is core to Schneider’s mission.
There’s a lot of confusing tech-speak around IT, OT and big data but Schneider’s prescriptions for eliminating waste are at heart pretty simple: replace old infrastructure with new to drive efficiency, marry digital intelligence with physical assets so they can be better utilized, and drive transparency deep into energy and water systems so that users have the incentive to better manage their consumption.
Here’s how Chis Hummel, the company’s chief marketing officer, explained it last week:
We see a world in which these cities are more liveable, more comfortable and more sustainable.
We see factories equipped with intelligent battery systems and UPSs that will unobtrusively curb power to avoid demand charges.
We see air-conditioners that can create a customized environment for everyone, improving comfort and lowering health problems.
Everything we know is going to be rebuilt, and it’s going to be more efficient, clean and intelligent.
In the next age of change, factories will produce more with less.
Buildings and homes will become more safe, secure and efficient.
Less will become more.
Life will get better.
Which leads me to my last takeaway…
3. Schneider is a talent-focused company.
There wasn’t much talk about this at the summit, except for a few jokes about the fact that employees at the new Andover building are offered massages and reiki on the premises. But when I asked Laurent Vernerey, who oversees Schneider’s operations in North America, why the company chose to build in the suburbs, rather than in the city of Boston, he told me that the key reason was the people. The company previously had scientists and engineers working in several offices scattered in suburbs north of Boston, and didn’t want to lose them by moving into the city.
One senior exec at Schneider told me that he spends a good deal of time working with the Green Grid, a nonprofit industry collaborative aimed an improving the resource efficiency of data centers. He’s encouraged to keep at it by his bosses, not just because it’s potentially good for Schneider’s business but because the work matters. The company also encourages work-life balance, making it easy for execs who are required to travel to get home to their families every weekend.
Most important, Schneider wants its people to understand that their work is about more than growing the company’s revenues and profits. As Vernerey put it to me: “They are doing more than their job. They have a sense that they are participating in something bigger.”
It’s a wrap
Laurent Vernerey, the executive vp of Schneider, is back on stage, thanking participants in the company’s 2014 Influencer Summit, as the day wraps up. “You challenged us, and thank you for that,” he told the analysts and NGOs in the room.
Schneider’s day-long conference delivered a nice mix big, abstract, thought-provoking ideas about such topics as smart cities and the merging of IT and operations, as well as a good amount of nitty gritty tech talk (much of which flew over my head, I must confess).
But I’ve come away with a sense that Schneider is company with a lot of pride and purpose. That’s often true with companies that have been around as long as Schneider–some 175 years. That helps a company to think long term, which is one key to embracing sustainability.
A bottom of the pyramid idea from Schneider
Working with the MIT Media Lab, a couple of researchers from Schneider have come up with a neat idea. They’re calling it a “NanoGrid” and it’s essentially a way to distributed small amounts of electricity to people in poor countries who desperately need it. It’s not yet a product, but it could become one.
Essentially, this “NanoGrid” is a box, about the size of a large shoe box, which has an input for electricity and six plugs. It can be linked to a mobile phone network so customers can make tiny payments for enough electricity to charge their phone or a lamp or watch TV for an hour. It’s called “Samabaza Watts” because, in Swahili, sambaza is a word that means share or distribute something for the common good.
One thing that has impressed me about Schneider today is that its R&D and innovation aims to solve problems that matter. It’s developing products and services that will optimize and automate energy usage in buildings, help hospitals manage their costly energy spending, connect smart cities to their citizens–all big ideas. This box is an effort to deal with the problem of “energy poverty,” and it’s easy to imagine a school child in a village that lacks electricity using the box to charge a lamp and do homework at night. The box be powered by solar panels and a battery, in theory, creating opportunities for micro-entrepreneurs.
Contrast this with some of the trivial problems that Silicon Valley is trying to solve. Instant messages that disappear right away? Websites where people share secrets? Whether or not Schneider’s bottom-of-the-pyramid R&D ever pays off–it’s probably a long shot–you have to admire the company for trying.
