The Great Crew Change - Analytics for the digital generation
This post in the series looks at the technology habits of the emerging millennial workforce, and the resulting challenges and opportunities this presents to analytics in the Energy Industry.
Let us start with the following profile of the next generation of knowledge worker.
Meet Bernardo.
He is 21 years old, born and brought up in Los Angeles, California.
An avid soccer fan and movie buff. With regards to the latter, he especially likes movies from Disney's Pixar Studio, particularly because of the presence of "easter eggs" (hidden references to other Pixar movies) in each of their new releases. Searching for hidden clues appeals to Bernardo's analytic nature.
He will graduate from USC this year with a Bachelor's degree in Applied Mathematics with a minor in Statistics. Much of Bernardo's coursework has focused on building and implementing analytics to solve real life problems requiring statistical analysis. Bernardo's internships reflect his academic and intellectual interests as well. From working for an investment management firm to mine financial data for investment opportunities, to implementing an Optimal Bidding algorithm for an online advertising firm, he has used his mathematics and computing skills to solve problems for his employer. These experiences have also taught him how to "hack" efficiencies in the technology platforms he has used in the field. For example, he has repurposed object-oriented programming concepts in scripting languages like R and Python to accelerate application development.
His other passion is around reducing waste in the commercial food supply chain. He speaks eloquently about bringing the farm to table concept to inner cities through incentivizing the formation of large urban community gardens. These would in turn supply local restaurants. Part of the solution would be providing technology for these micro-distribution networks to connect suppliers with customers efficiently. The point here is that he does not separate technology from the problem he is interested in solving.
Bernardo is a compilation of either recent graduates or technology professionals in their early twenties that I interviewed recently. He represents the middle age in the so-called "Millennial" generation (the definition of millennial varies amongst social scientists, but the general consensus is those born between 1987 and 2000). This generation recently surpassed the Baby Boomer generation in terms of population in the United States, now represents the largest population block (estimated at 92 million) in the United States and makes up the face of tomorrow's knowledge worker.
The Millennials, as a generation, have been probably the most analyzed by Social Scientists, Businesses and Technologists than any other. There is no shortage of data points available in the public domain that allows one to piece together how this all plays out in the technology space for Energy companies. The term "Digital Native" has also been coined to describe this generation. If one thinks about this in the context of the iPhone, which turned six years old this year, the middle part of this generation has grown up with data and app technology at their fingertips. They have not had to adapt to technology in its current form, unlike my generation (Gen X, also called the "Digital Immigrants"). As a result, these Digital Natives are the most avid users of technology and have high expectations of and trust that, technology will easy to access, apply and understand. The Millennials offer very interesting insights into how technology should be designed and consumed. As this series of posts have been looking at analytics in the Energy Supply and Trading, this gives us a preview as to what disruptive technologies could potentially look like.
There is an underlying secular trend that also makes the entrance of a Digital Native into the workforce all the more relevant as a catalyst for more autonomous analytics. Currently, the Energy industry is made up of more of the Baby Boomer generation than the Millennials. And a vast majority will be retiring from the workforce in the next couple of years.
Termed, "The Great Crew Change", this trend will by itself force a transformation in how the industry operates. The following graphic, from Drillinginfo & Forbes, aptly illustrates the talent issues facing the Energy industry.
Consider the confluence of these secular trends; A rising majority of knowledge workers that are Digital Natives, combined with an industry facing a talent shortfall and beset by older generation technologies and reliant on manual intervention and deep process knowledge to gain insight from data. The head of trading or value chain optimization faces a daunting task to recruit candidates such as Bernardo into an organization that often relies on pivot tables to visualize data needed for decision making, where technology and business organizations work on different incentives and sometimes at different speeds. This can lead to one or a combination of the following outcomes:
A war for talent. The industry needs the next generation of "garage entrepreneurs" to identify incremental or seismic step changes in operating efficiencies. As the Forbes article correctly posits, this talent shortage is not a secret in the industry.
In order to attract this talent, the toolsets being used need to go beyond simply solving the different variations of the same problem, but to automate the routine problem solving leaving the knowledge worker free to focus on solving the complex or exceptions.
As mentioned in my very first post, the next generation cannot be separated neatly into functional versus technical resources. They are a hybrid of both and this will condition where they seek opportunities. They will have to be wooed into the energy industry.
As with any dislocation between supply and demand, it is reasonable to expect new market entrants to disrupt the existing toolsets and perhaps even business models.
As the Head of Trading at a global energy firm recently (and very eloquently) remarked:
“We seem to have design and architecture decisions being made in key technology platforms with little to no input from the next generation of user”
This is quite a stunning insight once you let it sink in. No matter what end of the technology table you sit on, whether as a software product manager or a CIO of an Energy (or any company- for that matter) firm, ask yourself:
Could you take one of the key applications being used in your Supply or Trading organization home in the evening and have your teenager or twenty-something figure out how to use it in an hour? If the answer is no, then you will have a view on the upcoming challenges in replacing your workforce in the next 3-5 years.
I recognize that there is an element of hyperbole in this example but, if we agree that energy value chains are closed-loop systems and with a base assumption that one cannot violate the laws of physics and chemistry, then all complexity - low to high - can be modeled with precision. Therefore technology should be able to abstract it and made easy to understand and consume. The goal of technology should be to enable anyone in an organization to become an expert. We have largely become our own navigators, bankers, investment advisors, travel agents, and medical orderlies thanks to technology. We tend to seek experts when we need to solve something more complex (and that is largely because the data is not transparent), where the benefit of experience and contextual analysis is desired. So expectations from workplace technology in the near future are going to be radically different. The decisions around technology platforms of the future should not be outsourced from the business to IT and in turn to a vendor and vice versa.
I hope the reader appreciates the transformative nature of what lays ahead of us as technology evolution and its parallel impact on the next generation of energy workers have to a large extent shaped the future.
And as you all can appreciate, the future waits for no one.