Renewable Energy Lessons From Harvard Business School’s Study on U.S. Competitiveness

On November 15th, Harvard Business School hosted a discussion on ways companies and other stakeholders can boost U.S. competitiveness. It took place at The Henry Ford in Detroit, and the case discussion was about the rise, fall, and rise of the Big Three U.S. automakers. The room was packed with auto industry insiders and other local business leaders. I just listened and took a lot of notes – here are two lessons I learned that we can apply to the renewable energy and building industries. If we do nothing else, these are the things that will make our industry more competitive.:

1. Diversify. Detroit’s fall was dramatic because it’s economy was completely reliant on the auto industry. When the auto industry sputtered, the city was decimated. This is why I love solar PV, solar thermal, geothermal, energy efficiency, wind, hydronics, natural gas, heat pumps, and all of the manufacturers, wholesalers, and dealers that make up the value chain. Arguing that a single technology is better than everything else isn’t just silly, it’s bad for the long-term health of the industry. We want to be an industry of relentless, positive action – to continually move the conversation forward – because a vibrant, resilient industry (or business) is highly diversified.
2. Invest in the ‘Commons’. Think Silicon Valley. In the early days, auto makers gathered in Michigan to share suppliers, talent, and infrastructure. Through the seventies and eighties competition became so acrimonious, and outsourcing so prevalent, that very little sharing was possible. This helped each company execute their deliberate strategies by giving them complete control over their ecosystem – so it helped them meet their quarterly numbers with more certainty. It also killed innovation. I know there’s a lot of brand loyalty in our industry – I see it especially with HVAC and geothermal products. Of course it’s necessary to be competitive with one another, but I worry that sometimes people get entrenched in their battles and write anyone off that works with a competitor. We’ve felt that at HeatSpring at times over the years, and it always seems counter productive – keeping doors and relationships open to outsiders is good business.

What is your time horizon for making decisions about your business? If your plan is to be around for a long time, then this is a call to action. Anybody can do these things in a hundred small ways, and the sum of those actions will define where we are in 50 years.

How do you plan to diversify and invest in the ‘Commons’ in 2013?