Why Sustainability Makes $ense
John Hoekstra, Schneider’s director of energy and sustainability services, explained why technology and data will be vital tools for companies that want to lead the way when it comes to sustainability in all its facets–carbon emissions, waste, water, and even social issues like factory conditions in chain impacts.
In particular, Hoekstra talked about Schneider’s work with VF Corp., the big, diversified apparel company whose brands include The North Face and Timberland. VF manages retail stores, factories and a complex and sprawling supply chain. So Schneider created an “enterprise scorecard” that pulls together data from facilities, procurement, supply chain and retail stores, and then worked with the company’s sustainability executives, CFO and CTO to figure out where the efficiency opportunities were greatest.
Should VF Corp. buy LED lights for its stores? Or redesign materials for garments? Or work on water efficiency in its factories? Without a broad array of data from disparate systems, VF would be operating in the dark when making investment-for-sustainability decisions, Hoekstra said.
Interestingly, Schneider also helped develop the Higg Index, a set of goals and measures for the entire apparel industry, for the Sustainable Apparel Coalition, a group of brands and retailers that have come together to make the apparel industry more sustainable. I wrote about those pioneering efforts here but until today, I didn’t know that Schneider had helped the SAC put the Higg Index on the web, where companies and factories can use it. the web-based Higg Index.
My talk at Schneider Influencer Summit 2014
I took a break from blogging here to take the stage at the Schneider summit to talk about why we need to modernize America’s infrastructure. My argument: That if we want to get serious about climate change, modernizing infrastructure is a great place to start. That’s because–unlike clean energy, which we also need–making infrastructure more efficient is a win-win-win. It’s good for the environment, it stimulates economic growth and it improves our quality of life.
This point isn’t as well understood as it should be, partly because environmental groups haven’t been as honest as they could be about the fact that generating electricity from wind or solar power costs more, as a rule, that burning fossil fuels. This creates a drag on economic growth. Efficiency is just the opposite. Once the upfront costs are paid back, operational expenses decline that frees up money for future investment or spending. Thus efficiency is a growth driver.
And the opportunities for efficiencies are huge when it comes to modernizing infrastructure, whether we are talking about the electric grid, smart buildings and roads, water systems, airports and railways, etc.
This was a new idea to me until recently. Pascal Brosset, the chief technology officer of Schneider, is talking about it now–what it means as informational technology and operations technology converge. Schneider products monitor huge and complex factories, the utility grid, water networks, hospitals and the like. “It is potentially revolutionary,” he said, but “our customers don’t like revolutions.” So change won’t happen overnight.
It’s interesting to think about how businesses — as opposed to consumers — adopt new technology. As consumers, we’re quick to embrace new mobile phones or platforms like Facebook or Twitter. Look at how rapidly AirBnB and Uber are growing. Companies are slower to change, in part because they are run by committee (sometimes lots of committees) or invested financially or emotionally in current ways of doing things.
What companies like Schneider hope is that the opportunities for energy or water efficiency, smarter factories and modern infrastructure are so enormous that its customers will find them irresistible–and move faster than they often do.
Todd Isherwood, who leads energy efficiency and alternative energy for the city of Boston, said that a key to Boston’s evolution as a more sustainable city was, among other things, a branding campaign. Rather than taking about energy efficiency, he said, his office–which manages the city’s energy use and its $50 million energy spend–created a campaign called Greenovate Boston. It was that, as much as anything else, that got city employees excited about finding and supporting energy efficiency projects.
Much like a corporate sustainability executive, he had to work with 10 different departments and 10 facilities managers who oversee schools, office building, police and fire facilities, 60,000 street lights and 2,700 gas lamps. “I had to build relationships and partnerships within the city of Boston,” Isherwood said.
