BUS705 Innovation and Management Report: Energy Australia's Challenge

This report focuses on Energy Australia's sustainability challenges, specifically the transition to clean energy sources. It utilizes a 13-step strategic innovation model to analyze the company's current approach, identify key issues, and propose actionable solutions. The report begins with an overview of E...Read More

Running head: INNOVATION AND MANAGEMENT
INNOVATION AND MANAGEMENT
Name of the Student
Name of the University
Author Note

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Table of Contents
Introduction......................................................................................................................................2
Company Outline and innovation challenge....................................................................................3
13 step Strategic innovation model..................................................................................................4
Step 1: Checking Now Before How............................................................................................4
Step 2: Conventional Approach to Strategic Innovation.............................................................5
Step 3: Basic Processes of Strategic Innovation..........................................................................5
• Visualising Strategy..............................................................................................................5
• Strategic focus and Problem-solving....................................................................................5
• Generating Ideas...................................................................................................................6
• Evaluating Ideas....................................................................................................................6
• Implementation.....................................................................................................................7
Step 4: Innovation Action Plan....................................................................................................7
Step 5: Reviewing the Business...................................................................................................7
Step 6: Reviewing the Market.....................................................................................................8
Step 7: Reviewing the Market Offering.......................................................................................8
Step 8: Creating Customer Perceived Value...............................................................................8
Step 9: Implementation: Characteristics of Strategically Innovative Companies.......................9
Step10: Purpose of Strategic Innovation.....................................................................................9
Step11: Transformation through Strategic Innovation..............................................................10

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Step 12: Holistic Approach to Strategic Innovation Management............................................10
Step 13: Key Issues of Intent.....................................................................................................10
Conclusion.....................................................................................................................................11
Bibliography..................................................................................................................................12

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Introduction
The study is focused towards the identification of a significant challenge concerning
sustainability functions that require innovative strategies to be formed. Subsequently, the focus
of the study is to provide a comprehensive and systematic solution to this identified sustainability
issue. The company selected for the study is Energy Australia. It is an energy producing and
supplying company that normally engages in the production and distribution of electricity and
gas supplies to various areas across Australia. Innovation becomes important for any
organization that operates in the present global corporate environment. It helps to tackle many of
the critical challenges that may be present in the rapidly changing business and world
environment. Businesses need to be adaptive in the present times. It helps businesses to grow and
develop into sustainable enterprises with high degree of functional efficiency. An innovation
model is required to create a smooth developmental path for organizations. The model focuses
on effectively tackling all the major challenges and obstacles that may arise for any given
organization. Hence, the focus of the study is to provide a comprehensive frameworks through
which the critical sustainability challenges of the given organization can be effectively tackled. A
13 step model of strategic innovation is being used to help in the process of forming effective
strategies. Some of the most important aspects to be considered for the formation of effective
strategies are innovation action plans, leadership requirements and implementation of innovative
measures. The challenge is outlined in the context of the selected organization. The model is
utilized to provide a detailed and effective analysis of the subject.

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Company Outline and innovation challenge
The company being selected for the study is Energy Australia. It is an energy providing
company based in Australia focused mainly towards providing electricity and gas services to
their customers sourced only from eco-friendly methods. Energy Australia was founded in 1995
and is headquartered in Melbourne in Victoria (EnergyAustralia 2019). Some of the most
important products and services of the company are electricity, natural gas and solar powered
batteries. They are owned by the CLP Group of Hong Kong. The company focuses on providing
simple and more affordable energy. Energy Australia currently serve more than 1.7 million
customers in the country. The organization has around 2500 employees that work for them.
Along with energy generation, the company is connected with retail services that include a wide
range of products. The operations of the company are concerned with three main areas. These are
energy business, customer focus and enterprise delivery. The company is currently focusing on
providing all its customers with clean energy solutions. However, the organization considers this
as one of its biggest challenges (EnergyAustralia 2019).
The important challenge for Energy Australia that has been identified is concerned with
the utilization of clean energy. The company is trying to provide with all its customers with
affordable clean energy. However, in order to ensure the same the organization has to make use
of sustainable energy sources effectively. Moreover, an efficient distribution framework would
need to be formed. In order to achieve this the organization would require to optimize its current
procurement and distribution network. The effective and sustainable procurement of energy from
sources such as thermal-coal, gas, hydro-electric, solar and wind is the main challenge. Since,
thermal-energy and natural gas are currently sourced from non-renewable areas, the challenge is
to cater to the energy demand through only the utilization of renewable energy. The 13 step

