The Green Context
For those with a passion for green energy and technology, COVID-19 has been a sea of contradictions. Early lockdowns brought positive news about reduced emissions, potentially a drop of 8% on 2019 and air quality was improved with gases such as nitrous oxide down by around 40% - it felt that people had reconnected with nature and that environmentalism was winning hearts and minds. In contrast there was a clear knock to the deployment of new utility scale renewable energy, with projects delayed or postponed.
The increased awareness of sustainability issues has made green projects of all stripes more desirable for investors, however, two key trends from societies response to COVID point the way forward for start-ups. The first is that energy use will increase largely driven by tech usage and the second is the increase in decentralisation as “work from home” and out of city centre working has become the new normal. These trends should be of significant interest to the start-up community, the first trend will drive demand for more efficient technology (and more energy generally), an innovation sweet spot of start-ups. The second trend also favours firms able to deploy technology that is more local in character: off grid, thin film solutions, better energy storage options etc are likely to help enable residential based workers to offset rising energy costs or meet their power needs in a way that utility scale schemes may struggle to do. Firms that have planned their energy needs around offices will now need to think about how they meet their renewable energy commitment when their staff are working from home. In essence the crisis has created a problem that start-ups are better placed to answer than large centralised and established players can.
A Question of Framing
Beyond the green context there is a wider issue about how challenges are framed. Every business generation faces its own unique challenge. The 20th Century can be characterised as a war for quality, with kaizen and total quality management providing solutions. Now consumers can take quality for granted and expect it as standard. Our current century has time and time again shown that the challenge now is for flexibility. Successful firms demonstrate resilience and the ability to adapt. A recent McKinsey report suggested that the best response to COVID-19 was a firm’s ability to pivot and adapt – in fact, the very characteristics that were already required to be a successful firm in the modern economy. As green start-ups, if you are focused on satisfying niche markets in green energy and technology you are probably already doing this.
No Time for Complacency…
Whilst start-ups can revel in their agility at a time of crisis, they do have one principal challenge to overcome, namely workforce agility. The wider labour market goes through periods where specialists have the ascendancy and other times when generalists thrive. Innovation tends to reward specialists, but to be truly agile and able to exploit opportunities, start-ups need to encourage their teams to either expand their skill sets or make strategic hires that will enable them to be more flexible. This may require a change in hiring methodologies, whether using a competency-based hiring system, to ascertain wider skills, or utilising assessments (such as psychometrics) to identify new hires willingness to learn new skills.
Good entrepreneurs will need to focus more on the future potential of their hires rather than on their short-term needs that triggered the hiring process in the first place.
This blog began with an opening question: has COVID-19 really changed what it means to be a successful green start up? The answer is probably, no it has not. It has however perhaps intensified the need for start-ups to be satisfying the right long-term niche market and the demands of being a flexible and resilient business. It also means that start-ups will still rely on their people as their most important asset, the impetus remains to develop your team and make effective new hires.