The city is now using data collected and analyzed by Schneider on a platform called Resource Advisor to guide its capital spending, as well as to improve daily operations of its facilities, he said.
Efficiency, resiliency and recovery
Laurent Vernerey, who runs Schneider Electric in North America, is on stage now, giving a broad overview of the company’s businesses in the US.
He says Schneider will focus its energy management solutions on key industry sectors: water, health care, utilities, oil and gas, data center and food and beverage. In each sector, he said, software will be a key driver of efficiency. “Software is everywhere,” he said. The goal is to turn “real-time information into intelligent decision-making.”
“Efficiency is now at the core of what we do,” he said, along with its longtime core principles of safety and security.
He put a new twist on those principles of safety and security. Traveling around the US, he said, he’s hearing more and more about disruptive events–big storms, cyber sabotage, even terrorism. Increasingly, he said, customers are concerned about resiliency and recovery from these events. No data center or hospital can afford to be without power for even a few seconds.
Interestingly, Vernerey noted that Schneider is even in the weather forecasting business–they originally provided data to farmers but now, he says, as much as 70 percent of US GDP is in some way dependent on the weather. If climate change brings us more frequent and severe storms, Schneider will help its customers be better prepared to anticipate and recover from them.
Managing an insatiable appetite for energy
Chris Hummel, chief marketing officer at Schneider Electric is on stage now. About 150 or so people are here–industry analysts, financial analysts and press. The theme of this summit is “The Next Age” of business change, which Hummel says will be about managing growing energy demand.
“Our appetite for energy remains insatiable,” Hummel says. The good news is that the mashup of IT, OT (which means operational technology) and energy creates enormous opportunity to increase efficiency and improve reliability.
“Everything we know is going to be rebuilt…Less will be become more…Life will get better,” Hummel says
Intriguing, no? Says Hummel: “Sustainable progress is possible.” I’m eager to hear more.
The Boston One Campus
Good morning! I’ve just arrived at Schneider Electric’s Boston One Campus, in Andover, MA, for the 2014 Influencer Summit–a day of talks and tours on the topic of energy efficiency. It’s a beautiful R&D facility–a LEED silver certified building which will be home to about 750 scientists and engineers, working in 55 labs. This will also serve as Schneider’s North American HQ, and the company expects to bring about 10,000 customers through in the next year.
The plant officially opened yesterday. Massachusettes Gov. Deval Patrick was on hand, along with Schneider’s executive vp for North American operations, Laurent Vernerey, who said: “This is a statement of our commitment to technology and innovation in the USA.” If you’re reading this blog, you probably know that Schneider is a $35 billion global company, headquartered in France–but the US is its biggest market.
Why the Boston area? Simple, explained Vernerey. It’s a great place to recruit technology talent because so many great universities are clustered near here. One more little bit of evidence that education and knowledge are what matter to the US economy.
I am pleased to let you know that this Thursday, Sept. 11, 2014, I will be live blogging from Schneider Electric’s inaugural Influencer Summit, where experts from around the world will convene at the company’s newly unveiled global research and development facility in Andover, Mass. to discuss #TheNextAge of change in our industry.
Right here on the blog, starting at 9 a.m. ET, I will be sharing my thoughts and perspective throughout the day, as more than 100 media, analysts, academics and thought leaders come together to discuss and debate the forces shaping our businesses, cities and the environment.
You can also follow me on Twitter (@MarcGunther) and by using the hashtag #SEinfluence14 or #TheNextAge for updates in real time.
Marc Gunther is a veteran journalist, speaker, and writer with a focus on business and sustainability. Marc currently serves as editor-at-large of Guardian Sustainable Business US and is a contributor at FORTUNE magazine. Marc is the author or co-author of four books, including Faith and Fortune: How Compassionate Capitalism is Transforming American Business and Suck It Up: How capturing carbon from the air can help solve the climate crisis. He lives in Bethesda, MD and can be reached at marc.gunther at gmail.com or on Twitter @MarcGunther