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process can be utilized effectively towards providing a framework that can help in the entire
process.
13 step Strategic innovation model
Strategic innovation is not a direct process but a systematically progressing effective
framework that takes into consideration the various factors that affect the identified problem. The
13 step model that is being utilized for tackling the challenge can be broadly divided into few
important areas. The first stage is concerned with preparing for the innovation by cultivating the
right mindset. The second stage is forming the innovation and action plan. The third stage is the
implementation of innovation. The fourth stage is the reflection on the entire process that has
taken place. The systematic process actually helps to form a more holistic idea of the entire
challenge towards developing a positive framework.
Step 1: Checking Now Before How
The important factor is to understand the environment where the organization is
operating. In this process there are three crucial areas that are identified. They are management
expertise and enterprise, product and services being offered and the speed of delivery for the
innovative products to be sent to the market. In the context of Energy Australia the innovative
product that is to be provided to the market is clean energy sourced from sustainable sources.
Energy Australia has garnered significant expertise in the energy industry of Australia. The focus
of the organization is to use this to gain long term value in providing sustainable services. The
speed of delivery is an important factor as the energy sourced from the clean energy sources have
to be effectively and efficiently sourced to the people. In order to provide an effective energy

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solution to the consumers, the organization would have to focus on creating a strong delivery
framework.
Step 2: Conventional Approach to Strategic Innovation
The conventional approach to strategic innovation can be essentially broken into content,
process and tools. Applying the previous learning from the first step content can be considered to
be market offerings, process can be considered as the speed of commercialization and tools as
the expertise of the organization. The management expertise of Energy Australia is in producing
energy. The parent body of the company CLP already has strict principles on sustainability. The
company has been effective in providing energy to the consumers at a fast pace. The company
has a strong network of electricity power lines and gas pipelines through which it can effectively
provide energy to the various households. Time is an important factor in the energy industry. The
industry depends on how much time it can take for the procurement and effective distribution of
energy. Space is important as it defines the areas of procurement and mass is important as a lot
of energy is required to be transferred.
Step 3: Basic Processes of Strategic Innovation
• Visualising Strategy
The vision of Energy Australia is to provide completely clean and renewable energy to the
people that it serves. 100% carbon neutral electricity at lower costs is the essential vision of the
organization. This needs to be communicated through advertisements and promotions. Internally,
communication mediums like emails, flyers, etc. Incremental innovation is required rather than
radical as a large framework needs to be optimized for the goal.

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• Strategic focus and Problem-solving
The strategic focus should be towards reducing gradually the usage of coal-thermal and
petroleum power. Natural gas for example can also be sourced from bio-degradable organic
wastage. However, this is the larger part of the goals and specific teams need to be formed that
can be vested with specific goal oriented tasks. The size of the problem is relatively large as the
entire section of the business that takes places with non-renewable energy sources need to be
shifted to renewable energy sources. The context is the provision of cleaner energy solutions to
the consumers in Australia.
• Generating Ideas
The general idea is to create two separate teams. One will look after the transition of the
electricity consumers and the other would look forward to the transition of the gas customers.
The entire plan would be met out in phases as it becomes difficult to implement the plan in a
single go. Hence, first the clean energy sources would be utilized to provide electricity to the
growing number of customers. Secondly, the gas utility would be provided to the customers with
the help of cleaner energy. The main priority is the electricity as the provision of natural gas
sourced from clean sources might not be easily implementable.
• Evaluating Ideas
Scoping- the clean energy sources like wind power, hydroelectric power, solar and geo-thermal
power would be selected. Natural gas supplements like bio-compost gas procurement
mechanisms would be tested.
Building business case- Clean 100% carbon free energy would be projected to the consumers

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Development- Only renewable resource based electricity would be developed. Natural gas
sourced from cleaner energy sources would be created.
Testing and validation- The testing would be done across some of the organizations that would
volunteer for the experimentation process.
Launch- After successful testing and validation, the clean utility would be launched in various
phases.
• Implementation
The barriers to change are the location of the consumers, the cost associated and the awareness
among people. It might be more expensive to provide the services to locations that are far away.
Step 4: Innovation Action Plan
The business is good as it would help to provide cleaner energy and create sustainable value at
the same time. The market is basically the households and the businesses across various
Australian cities and sub-urban areas. The offerings in the market are mostly electricity
generated from hydropower and gas is mostly sourced from imported petroleum resources. The
customer value would be cleaner and more efficient energy. The cleaner energy would be
compatible with the homes and electric circuits.
Step 5: Reviewing the Business
The business is more focused towards providing consumers with energy sources that are
both clean and cheap. The organization wants to clear the misconception of expensive renewable
energy rather than provide different products than the competitors. The approach would be
product centric as it the end product that matters most. The current assets are sufficient to control

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the greater part of the implementation plan. However, more windmills, solar power station and
hydropower stations would need to be built along with some effective energy storage spaces.
Step 6: Reviewing the Market
Consumers want efficient energy at lower costs. Currently hydro-electricity accounts for
60% of the renewable energy produced. However, in itself renewable energy only accounts for
around 14%. Around 83% energy is sourced from fossil fuels which includes electricity and gas
(energy and Australia 2019). As they are non-renewable, electricity prices keep on increasing
with time. The needs for cheaper energy by a large number of especially lower-income and
lower-middle income groups are being met. Other larger organizations are not having any
specific products for this customer segment.
Step 7: Reviewing the Market Offering
The most unique core competencies are the wind power and solar power stations. The
competitors do not have the same amount of expertise in these areas. The customers are trying to
shift to more reliable renewable sources of energy that can improve the ecological balance of the
world. The non-customers are the large corporations that run manufacturing units that require
high amount of energy which is difficult to the provided through renewable energy sources.
Energy Australia would like to involve the public through sponsoring various environmental
awareness events. The company wants to evoke concern among the public about the current
environmental situation. The excess customer demands can be met through ocean current
harvesting or geo thermal energy.
Step 8: Creating Customer Perceived Value

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Improving the customer perceived value is a priority for selling the services. The CPV in
this case would be the important shift from costlier energy alternatives to cheaper energy
resources. In accordance with the buyer experience cycle the company would provide the cleaner
energy for purchase. The delivery would be done through waste reducing energy lines at the
same rate as conventional energy. The supplements in this case would be the energy efficient and
energy saving electric devices. There is no need for extra maintenance as the services would be
at par with the conventional energy sources. There is zero to low disposal the energy services
would be waste proof.
Step 9: Implementation: Characteristics of Strategically Innovative Companies
There is a culture of cooperation and communication in the organization which would
help to make the implementation process more effective. The decision making functions at the
Energy Australia are effective and efficient with collaborative support. The innovation processes
are made faster by the actual innovative framework of the organization. The process would be
fast as the various implementation phases would commence immediately after the successful
testing and validation. There would be people in the project that are highly qualified in the field
of energy resource utilization. Experts with previous experiences in energy resource
organizations would be selected.
Step10: Purpose of Strategic Innovation
The purpose is to create an effective framework for providing energy solutions across
households and enterprises that are sourced from non-renewable energy sources. The further aim
is to provide cleaner energy solutions involving both electricity and gas to a large number of
customers across Australia. The organization is capable of harnessing much more solar and wind

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power and also has geo-thermal units that can help in the purpose. The company collaborates
with Greenpower, an organization that engages in green energy research (EnergyAustralia 2019).
Step11: Transformation through Strategic Innovation
The enterprise can transform itself by giving employees more opportunities to speak up
about their innovative thinking. Innovation needs to be integrated in order to align the entire
workforce with the developmental plans of the organization. The company would need to
facilitate the integration of free thinking individuals.
Step 12: Holistic Approach to Strategic Innovation Management
The leadership at all the essential levels of the organization would be focused towards
providing effective services to the customers. All the teams would be aligned in regards to their
relationships with the other teams to provide energy to the consumers. The teams responsible
with research and development will communicate effectively with the teams associated with
harnessing energy and so forth all the departments would be properly aligned. Group meetings
and departmental meetings would be held to discuss progress periodically.
Step 13: Key Issues of Intent
The vision is to provide 50% of the customer base with renewable energy. In 10 years’
time 100% of the customer base is to be provided with clean renewable energy. At the same time
at least 50% of the customers would be provided would cleaner natural gas substitutes. The
company aspires to propagate and build effective framework for the procurement and cheap
distribution of renewable energy. The strategy of the organization would be to clearly navigate
through the various milestones that are needed to be achieved.

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Conclusion
In conclusion it can be said that the entire process can help Energy Australia to create a
stronger network for providing consumers with sustainable energy solutions. Some of the
limitations that were identified were in regards to the lower scope for the provision of efficient
gas services. The organization should hence focus on providing the cleaner electricity solutions
to the customers and then concentrate on better research on the provision of cleaner gas utility. It
is important to understand that the customers would need to be made aware of the changing
environmental situation across the world. In essence, the sustainable development of efficient
renewable energy sources can be the only way to reduce and ultimately stop the utilization of
those natural resources for energy that are fast depleting across the world.

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